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Marketing and the law [Sixth edition.]
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Simone Lockhart
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Samantha Christie

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Citation preview

Marketing and the Law SIXTH EDITION

Mark Bender LLM MEd GrCertHiEd GrCertDisRes GrCertTMLawPrac LLB(Hons) BBus DipFP Director, Australian Capital College

Samantha Christie BA(Hons) LLB(Hons) LLM(Melb) Barrister and Solicitor of the Supreme Courts of Victoria and New South Wales and of the High Court of Australia Lecturer, School of Law, Deakin University

Susan Carter BA(Hons) LLB(Hons) Solicitor of the Supreme Court of New South Wales Director, Law Extension Committee, University of Sydney

Simone Lockhart BEc (Syd) LLB(Hons)(UTS) LLM (Cambridge) Solicitor of the Supreme Court of New South Wales Sessional Lecturer, Business School, University of Sydney

LexisNexis Butterworths Australia 2020

LexisNexis AUSTRALIA LexisNexis Butterworths 475–495 Victoria Avenue, Chatswood NSW 2067 On the internet at: www.lexisnexis.com.au ARGENTINA LexisNexis Argentina, Buenos Aires AUSTRIA LexisNexis Verlag ARD Orac GmbH & Co KG, Vienna BRAZIL LexisNexis Latin America, Sao Paulo CANADA LexisNexis Canada, Markham, Ontario CHILE LexisNexis Chile, Santiago CHINA LexisNexis China, Beijing, Shanghai CZECH REPUBLIC Nakladatelství Orac sro, Prague FRANCE LexisNexis SA, Paris GERMANY LexisNexis Germany, Frankfurt HONG KONG LexisNexis Hong Kong, Hong Kong HUNGARY HVG-Orac, Budapest INDIA LexisNexis, New Delhi ITALY Dott A Giuffrè Editore SpA, Milan JAPAN LexisNexis Japan KK, Tokyo KOREA LexisNexis, Seoul MALAYSIA LexisNexis Malaysia Sdn Bhd, Petaling Jaya, Selangor NEW ZEALAND LexisNexis, Wellington POLAND Wydawnictwo Prawnicze LexisNexis, Warsaw SINGAPORE LexisNexis, Singapore SOUTH AFRICA LexisNexis Butterworths, Durban SWITZERLAND Staempfli Verlag AG, Berne TAIWAN LexisNexis, Taiwan UNITED KINGDOM LexisNexis UK, London, Edinburgh USA LexisNexis Group, New York, New York LexisNexis, Miamisburg, Ohio

Copyright © 2019. LexisNexis Butterworths. All rights reserved.

ISBN:

9780409350678 (pbk). 9780409350685 (ebk).

© 2020 Reed International Books Australia Pty Limited trading as LexisNexis. 1st Edition Butterworths, 1997; 2nd Edition, 2002 (reprinted 2002, 2003 and 2004 (two times)); 3rd Edition, 2006; 4th Edition, 2011 (reprinted 2011, 2013 and 2014 (two times)); 5th Edition, 2015. This book is copyright. Except as permitted under the Copyright Act 1968 (Cth), no part of this publication may be reproduced by any process, electronic or otherwise, without the specific written permission of the copyright owner. Neither may information be stored electronically in any form whatsoever without such permission. Inquiries should be addressed to the publishers. Typeset in Bliss Pro and Palatino. Printed in Australia. Visit LexisNexis Butterworths at www.lexisnexis.com.au

Table of Contents Preface��vii Acknowledgements��ix Table of Cases��xi Table of Statutes�� xxxv CHAPTER 1 CHAPTER 2 CHAPTER 3 CHAPTER 4 CHAPTER 5 CHAPTER 6 Copyright © 2019. LexisNexis Butterworths. All rights reserved.

CHAPTER 7 CHAPTER 8 CHAPTER 9 CHAPTER 10 CHAPTER 11 CHAPTER 12 CHAPTER 13 CHAPTER 14 CHAPTER 15 CHAPTER 16 CHAPTER 17 CHAPTER 18 CHAPTER 19

Introduction to the Law and Marketing�� 1 Protecting Inventive Ideas�� 45 Protecting Commercial Secrets��97 Protecting Copyright Material��127 Protecting Commercial Designs��187 Passing Off and Unfair Trading��213 Registration of Trade Marks�� 267 Product Packaging and Labelling��333 Product Liability��367 Advertising�� 425 Selling Techniques��495 Introduction to Competition Law��543 Collusive Conduct��585 Misuse of Market Power��645 Mergers�� 677 Resale Price Maintenance�� 697 Exclusive Dealing�� 725 Franchising�� 753 e-Marketing and e-Commerce��785

Index�� 827 v

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Copyright © 2019. LexisNexis Butterworths. All rights reserved.

Preface Marketing and the Law, now in its sixth edition, is a reference for business decision makers, legal practitioners, and students. It has been developed as a resource to enable readers to quickly ascertain key legal principles to assist in a wide range of marketing decision making. Numerous case examples and flowcharts are included to simplify the process of applying relevant law in common marketing contexts. This sixth edition of the text incorporates case law and statutory amendments made since the previous edition, including recent substantial changes in competition and intellectual property law. Whilst the text deals with the laws that impose control upon the activities of marketers, with an emphasis upon the need for compliance, it also explains how the law can on occasions positively benefit the marketer, and even be utilised to obtain a competitive advantage in the marketplace. The current authors recognise and remember Dr Brendan Sweeney, a founding author of this text, who passed away in 2019. His eloquent contributions, along with those of Bruce Clarke and Nadine Courmadias, continue to provide a sound base for this edition. There are many individuals at LexisNexis Australia who have made valuable contributions to the production of this text; in particular, Jocelyn Holmes, Sharon Szeto and Melanie Hastings. Finally, the authors thank their families and professional colleagues for their assistance, support, wisdom, and advice. Mark Bender Samantha Christie Susan Carter Simone Lockhart October 2019

vii

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Acknowledgments

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The authors and publishers are grateful to the holders of copyright in material from which extracts appear in this work. While every care has been taken to establish and acknowledge copyright, the publishers tender their apologies for any accidental infringement. The publishers would be pleased to come to a suitable arrangement with the rightful owners in each such case.

ix

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Table of Cases References are to paragraph numbers; bold font indicates case discussions

24 Hour Fitness Inc, Re (2001) 54 IPR 411; [2001] ATMO 121 .... 7.21 7-Eleven Stores Pty Ltd, Re (1994) ATPR 41-357 .... 15.14 7-Eleven Stores Pty Ltd, Independent Newsagents Association, Re (1998) ATPR 41-666 .... 12.58

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A A & M Records Inc v Napster Inc (2000) 50 IPR 232; 239 F 3d 1004 (2001) .... 4.61 A Schroeder Music Publishing Co Ltd v Macauley [1974] 3 All ER 616; [1974] 1 WLR 1308 .... 11.22 Abiomed Inc v Turnbull 379 F Supp d 90 (D Mass 2005) .... 19.50 Abundant Earth Pty Ltd v R & C Products Pty Ltd (1985) 59 ALR 211; 4 IPR 387; (1985) ATPR 40-532 .... 6.27C3 ACCC action against Readers Digest (2003) .... 11.35C ACCC and Citymove Pty Ltd (2011) Infringement notice proceedings .... 10.41C ACCC v ABB Transmission & Distribution Ltd (2001) ATPR 41-815; [2001] FCA 383 .... 13.39 — v Adepto Publications Pty Ltd [2013] FCA 247 .... 10.40C, 10.43, 10.44 — v Air New Zealand Ltd [2014] FCA 1157 .... 13.11, 13.14 — v Alice Car & Truck Rentals Pty Ltd (1997) ATPR 41-582 .... 13.24C

— v Amcor Printing Papers Group Ltd (2000) 169 ALR 344; [2000] FCA 17 .... 13.8 — v Ampol Petroleum (Victoria) Pty Ltd (1996) ATPR 41-469 .... 16.28C2 — v Apple Pty Ltd [2012] FCA 646 .... 10.51C — v Australia and New Zealand Banking Group Ltd [2013] FCA 1206 .... 12.42 — v — [2016] FCA 1516 .... 13.25 — v Australian Safeway Stores Pty Ltd (1997) 145 ALR 36; (1997) ATPR 41-562 .... 1.48, 16.18C — v — (No 2) (2003) 198 ALR 657; [2003] FCAFC 149 .... 13.24, 14.12, 14.23, 16.18 — v Baxter Healthcare Pty Ltd (No 2) (2008) 249 ALR 674; [2008] FCAFC 141 .... 17.11C2, 17.23, 17.26 — v Birubi Art Pty Ltd [2018] FCA 1595 .... 8.16C, 10.37 — v Black & White Cabs Pty Ltd [2010] FCA 1399 .... 17.15C1 — v Cadbury Schweppes Pty Ltd (2004) 61 IPR 270; (2004) ATPR 42-001; [2004] FCA 516 .... 8.10C — v CC (NSW) Pty Ltd (1999) 165 ALR 468; (1999) ATPR 41-732 .... 13.8, 13.23, 13.43C2 — v Cement Australia Pty Ltd (2013) 310 ALR 165; [2013] FCA 909 .... 12.37, 12.44, 13.54 — v Channel Seven Brisbane Pty Ltd (2009) 239 CLR 305; 255 ALR 1; [2009] HCA 19 .... 10.58, 10.58C

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Marketing and the Law — v Chen (2003) 201 ALR 40; (2003) ATPR 41-948; [2003] FCA 897 .... 6.33 — v Colgate-Palmolive Pty Ltd (2002) ATPR 41-880; [2002] FCA 619 .... 16.18, 16.23, 16.28 — v Cotton On Kids Pty Ltd [2012] FCA 1428 .... 8.7C — v D M Faulkner Pty Ltd [2004] FCA 1666 .... 13.43 — v Danoz Direct Pty Ltd (2003) 60 IPR 296; [2003] FCA 881 .... 10.24C, 10.26, 10.43 — v Dermalogica Pty Ltd (2005) 215 ALR 482; (2005) ATPR 42-046; [2005] FCA 152 .... 16.23 — v Derodi Pty Ltd [2016] FCA 365 .... 8.13C — v Dimmeys Stores Pty Ltd (1999) ATPR 41-716; [1999] FCA 1175 .... 9.66C2 — v — (2001) ATPR 41-811; [2001] FCA 299 .... 9.66C2 — v Energy Australia Pty Ltd [2014] FCA 336 .... 11.44C — v Fila Sport Oceania Pty Ltd (2004) ATPR 41-983; [2004] FCA 376 .... 12.46, 17.11C1 — v Flight Centre Ltd (No 2) [2016] HCA 49 .... 13.21 — v George Weston Foods Ltd (2000) ATPR 41-763; [2000] FCA 690 .... 13.21 — v Geowash Pty Ltd (Subject to a Deed of Company Arrangement) (No 3) [2019] FCA 72 .... 18.14, 18.24, 18.25, 18.25C — v Get Qualified Australia Pty Ltd (in liq) (No 2) [2017] FCA 709 .... 18.25 — v GIA Pty Ltd (2002) ATPR 41-902; [2002] FCA 1298 .... 8.14C1 — v Giraffe World Australia Pty Ltd (1999) 166 ALR 74; (1999) ATPR 41-718; [1999] FCA 1161 .... 11.33C, 11.34 — v Gordon Superstore Pty Ltd [2014] FCA 452 .... 10.49C1 — v Hewlett-Packard Australia Pty Ltd [2013] FCA 653 .... 10.31 — v Hungry Jack’s Pty Ltd (1996) ATPR 41-538 .... 9.66, 10.69 — v Internic Technology Pty Ltd (1998) 42 IPR 225; (1998) ATPR 41-646 .... 10.11 — v Ithaca Ice Works Pty Ltd (2000) ATPR 41-777; [2000] FCA 997 .... 13.30 — v Jetplace Pty Ltd [2010] FCA 759 .... 10.43, 10.70 — v Jetstar Airways Pty Ltd [2019] FCA 797 .... 10.31

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— v JJ Richards & Sons Pty Ltd [2017] FCA 1224 .... 11.31C — v Kyloe Pty Ltd (2007) ATPR 42-194; [2007] FCA 1522 .... 18.13 — v Le Sands Restaurant and Le Sands Café Pty Ltd t/as Signature Brasserie [2011] FCA 105 .... 10.54C — v Leahy Petroleum Pty Ltd (2004) 141 FCR 183; [2004] FCA 1678 .... 13.8, 13.13, 13.23C4 — v — (2007) ATPR 42-162; [2007] FCA 794 .... 13.13, 13.23C4 — v — (No 2) (2005) 215 ALR 281; (2005) ATPR 42-051; [2005] FCA 254 .... 13.23C4 — v LG Electronics Australia Pty Ltd [2018] FCAFC 96 .... 10.31, 11.18 — v Link Solutions Pty Ltd (No 2) (2010) 272 ALR 280; [2010] FCA 919 .... 17.15 — v Lovelock Luke Pty Ltd (1997) 39 IPR 439; (1997) ATPR 41-594 .... 8.14 — v Lux Pty Ltd [2004] FCA 926 .... 11.24C, 11.32 — v Maritime Union of Australia (2001) 114 FCR 472; 187 ALR 487; [2001] FCA 1549 .... 11.32 — v Mayo International Pty Ltd (1998) ATPR 41-653 .... 16.15 — v McCaskey (2000) 104 FCR 8; 183 ALR 159; [2000] FCA 1037 .... 11.32 — v Medibank Private Ltd [2018] FCAFC 235 .... 18.25 — v Metcash Trading Ltd (2011) 284 ALR 662; [2011] FCAFC 151 .... 12.36, 12.38, 12.42, 15.8, 15.8C2 — v Mitsubishi Electric Australia Pty Ltd [2013] FCA 1413 .... 16.15, 16.19, 16.21C — v MNB Variety Imports Pty Ltd (1998) ATPR 41-617 .... 1.46, 9.66 — v Mobil Oil Australia Ltd (1997) ATPR 41-568 .... 13.13 — v Morild Pty Ltd [2017] FCA 1308 .... 18.18C — v Murray (2002) ATPR 41-899; [2002] FCA 1252 .... 10.61 — v Navman Australia Pty Ltd (2007) ATPR 42-208; [2007] FCA 2061 .... 16.13, 16.17C, 16.19 — v Nissan Motor Company (1998) ATR 41-660 .... 10.37, 10.67 — v Nissan Motor Company (Australia) Pty Ltd & Thomas Wightman [1998] ATPR 40-660; [1998] FCA 1048 .... 10.55

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Table of Cases — v NW Frozen Foods Pty Ltd (1996) ATPR 41-515 .... 13.23C1 — v Optell Pty Ltd (1998) 41 IPR 49; (1998) ATPR 41-640 .... 10.38, 10.48 — v Ozsale Pty Ltd [2016] FCA 1049 .... 8.9C — v Pioneer Concrete (Qld) Pty Ltd (1996) ATPR 41-457 .... 13.39, 13.43C1 — v Prouds Jewellers Pty Ltd (No 2) (2008) ATPR 42-230; [2008] FCA 476 .... 10.69 — v Renegade Gas Pty Ltd (t/as Supagas NSW) [2014] FCA 1135 .... 12.25, 13.39C1 — v Roche Vitamins Australia Pty Ltd (2001) ATPR 41-809; [2001] FCA 150 .... 13.30, 13.39 — v Signature Security Group Pty Ltd (2003) ATPR 41-908; [2003] FCA 3 .... 10.45 — v Simply No-Knead (Franchising) Pty Ltd (2000) 178 ALR 304; [2000] FCA 1365 .... 18.8 — v SIP Australia Pty Ltd (1999) ATPR 41-702; [1999] FCA 858 .... 12.25, 13.30 — v Skins Compression Garments Pty Ltd [2009] FCA 710 .... 16.15C2, 16.23C2, 16.28 — v Skippy Australia Pty Ltd [2006] FCA 1343 .... 10.37, 10.49 — v Smash Enterprises Pty Ltd [2011] FCA 375 .... 8.8C — v South East Melbourne Cleaning Pty Ltd (in liq) (No 2) [2015] FCA 25 .... 18.15 — v StoresOnline International Inc (2007) ATPR 42-196; [2007] FCA 1597 .... 10.70 — v Stott [2013] FCA 88 .... 10.73 — v Target Australia Pty Ltd (2001) ATPR 41-840; [2001] FCA 1326 .... 10.21, 10.45 — v Tasmanian Salmonid Growers Association Ltd [2003] FCA 788 .... 13.35C — v Teac Australia Pty Ltd [2007] FCA 1859 .... 16.23 — v Telwater Pty Ltd [2009] FCA 263 .... 16.15C1, 16.28 — v TF Woollam & Son Pty Ltd (2011) 285 ALR 236; [2011] FCA 973 .... 13.43C3 — v The Tasmanian Salmonid Growers Association Ltd (2003) ATPR 41-954; [2003] FCA 788 .... 12.27 — v TPG Internet Pty Ltd (2013) 250 CLR 640; 304 ALR 186; [2013] HCA 54 .... 10.13C, 10.16, 10.22, 10.45, 10.54 — v Trading Post Australia Pty Ltd [2011] FCA 1086 .... 6.34C, 19.54

— v Tubemakers of Australia Ltd (2000) ATPR 41-745; [1999] FCA 1787 .... 13.30 — v Tyco Australia Pty Ltd (2000) ATPR 41-740; [1999] FCA 1799 .... 13.43 — v Ultra Tune Australia Pty Ltd [2019] FCA 12 .... 18.14, 18.24, 18.24C1 — v Valve Corporation (No 3) [2016] FCA 196 .... 10.31 — v Virgin Mobile Australia Pty Ltd (No 2) [2002] FCA 1548 .... 10.69 — v Visy Industries Holdings Pty Ltd (No 3) (2007) 244 ALR 673; [2007] FCA 1617 .... 13.16, 13.39 — v Visy Paper Pty Ltd (No 2) (2004) 212 ALR 564; (2004) ATPR 42-032 .... 13.39 — v WD & HO Wills (Australia) Pty Ltd (Fed Ct, 23 February 1998, unreported) .... 13.21 — v Wizard Mortgage Corp Ltd (2002) ATPR 41-903; [2002] FCA 1317 .... 10.38 — v Z-Tek Computer Pty Ltd (1997) 148 ALR 339; (1997) ATPR 41-580 .... 10.70 Accor Australia and New Zealand Hospitality Pty Ltd v Liv Pty Ltd (2017) 345 ALR 205; [2017] FCAFC 56 .... 7.47 ACI Fibreglass Pty Ltd Application (1974) 1 TPCD [241] .... 13.51 ACI Operations Pty Ltd (1991) ATPR (Com) 50-108 .... 12.59 Acohs Pty Ltd v Ucorp Pty Ltd (2010) 86 IPR 492; [2010] FCA 577 .... 4.8 — v Ucorp Pty Ltd (2012) 287 ALR 403; 95 IPR 117; [2012] FCAFC 16 .... 4.36 Adams v ETA Foods Ltd (1987) 78 ALR 611; (1987) ATPR 40-831 .... 10.37, 10.61, 10.62 Adelaide Chemical & Fertilizer Co Ltd v Carlyle (1940) 64 CLR 514 .... 8.4, 9.10C2 Adidas AG v Pacific Brands Footwear Pty Ltd (No 3) (2013) 308 ALR 74; 103 IPR 521; [2013] FCA 905 .... 7.48 Advance Hair Studio Pty Ltd v TVW Enterprises Ltd (1987) 77 ALR 615; 10 IPR 97; (1987) ATPR 40-816 .... 10.58 Advanced Building Systems Pty Ltd v Ramset Fasteners (Aust) Pty Ltd [1999] FCA 898 .... 2.51 Advantage Rent-A-Car Inc v Advantage Car Rental Pty Ltd (2001) 52 IPR 24; [2001] FCA 683 .... 4.44 Ah Toy J Pty Ltd v Thiess Toyota Pty Ltd (1980) 30 ALR 271; 5 TPC 824; (1980) ATPR 40-155 .... 13.49

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Marketing and the Law Air New Zealand Ltd v ACCC [2017] HCA 21 .... 15.8 Aktiebolaget Hassle v Alphapharm Pty Ltd (2002) 212 CLR 411; 194 ALR 485; [2002] HCA 59 .... 2.19C Aldi Stores Ltd Partnership v Frito-Lay Trading Co GmbH (2001) 190 ALR 185; 54 IPR 344; [2001] FCA 1874 .... 7.48, 7.48C2, 7.52 Amalgamated Mining Services Pty Ltd v Warman International Ltd (1992) 111 ALR 269; 24 IPR 461 .... 4.18 Amco Wrangler Ltd v Jacques Konckier (1978) 10 IPR 376 .... 7.27 American Express Co v NV Amev (1985) 5 IPR 267; [1985] RPC 466 .... 7.50 Anaesthetic Supplies Pty Ltd v Rescare Ltd (1994) 122 ALR 141; 28 IPR 383 .... 2.10, 2.28C Angoves Pty Ltd v Johnson (1982) 43 ALR 349 .... 7.28, 7.56C1, 7.75 Anheuser-Busch Inc v Castlebrae Pty Ltd (1991) 32 FCR 64; 23 IPR 54 .... 7.42 Annand and Thompson Pty Ltd v Trade Practices Commission (1979) 25 ALR 91 .... 10.39 Ansell Rubber Co Pty Ltd v Allied Rubber Industries Pty Ltd [1967] VLR 37 .... 3.8C1, 3.19, 3.28 Anton Piller KG v Manufacturing Processes Ltd [1976] Ch 55; [1976] 1 All ER 779 .... 4.69 Apand Pty Ltd v Kettle Chip Co Pty Ltd (1994) 30 IPR 337; (1994) ATPR 41-353 .... 10.18 — v — (No 2) (1999) 162 ALR 505; 43 IPR 225; [1999] FCA 483 .... 6.31C Apco Service Stations Pty Ltd v ACCC (2005) ATPR 42-078; [2005] FCAFC 161 .... 13.8, 13.13, 13.24 Apotex Pty Ltd v Sanofi-Aventis Australia Pty Ltd (2013) 304 ALR 1; 103 IPR 217; [2013] HCA 50 .... 2.10C Apple Inc v Wholesale Central Pty Ltd [2010] ATMO 7 .... 7.49 Architects (Australia) Pty Ltd v Witty Consultants Pty Ltd [2002] QSC 139 .... 6.33C1 Argy v Blunts & Lane Real Estate Pty Ltd (1990) 26 FCR 112; 94 ALR 719 .... 10.9 Arnotts Ltd v TPC (1990) 97 ALR 555; (1990) ATPR 41-061 .... 15.8C1

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Arrow Pharmaceuticals Ltd v Merck & Co Inc (2004) 213 ALR 182; 63 IPR 85; [2004] FCA 1282 .... 2.9 Ascot Four Pty Ltd v ACCC (2009) 255 ALR 441; [2009] FCAFC 61 .... 10.45C2 Association of Molecular Pathology v Myriad Genetics Inc (2013) 569 US 12-398 .... 2.11 AstraZeneca AB v Apotex Pty Ltd (2014) 312 ALR 1; 107 IPR 177; [2014] FCAFC 99 .... 2.18C, 2.51C1 Astrazeneca Pty Ltd v GlaxoSmithKline Australia Pty Ltd (2006) ATPR 42-106; [2006] FCAFC 22 .... 10.12, 10.21 ASX Operations Pty Ltd v Pont Data Australia Pty Ltd (1990) 97 ALR 513; 19 IPR 323; (1991) ATPR 41-069 .... 14.20C, 14.33, 17.23 Attwood v Lamont [1920] All ER Rep 55 .... 3.36 .au Domain Administration Ltd v Domain Names Australia Pty Ltd (2004) 207 ALR 521; 61 IPR 81; [2004] FCA 424 .... 10.12, 10.13 Austereo Pty Ltd v DMG Radio (Australia) Pty Ltd (2004) 209 ALR 93; 61 IPR 257; [2004] FCA 9968 .... 7.23 Australasian Health & Nutrition Association Ltd (t/as Sanitarium Health Food Co) v Irrewarra Estate Pty Ltd (t/as Irrewarra Sourdough) (2012) 292 ALR 101; [2012] FCA 592 .... 7.14, 7.47C3, 7.62, 7.63 Australasian Performing Right Association Ltd v Canterbury-Bankstown League Club Ltd [1964–5] NSWR 138 .... 4.59 — v Commonwealth Bank of Australia (1992) 111 ALR 671; 25 IPR 157 .... 4.46 — v Jain (1990) 26 FCR 53; 96 ALR 619; 18 IPR 663 .... 4.59 — v Metro on George Pty Ltd (2004) 210 ALR 244; 61 IPR 575; [2004] FCA 1123 .... 4.59C Australia Meat Holdings Pty Ltd v TPC (1989) ATPR 40-932 .... 12.35, 12.44, 12.44C, 12.55, 15.20, 15.22 Australian Automobile Chamber of Commerce, Re (1978) 3 TPR 244 .... 13.27 Australian Automotive Repairers’ Association (Political Action Committee) Inc v Insurance Australia Ltd (No 6) [2004] FCA 700 .... 17.15

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Table of Cases Australian Broadcasting Corp v Lenah Game Meats Pty Ltd (2001) 208 CLR 199; 185 ALR 1; [2001] HCA 63 .... 3.15C Australian Communications and Media Authority v Clarity1 Pty Ltd (2006) 155 FCR 377; [2006] FCA 1399 .... 19.14C — v Mobilegate Ltd (2009) 261 ALR 326; [2009] FCA 1225 .... 19.15, 19.15C Australian Federation of Construction Contractors’ Application (1975) 1 TPCD [244] .... 13.55C Australian Football League v The Age Co Ltd (2007) 15 VR 419 .... 3.5 Australian Gas Light Co v ACCC (2003) ATPR 41-966; [2003] FCA 1525 .... 12.36, 15.8 Australian Home Loans v Phillips (1998) ATPR 41-626 .... 4.17 Australian Olympic Committee, Inc v Telstra Corporation Ltd [2016] FCA 857 .... 10.30C Australian Postal Corporation v Digital Post Australia (2013) 308 ALR 1; 105 IPR 1; [2013] FCAFC 153 .... 7.48 Australian Securities and Investments Commission v National Exchange Pty Ltd (2003) 202 ALR 24; 47 ACSR 128; [2003] FCA 955 .... 10.12 Australian Tape Manufacturers Association Ltd v Commonwealth of Australia (1993) 176 CLR 480; 112 ALR 53; 25 IPR 1 .... 4.60 Australian Wine Importer’s Trade Mark, Re (1889) 6 RPC 311 .... 7.50 AUSvance LLC Infringement Notice proceedings .... 19.12C Autodesk Inc v Dyason (No 1) (1992) 173 CLR 330; 104 ALR 563; 22 IPR 163 .... 4.43 — v — (No 2) (1993) 176 CLR 300; 67 ALJR 270; 111 ALR 385 .... 4.43 Azuko Pty Ltd v Old Digger Pty Ltd (2001) 52 IPR 75; [2001] FCA 1079 .... 2.23, 2.23C2

B Baigent v Random House Group Ltd (2006) 69 IPR 143; [2006] EWHC 719 (Ch) .... 4.42 Bailey & Co Ltd v Bocaccio Pty Ltd & Pacific Wine Co Pty Ltd (1986) 4 NSWLR 701; 77 ALR 177; 6 IPR 279 .... 4.67 Baker & Priem (No 2), Re Application by (1989) 15 IPR 660; (1989) AIPC 90-599 .... 5.14

Ballard v Sperry Rand Australia Ltd (1975) 6 ALR 696; (1975) ATPR 40-006 .... 10.49 Banner Universal Motion Pictures Ltd v Endemol Shine Group Ltd [2017] EWHC 2600 Ch; [2017] WLR(D) 686 .... 4.13 Barratta v TPA Pty Ltd (Civil Claims) [2012] VCAT 679 .... 9.17 Barrett v Ecco Personnel Pty Ltd [1998] NSWCA 30 .... 3.19 Barton v Croner Trading Pty Ltd (1984) 54 ALR 541; (1984) ATPR 40-470 .... 10.43 — v— (1985) 5 IPR 59; (1985) ATPR 40-525 .... 10.37 — v Gary Lai Pty Ltd (1984) ATPR 40-495 .... 10.67 Bateman v Slatyer (1987) 71 ALR 553; 8 IPR 33; (1987) ATPR 40-762 .... 10.23, 11.21 Baywatch Productions Co Ltd v Home Video Channel [1997] FSR 22 .... 7.53 Beale v Taylor [1967] 3 All ER 253; [1967] 1 WLR 1193 .... 9.19C Beck v Montana Constructions Pty Ltd (1963) 80 WN (NSW) 1578 .... 4.36 Bedford Industries Rehabilitation Association Inc v Pinefair Pty Ltd & Porter (1996) ATPR 41-448 .... 6.25 Beecham Group Ltd v Bristol Laboratories Pty Ltd (1968) 118 CLR 618; [1968] RPC 301 .... 2.55 Beecham Group plc v Colgate-Palmolive Co (2001) 58 IPR 161; [2001] ATMO 119 .... 7.16 Benetton Group SpA, Re Application by (1989) 14 IPR 188 .... 7.21 Bently Fragrances Pty Ltd v GDR Consultants Pty Ltd (1985) 5 IPR 183; 11 FCR 29; (1985) ATPR 40-589 .... 6.22C Berlei Hestia Industries v Bali Co Inc (1973) 129 CLR 353; 1 ALR 443; [1973] HCA 43 .... 7.63C2 Betta Stores Ltd, Re (1977–8) ATPR (Com) 16,927 .... 13.73 BHP Petroleum Pty Ltd, Re (1986) ATPR (Com) 50-112 .... 13.72C Bilski v Kappos 130 S Ct 3218 (2010) .... 2.8 Black Cabs & Eastern Group Taxis Co-operative Ltd (1990) ATPR (Com) 50-098 .... 13.74 Blockbuster Entertainment Inc v Civic Video Pty Ltd [1999] ATMO 25 .... 7.23

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Marketing and the Law Blount Inc v Registrar of Trade Marks (1998) 40 IPR 498; [1998] FCA 440 .... 7.28C BM Auto Sales Pty Ltd v Budget Rent A Car System Pty Ltd (1976) 12 ALR 363; (1976) 51 ALJR 254 .... 6.9C, 6.13, 7.75 BMW Australia Ltd v ACCC (2004) 207 ALR 452; (2004) ATPR 42-012; [2004] FCAFC 167 .... 9.66C1 Bollinger v Costa Brava Wine Co Ltd (No 2) [1961] 1 All ER 561; [1961] RPC 116 .... 6.8C, 6.15 Bonz Group (Pty) Ltd v Cooke [1994] 3 NZLR 216 .... 4.20 Boral Besser Masonry Ltd (now Boral Masonry Ltd) v ACCC (2003) 215 CLR 374; 195 ALR 609; [2003] HCA 5 .... 12.40, 14.11, 14.12, 14.14, 14.26, 14.26C Boston Deep Sea Fishing & Ice Co v Ansell (1888) 39 Ch D 339; [1886–90] All ER Rep 65 .... 3.20 BP Australia Ltd v Trade Practices Commission (1986) ATPR 40-701 .... 16.17C BP plc v Woolworths Ltd (2004) 212 ALR 79; 62 IPR 545; [2004] FCA 1362 .... 7.75 Bradken Resources Pty Ltd v Lynx Engineering Consultants Pty Ltd (2012) 97 IPR 424; [2012] FCA 944 .... 2.23 Bradmill Industries Ltd v B & S Products Pty Ltd (1980) 53 FLR 385; (1980) ATPR 40-191 .... 7.75 Bridge Stockbrokers Ltd v Bridges (1984) 57 ALR 401; 5 IPR 81; (1985) ATPR 40-502 .... 10.18 Bright Tunes Music Corp v Harrisongs Music Ltd 420 F Supp 177 (1976) .... 4.40 Briginshaw v Briginshaw (1938) 60 CLR 336; [1938] HCA 34 .... 10.34, 12.22 Bristol-Myers Squibb Co v F H Faulding & Co Ltd (2000) 170 ALR 439; 46 IPR 553; [2000] FCA 316 .... 2.9, 2.10, 2.60 British Franco Electric Pty Ltd v Dowling Plastics Pty Ltd [1981] NSWLR 448 .... 5.8C British Leyland Corp v Armstrong Patents Co Ltd [1986] AC 577; 6 IPR 102; [1986] 1 All ER 850; [1986] 2 WLR 400 .... 4.18 Brock v Terrace Times Pty Ltd (1982) 40 ALR 97; 56 FLR 464 .... 6.25 Brock and Co Ltd’s Application (1909) 26 RPC 683 .... 7.14

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Brodel v Telstra Corp Ltd [2004] FCA 505 .... 4.11 Broderbund Software Inc v Computermate Products (Australia) Pty Ltd (1991) 22 IPR 215; (1992) ATPR 41-155 .... 12.46 Broken Hill Proprietary Co Ltd v Koppers Pty Ltd (1981) ATPR 40-203 .... 17.28 Brown v Southport Motors Pty Ltd (1982) 43 ALR 183; (1982) 67 FLR 254; (1982) ATPR 40-306 .... 11.19 Buckley v Tutty (1971) 125 CLR 353; [1972] ALR 370 .... 13.7 Budget Eyewear Australia Pty Ltd v Specsavers Pty Ltd (2010) 86 IPR 479; [2010] FCA 507 .... 4.9 Budget Rent-A-Car System Pty Ltd v Dewhirst (1984) ATPR 40-485 .... 10.23C1 Bunnings Group Ltd v Laminex Group Ltd (2006) 230 ALR 269 .... 9.14 Burberrys v J C Cording & Co Ltd (1909) 100 LT 985; 26 RPC 693 .... 6.3 Burge v Swarbrick (2007) 232 CLR 336; 234 ALR 204; 72 IPR 235; [2007] HCA 17 .... 4.20, 4.20C1 Burger King Corporation v Registrar of Trade Marks (1973) 128 CLR 417; 1A IPR 504; [1973] HCA 15 .... 7.21C1, 7.25 Butcher v Lachlan Elder Realty Pty Ltd (2004) 218 CLR 592; 212 ALR 357; [2004] HCA 60 .... 10.12, 10.16 Butt v Long (1953) 88 CLR 476; 27 ALJR 576 .... 3.36 Button v Suregold Pty Ltd; Button v Panagopoulos; Button v Buzza (1988) ATPR (Digest) 46-035; [1988] FCA 203 .... 8.9 Buttrose v Senior’s Choice (Australia) Pty Ltd [2014] FCCA 2156 .... 6.42

C Cadbury Ltd, Re Application by (2002) 55 IPR 561; [2002] ATMO 56 .... 7.26 Cadbury Schweppes Pty Ltd v Darrell Lea Chocolate Shops Pty Ltd (2007) 159 FCR 359 .... 6.21 — v — (No 4) (2006) 229 ALR 136; 69 IPR 23 .... 6.31 — v — (No 8) (2008) 75 IPR 557; (2008) ATPR 42-229; [2008] FCA 470 .... 6.31

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Table of Cases — v Pub Squash Co Pty Ltd [1980] 2 NSWLR 851; 32 ALR 387; [1981] 1 All ER 213 .... 6.11, 6.11C1, 6.11C2, 6.13, 6.23, 6.37 Cadbury Schweppes Pty Ltd & Effem Foods Pty Ltd v Société des Produits Nestlé SA [2003] ATMO 74 .... 7.18 Campbell v Backoffice Investments Pty Ltd (2009) 238 CLR 304; 257 ALR 610; 73 ACSR 1; [2009] HCA 25 .... 10.12 Campomar Sociedad, Limitada v Nike International Ltd (2000) 202 CLR 45; 169 ALR 677; [2000] HCA 12 .... 6.3, 6.13, 6.15, 6.24, 6.30C, 7.43, 10.13, 10.17 Candy v Bauer Media Ltd [2013] NSWSC 979 .... 3.6 Cantarella Bros Pty Ltd v Modena Trading Pty Ltd (2014) 2315 ALR 4; 109 IPR 154; [2014] HCA 48 .... 7.12, 7.13C Capital Networks Pty Ltd v .au Domain Administration Ltd (2004) ATPR (Digest) 46-254; [2004] FCA 808 .... 18.13 Capital Webworks Pty Ltd v Adultshop.com Ltd [2000] FCA 492 .... 19.66 Carey-Hazell v Getz Bros & Co (Australia) Pty Ltd (2004) ATPR 42-014; [2004] FCA 853 .... 9.56 Carlill v Carbolic Smoke Ball Co is [1893] 1 QB 256 .... 1.29 Carpet Call Pty Ltd v Chan (1987) ASC 55-553; (1987) ATPR (Digest) 46-025 .... 9.14, 9.18C2 Cassidy v Saatchi & Saatchi Australia Pty Ltd (2004) ATPR 41-980; [2004] FCAFC 34 .... 10.55 Cassini v Golden Era Shirt Co Pty Ltd (1985) 6 IPR 247; (1986) AIPC 90-263 .... 7.27 Castlemaine Tooheys Ltd v Williams & Hodgson Transport Pty Ltd (1986) 68 ALR 376; (1986) ATPR 40-751 .... 17.11, 17.15 Castrol Australia Pty Ltd v Emtech Associates Pty Ltd (1980) 33 ALR 31; (1980) ATPR 40-183 .... 3.27 Catnic Components Ltd v Hill & Smith Ltd [1978] FSR 405; [1982] RPC 183 .... 4.17 — v — [1981] FSR 60 .... 2.47 CBS Songs Ltd v Amstrad Consumer Electronics plc [1988] AC 1013; [1988] 2 All ER 484; 11 IPR 1 .... 4.60, 4.60C CCOM Pty Ltd v Jiejing Pty Ltd (1994) 122 ALR 417; 28 IPR 48 .... 2.7

Central Equity Ltd v Central Corporation Pty Ltd (1995) 32 IPR 481 .... 6.23 Chase Manhattan Overseas Corp v Chase Corporation Ltd (1986) 70 ALR 303; 8 IPR 569; (1986) ATPR 40-750 .... 7.75 Children’s Television Workshop Inc v Woolworths (NSW) Ltd [1981] 1 NSWLR 273; (1980) 1B IPR 609 .... 6.14C, 6.15, 6.26, 6.42, 6.45 Chocolaterie Guylian NV, Re (1999) 46 IPR 201; [1999] ATMO 28 .... 7.18 — v Registrar of Trade Marks (2009) 258 ALR 545; 82 IPR 13; [2009] FCA 891 .... 7.18 Chocosuisse Union des Fabricants Suisses de Chocolat v Cadbury Ltd [1999] RPC 826 .... 6.8C, 6.15, 6.41C Chris Ford Enterprises Pty Ltd v BH & JR Badenhop Pty Ltd (1985) 60 ALR 400; 4 IPR 485; (1985) ATPR 40-568 .... 5.20, 6.36 Clark Equipment Co v Registrar of Trade Marks (1964) 111 CLR 511; 38 ALJR 215; [1964] HCA 55 .... 7.12, 7.21, 7.21C2 Clarke, Re 17 USPQ 2d 1238 (TTAB 1990) .... 7.31 — v Earl of Dunraven & Mount-Earl (The Satanita) [1897] AC 59; [1895] P 248 .... 13.7 — v New Concept Import Services Pty Ltd (1982) 2 TPR 183; (1982) ATPR 40-284 .... 9.68C — v Pacific Dunlop Ltd (1989) ATPR 40-983 .... 9.66 Clifford Davis Ltd v WEA Records Ltd [1975] 1 All ER 237; [1975] 1 WLR 61 .... 11.22 Coca-Cola Co v All-Fect Distributors Ltd (1999) 47 IPR 481; (2000) ATPR 41-735; [1999] FCA 1721 .... 7.47, 7.49 — v PepsiCo Inc (No 2) (2014) 109 IPR 429; [2014] FCA 1287 .... 7.47 — v The Big Australian (Australia) Pty Ltd [1999] ATMO 58 .... 7.42C2, 7.52 Coca-Cola Trade Marks, Re (1985) 3 IPR 575; [1986] RPC 421 .... 7.18 Coco v A N Clark (Engineers) Ltd (1968) 1A IPR 587; [1969] RPC 41 .... 3.3, 3.4, 3.16, 3.21, 3.26, 3.28, 3.28C Colgate Palmolive Pty Ltd v Rexona Pty Ltd (1981) 37 ALR 391; (1981) ATPR 40-242 .... 10.26C1 — v Smithkline Beecham Holdings (Australia) (1997) 39 IPR 147; (1997) ATPR 41-579 .... 10.68C

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Marketing and the Law Collier Constructions Pty Ltd v Foskett Pty Ltd (1991) 97 ALR 460; 19 IPR 44 .... 4.19, 10.23 Collins Marrickville Pty Ltd v Henjo Investments Pty Ltd (1987) 72 ALR 601; (1987) ATPR 40-782 .... 11.21 Collis v Coles Myer Ltd (17 February 1988, Court of Petty Sessions, Perth, Complaint No 77968 of 1987) .... 11.15C1 Colorado Group Ltd v Strandbags Group Pty Ltd (2007) 243 ALR 127; 74 IPR 246; [2007] FCAFC 184 .... 7.21 Comité Interprofessional du Vin de Champagne v N L Burton Pty Ltd (1981) 38 ALR 664; (1981) ATPR 40-258; (1982) 1 TPR 128 .... 6.8C, 6.27 Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447; 46 ALR 402; 57 ALJR 358 .... 11.22C, 18.25 Commissioner of Patents v Microcell Ltd (1959) 102 CLR 232; 1A IPR 52 .... 2.9 Commonwealth Director of Public Prosecutions v Nippon Yusen Kabushiki Kaisha [2017] FCA 876 .... 13.17 Communication Credit Union Ltd v National Westminster Finance Australia Ltd (1983) 51 ALR 375; 1 IPR 507; (1983) ATPR 40-410 .... 6.27 Compagnie Industrielle de Precontrainte et D’Equipment des Constructions SA v First Melbourne Securities Pty Ltd (1999) 44 IPR 512; [1999] FCA 660 .... 4.18 Computer Edge Pty Ltd v Apple Computer Inc (1986) 161 CLR 171; 65 ALR 33; 6 IPR 1; [1986] HCA 19 .... 4.12 Computermate Products (Australia) Pty Ltd v Ozi-Soft Pty Ltd (1988) 83 ALR 492; 12 IPR 487 .... 4.66 ConAgra Inc v McCain Foods (Australia) Pty Ltd (1991) 101 ALR 461; 22 IPR 175; (1991) ATPR 41-121 .... 6.6 — v —(1992) 106 ALR 465; 23 IPR 193 .... 6.3 Concrete Constructions (NSW) Pty Ltd v Nelson (1990) 169 CLR 594; 92 ALR 193; 17 IPR 39 .... 10.7, 10.9 Confetti Records (a firm) v Warner Music UK Ltd (t/a East West Records) [2003] EWHC 1274 .... 4.26 Connect TV Pty Ltd v All Rounder Pty Ltd (No 5) (2016) 338 ALR 96; 118 IPR 133; [2016] FCA 338 ....4.48

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Continental TV Inc v GTE Sylvania Inc 433 US 36 (1977); 53 L Ed 2d 568 (1977) .... 17.23 Coogi Australia Pty Ltd v Hysport International Pty Ltd (1998) 157 ALR 247; 41 IPR 593 .... 4.20, 4.20C2 Cook v Bank of New South Wales (1982) 2 BPR 9580 .... 11.24 — v Deeks [1916] 1 AC 554; [1916–17] All ER Rep 285 .... 3.20 — v Pasminco Ltd [2000] FCA 677 .... 9.52 Cooper v Universal Music Australia Pty Ltd (2006) 237 ALR 714; 71 IPR 1; [2006] FCAFC 187 .... 4.47, 4.62, 4.63 Cooper Basin Natural Gas Supply Arrangements, Re (1997) ATPR 41-593 .... 12.62 Co-operative Bulk Handling Ltd (No 3), Application by [2013] ACompT 3 .... 12.60, 17.28C Corby v Allen & Unwin Pty Ltd (2013) 297 ALR 761; 101 IPR 181; [2013] FCA 370 .... 4.27C Cortis Exhaust Systems Pty Ltd v Kitten Software Pty Ltd (2001) ATPR 41-837; [2001] FCA 1189 .... 4.17 Cosmetic, Toiletry and Fragrance Association Foundation v Fanni Barns Pty Ltd (2003) 57 IPR 594; [2003] ATMO 10 .... 7.32 Courier Pete Pty Ltd v Metroll Queensland Pty Ltd (2010) 87 IPR 397; [2010] FCA 735 .... 5.20 Cranleigh Precision Engineering Ltd v Bryant [1964] 3 All ER 289; [1965] 1 WLR 1293; [1966] RPC 81 .... 3.11, 3.19, 3.19C3, 3.26 Cricketer Ltd v Newspress Pty Ltd & David Syme & Co Ltd [1974] VR 477 .... 6.5C2, 6.22, 6.40 Crowder v Hilton [1902] SALR 82 .... 3.11 CSR Ltd v Resource Capital Australia Pty Ltd (2003) ATPR 41-929; [2003] FCA 279 .... 6.33, 6.33C3 Cuisenaire v Reed [1963] VR 719; (1962) 1B IPR 235 .... 4.20 Cummins v Vella [2002] FCAFC 218 .... 4.5, 4.39, 4.40C, 4.44

D D & R Byrnes (Nominees) Pty Ltd v Central Queensland Meat Export Co Pty Ltd (1990) ATPR 41-028 .... 17.13 D B & A E Newman Pty Ltd v Barossa Co-operative Winery Ltd (1981) 28 SASR 501 .... 13.4

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Table of Cases Dainford Ltd v Sanrod Pty Ltd (1985) ATPR 40-513 .... 11.19 Dalgety Australia Operations Ltd v FF Seeley Nominees Pty Ltd (1985) 68 ALR 458; 5 IPR 97 .... 5.7C — v — (1986) 64 ALR 421; 6 IPR 361 .... 5.7C Dallas Buyers Club LLC v iiNet Ltd (No 1) [2014] FCA 1232 .... 4.48 Dandy Power Equipment Pty Ltd v Mercury Marine Pty Ltd (1982) 44 ALR 173; (1982) ATPR 40-315 .... 12.37, 17.9, 17.9C, 17.23 Daniels & Daniels v White & Sons Ltd [1938] 4 All ER 258 .... 9.2C, 9.5 Danisco A/S v Novozymes A/S (No 2) (2011) 91 IPR 209; [2011] FCA 282 .... 2.51C2 D’Arcy v Myriad Genetics Inc (2014) 313 ALR 627; 107 IPR 478; [2014] FCAFC 115 .... 2.11C Darwalla Milling Co Pty Ltd v F Hoffmann-La Roche Ltd [2006] FCA 915 .... 12.26 Data Access Corporation v Powerflex Services Pty Ltd (1999) 166 ALR 228; 45 IPR 353; [1999] HCA 49 .... 4.43 David Golf & Engineering Pty Ltd v Austgolf Corporation Pty Ltd (1993) ATPR 41-207 .... 10.69 Davids Holdings Pty Ltd v Attorney-General (Cth) (1994) 121 ALR 241; (1994) ATPR 41-304 .... 12.43 Dawson v Pacific Chase Investments (General) [2012] NSWCTTT 432 .... 9.18C1 — v World Travel Headquarters Pty Ltd (1981) ATPR 40-240 .... 10.43, 10.52 DC Comics Ltd v Cheqout Pty Ltd [2013] FCA 478 .... 7.42C5 — v Pan American Grain Mfg Co Inc 77 USPQ2d 1220 (TTAB, 2005) .... 6.42 De Garis v Neville Jeffress Pidler Pty Ltd (1990) 95 ALR 625; 18 IPR 292 .... 4.30 Decor Corporation Pty Ltd v Bo-Water Scott Ltd (1985) 5 IPR 288; (1985) ATPR 40-587 .... 10.16C, 10.27 — v Dart Industries Inc (1988) 13 IPR 385 .... 2.27, 2.47 Del Casale v Artedomus (Aust) Pty Ltd (2007) 73 IPR 326 .... 3.14 Demagogue Pty Ltd v Ramensky (1992) 110 ALR 608; (1993) ATPR 41-203 .... 10.25

Dennison Manufacturing Co v Monarch Marketing Systems Inc (1983) 66 ALR 265; 1 IPR 431 .... 2.14 Desktop Marketing Systems Pty Ltd v Telstra Corporation Ltd (2002) 192 ALR 433; 55 IPR 1; [2002] FCAFC 112 .... 4.10 Deta Nominees Pty Ltd v Viscount Plastic Products Pty Ltd [1979] VR 167 .... 3.16, 3.17C1, 3.28 Digga Australia Pty Ltd v Norm Engineering Pty Ltd (2008) 245 ALR 407; 75 IPR 251; [2008] FCAFC 33 .... 4.56C, 5.30 Digital Pulse Pty Ltd v Harris (2002) 40 ACSR 487; [2002] NSWSC 33 .... 3.35, 3.39 Doherty v Traveland Pty Ltd (1982) ATPR 40-323 .... 10.52 Donoghue v Allied Newspapers Ltd [1938] Ch 106; [1937] 3 All ER 503 .... 4.5C, 4.28 — v Stevenson [1932] AC 562; [1932] SC (HL) 31 .... 9.4, 9.4C1, 9.9, 9.49 Doolan v Magnamail Pty Ltd (1982) ATPR 40276 .... 10.37 Dorling v Honnor Marine Ltd [1965] Ch 1; [1964] 1 All ER 241 .... 4.18, 4.40 Dow Jones & Co Inc v Gutnick (2002) 210 CLR 575; 194 ALR 433; [2002] HCA 56 .... 19.57, 19.57C Dowdell v Knipsel Fruit Juices Pty Ltd [2003] FCA 851 .... 9.52 Dowling v Dalgety Australia Ltd (1992) 106 ALR 75; (1992) ATPR 41-165 .... 12.36, 14.12 Dowsett v Reid (1912) 15 CLR 695; 19 ALR 15 .... 11.22 Dr Martens Australia Pty Ltd v Figgins Holdings Pty Ltd (1999) 44 IPR 281; [1999] FCA 461 .... 5.32, 6.36 Drake v Mylar Pty Ltd [2011] NSWSC 1578 .... 9.55 Ducret v Chaudhary’s Oriental Carpet Palace Pty Ltd (1987) 76 ALR 183; (1987) ATPR 40-804 .... 10.37 Dura-Post (Australia) Pty Ltd v Delnorth Pty Ltd (2009) 81 IPR 480; [2009] FCAFC 81 .... 2.32C — v — [2009] HCATrans 328 .... 2.32C Duracell Australia Pty Ltd v Union Carbide Australia Ltd (1988) ATPR 40-918 .... 10.26, 10.27

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Marketing and the Law

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E E & J Gallo Winery v Lion Nathan Australia Pty Ltd (2009) 175 FCR 386; [2009] FCAFC 27 .... 7.50, 7.62 — v — (2010) 241 CLR 144; 265 ALR 645; 86 IPR 224; [2010] HCA 15 .... 7.50, 7.54, 7.62 Eagle Homes Pty Ltd v Austec Homes Pty Ltd (1999) 87 FCR 415; 161 ALR 503; 43 IPR 1 .... 4.19 Eastern Express Pty Ltd v General Newspapers Pty Ltd (1991) 103 ALR 41; (1991) ATPR 41-128 .... 13.54C, 17.23 — v — (1992) 106 ALR 297; (1992) ATPR 41-167 .... 13.54C, 14.11C, 14.26, 17.23 Eastman Kodak Co v Image Technical Services Inc 504 US 451 (1992) .... 12.46 eBay International AG v Creative Festival Entertainment Pty Ltd (2006) 170 FCR 450; [2006] FCA 1768 .... 19.9, 19.9C Edgetec International Pty Ltd v Zippykerb (NSW) Pty Ltd (2012) 98 IPR 1; [2012] FCA 281 .... 7.47 EdSonic Pty Ltd v Cassidy (2010) 272 ALR 589; 88 IPR 317; [2010] FCA 1008 .... 4.29 Effem Foods Pty Ltd v Wandella Pet Foods Pty Ltd (2006) 69 IPR 243; [2006] FCA 767 .... 7.42C2 Elconnex Pty Ltd v Gerard Industries Pty Ltd (1993) 25 IPR 173 .... 2.21 Electric Lamp Manufacturers (Australia) Pty Ltd, Re (1982) ATPR (Com) 50-033 .... 13.72 Electrix Ltd v Electrolux Ltd [1960] AC 722; [1959] 3 All ER 170 .... 7.14 Electrolux Ltd v Hudson [1977] FSR 312 .... 2.40C2 Elwood Clothing Pty Ltd v Cotton On Clothing Pty Ltd (2008) 172 FCR 580; 80 IPR 566; [2008] FCAFC 197 .... 4.11, 4.17, 4.44, 4.44C Emap Elan Ltd v Pacific Publications Pty Ltd (1997) 37 IPR 1; (1997) ATPR 41-551; [1997] FCA 50 .... 6.5C2, 6.22, 6.40C EMI Music Publishing Ltd v Papathanasiou [1993] EMLR 306 .... 4.40 Emrik Sporting Goods Pty Ltd v Stellar International Sporting Goods Pty Ltd (1981) 53 FLR 319; (1981) ATPR 40-217 .... 6.7 English Hop Growers Ltd v Dering [1928] 2 KB 174 .... 13.4 Equity Access Pty Ltd v Westpac Banking Corp (1989) 16 IPR 431; (1990) ATPR 40-994 .... 6.27

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Ernest Turner Electrical Instruments Ltd v Performing Right Society Ltd [1943] Ch 167; [1943] 1 All ER 413 .... 4.46 Erven Warnink BV v J Townend & Sons (Hull) Ltd [1979] 2 All ER 927; (1979) 1A IPR 666 .... 6.8C Esco Corp v US 340 F2d 1000 (1965) .... 13.10 Estee Lauder Cosmetics Ltd, Re (2000) 50 IPR 131; [2000] ATMO 46 .... 7.25 ETW Corporation v Jireh Publishing Inc 332 F 3d 915 (6th Cir, 2003) .... 6.42 Eva v Mazda Motors (Sales) Pty Ltd (1977) ATPR 40-020 .... 10.43 Exxon Corporation v Exxon Insurance Consultants Ltd [1982] Ch 119; [1981] 3 All ER 241 .... 4.11C, 4.12

F F H Faulding & Son Ltd v Imperial Chemical Industries of Australia and New Zealand Ltd (1965) 112 CLR 537; 39 ALJR 95 .... 7.12 Faccenda Chicken Ltd v Fowler (1986) 6 IPR 155; [1987] Ch 117; [1986] 1 All ER 617 .... 3.7, 3.13, 3.19, 3.19C2 Facton Ltd v Rifai Fashions Pty Ltd (2012) 287 ALR 199; 95 IPR 95; [2012] FCAFC 9 .... 4.69 Far Horizons Pty Ltd v McDonald’s Australia Ltd [2000] VSC 310 .... 18.8 Federation of Australian Underwater Instructors, Re (1983) ATPR (Com) 50-055 .... 13.74 Ferntree Homes Pty Ltd v Bohan (2001) 54 IPR 267; [2002] FCA 16 .... 4.40 Festival Industries v Mikasa (NSW) Pty Ltd (1971) 18 FLR 260 .... 16.15, 16.18 Fila Canada Inc v Jane Doe & John Doe (1966) 35 IPR 104 .... 2.56 Finger v Malua Motors Pty Ltd (1978) ATPR 40-061 .... 10.37 Fire Nymph Products Pty Ltd v Jalco Pty Ltd (1983) 47 ALR 355; 74 FLR 102; 1 IPR 79 .... 6.25 Firmagroup Australia Pty Ltd v Byrne & Davidson Doors (Vic) Pty Ltd (1987) 180 CLR 483; 73 ALR 321; 9 IPR 353 .... 5.3, 5.3C, 5.24 Flamingo Park Pty Ltd v Dolly Dolly Creations Pty Ltd (1986) 65 ALR 500; 6 IPR 431; (1986) ATPR 40-675 .... 5.32 Fletcher Challenge Ltd v Fletcher Challenge Pty Ltd [1981] NSWLR 196; (1981) 5 ACLR 532 .... 6.5, 7.75

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Table of Cases FNH Investments Pty Ltd v Sullivan (2003) 59 IPR 121; [2003] FCAFC 246 .... 4.69C Fomento Industrial SA & Biro Swan Ltd v Mentmore Manufacturing Co Ltd [1956] RPC 87 .... 2.16, 2.16C2 Food Channel Network Pty Ltd v Television Food Network GP (2010) 269 ALR 17; 86 IPR 437; [2010] FCAFC 58 .... 7.42 Foodland Associated Ltd, Re (1979) 4 TPR 109 .... 13.67 Ford Motor Co of Australia Ltd v Ford Sales Co of Australia Ltd (1977) ATPR 40-043 .... 13.49, 17.9C Fortescue Metals Group, Re (2010) 271 ALR 256; [2010] ACompT 2 .... 14.37C Foster’s Australia Ltd v Cash’s (Australia) Pty Ltd (2013) 299 ALR 134; 101 IPR 546; [2013] FCA 527 .... 5.21C Fractionated Cane Technology v Ruiz-Avila [1988] 2 Qd R 610; 13 IPR 609 .... 3.7 Francis Day & Hunter Ltd v Bron (1963) 1A IPR 331; [1963] Ch 587; [1963] 2 All ER 16 .... 4.40 — v Twentieth Century Fox Corp Ltd [1939] 4 All ER 192 .... 4.11 Franklin v Giddins [1978] Qd R 72; (1978) 1B IPR 807 .... 3.25C Fraser v Thames Television Ltd [1984] QB 44; [1983] 2 All ER 101 .... 3.4, 3.12C Freeman Cosmetic Corporation v Jenola Trial Pty Ltd (t/as South Pacific Cosmetics) (1993) ATPR 41-270 .... 6.25 Freshfood Holdings Pty Ltd, Re (2005) 64 IPR 607; [2005] ATMO 8 .... 7.18 Frucor Beverages Ltd v Coca Cola Company (2018) 358 ALR 336; 132 IPR 318 .... 7.26 Fry Consulting Pty Ltd v Sports Warehouse Inc (No 2) (2012) 288 ALR 727; 94 IPR 551; [2012] FCA 81 .... 7.21, 7.42C5

G GA Nominees Pty Ltd v Bardon Motors Pty Ltd (1985) ATPR 40-519 .... 11.19 Galaxy Electronics Pty Ltd & Gottlieb Enterprises Pty Ltd v Sega Enterprises Ltd (1997) 145 ALR 21; 37 IPR 462; [1997] FCA 403 .... 4.21 Gallagher v Pioneer Concrete (NSW) Pty Ltd (1993) 113 ALR 159; (1993) ATPR 41-216 .... 13.48

Gardam v George Wills & Co ltd (No 1) (1988) 82 ALR 415; 12 IPR 194; (1988) ATPR 40-884 .... 10.61 — v Splendid Enterprises Pty Ltd (1987) 33 A Crim R 123; (1987) ATPR 40-779 .... 9.66 Gardenia Overseas Pte Ltd v The Garden Co Ltd (No 2) (1994) 29 IPR 485 .... 7.69 Gartside v Outram (1856) 26 LJ Ch 113; 5 WR 35 .... 3.27 Gates v City Mutual Life Assurance Society Ltd (1986) 160 CLR 1; 63 ALR 600; 6 IPR 462; (1986) ATPR 40-666 .... 6.28 General Sportscraft Co Ltd v Sportscraft Consolidated Pty Ltd (1993) AIPC 90-967 .... 7.50 George Weston Foods Ltd v Goodman Fielder Ltd (2000) 49 IPR 553; [2000] FCA 1632 .... 10.21 GHD-Parsons Brinckerhoff Pty Ltd Application (1975) 1 TPCD [303] .... 13.66 Gillette Australia Pty Ltd v Energizer Australia Pty Ltd (2002) 193 ALR 629; 56 IPR 1; [2002] FCAFC 223 .... 10.27, 10.27C4 Giorgianni v R (1985) 156 CLR 473; 58 ALR 1; [1985] HCA 29 .... 10.56 Given v CV Holland (Holdings) Pty Ltd (1977) 15 ALR 439; (1977) ATPR 40-029 .... 10.36, 10.37 — v Snuffa Pty Ltd; Quinn (1978) ATPR 40-083 .... 10.37, 10.43, 10.48 GlaxoSmithKline Australia Pty Ltd v Reckitt Benckiser (Australia) Pty Ltd (No 2) [2018] FCA 1 .... 10.13, 10.26, 10.27C5 Glendale Chemical Products Pty Ltd v ACCC (1998) 90 FCR 40; (1999) ATPR 41-672 .... 9.53C1 Global One Mobile Entertainment Pty Ltd v ACCC [2012] FCAFC 134 .... 10.45 Global Sportsman Pty Ltd v Mirror Newspapers Ltd (1984) 55 ALR 25; (1984) ATPR 40-463 .... 10.58 Google Inc v ACCC (2013) 249 CLR 435; 294 ALR 404; 99 IPR 197; [2013] HCA 1 .... 6.22, 6.24, 6.31, 6.34C, 10.55, 10.58, 19.54, 19.54C Google LLC v Weeks [2018] FCCA 3150 .... 7.53 Graham Barclay Oysters Pty Ltd v Ryan (2000) 177 ALR 18; [2000] FCA 1099 .... 9.55, 9.55C — v — (2002) 211 CLR 540; 194 ALR 337; [2002] HCA 54 .... 9.55C

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Marketing and the Law Gram Engineering Pty Ltd v Bluescope Steel Ltd (2013) 106 IPR 1; [2013] FCA 508 .... 5.23 Grant v Australian Knitting Mills (1935) 54 CLR 49; [1935] AC 85 .... 9.17C2 — v Commissioner of Patents (2005) 67 IPR 1; [2005] FCA 1100 .... 2.8C1 Grays (NSW) Pty Ltd (2013) Infringement Notice proceedings .... 19.13C1 Green & Clara Pty Ltd v Bestobell Industries Pty Ltd (1982) 1 ACLC 1 .... 3.18, 3.20 Greenfield Products Pty Ltd v Rover-Scott Bonnar Ltd (1990) 95 ALR 275; 17 IPR 417 .... 4.18, 4.18C2, 4.20 Greenland v Chaplin (1850) 155 ER 104 .... 9.6 Griggs Group Ltd v Evans & Raben Footwear [2005] EWCA Civ 11 .... 4.32C, 4.35 Grove Hill Pty Ltd v Great Western Corp Pty Ltd (2002) 55 IPR 257; [2002] FCAFC 183 .... 2.23, 2.50C Guild v Eskandar Ltd [2001] FSR 645 .... 4.20 Guthrie v Doyle Dane & Bernbach Pty Ltd (1977) 16 ALR 241; (1977) ATPR 40-037 .... 10.61

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H Half Court Tennis Pty Ltd v Seymour (1980) 53 FLR 240 .... 4.19 Hall v Cox [1899] 1 QB 198 .... 11.6 — v La Ronde 66 Cal Rpt 2d 399 (1997) .... 19.50 Hamlyn v John Sands Ltd (1985) ASC 55-393; (1985) ATPR 40-554 .... 9.66 — v Mark Foy’s Pty Ltd (1982) ATPR 40-316 .... 9.72 — v Moppet Grange Pty Ltd (1984) ATPR 40-439 .... 9.66 — v Norman Ross Stores Pty Ltd; Waltons Stores (Interstate) Ltd (1984) ASC 55-378; (1985) ATPR 40-514 .... 9.66 Hanimex Pty Ltd v Kodak (Australasia) Pty Ltd (1982) 74 FLR 447; (1982) ATPR 40-287 .... 10.27C1 Hansen Beverage Co v Bickfords (Australia) Pty Ltd (2008) 251 ALR 1; 79 IPR 174; [2008] FCAFC 181 .... 6.6, 6.6C, 6.40C, 10.12C, 10.30 Hartnell v Sharp Corporation of Australia Pty Ltd (1975) 5 ALR 493; (1975) ATPR 40-003 .... 10.37, 10.43 Harvey Norman Infringement Notice Proceedings (2011) .... 11.15C2

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Hawkes & Son (London) Ltd v Paramount Film Service Ltd [1934] Ch 593 .... 4.39 Heating Centre Pty Ltd v TPC (1986) 65 ALR 429; (1986) ATPR 40-674 .... 16.14C Heavenly Trade Mark [1967] RPC 306 .... 7.21 Helena Rubinstein v Von Bronneck (1943) 43 SR (NSW) 283; 60 WN (NSW) 117 .... 6.30 Henderson v Bowden Ford Ltd (1979) ATPR 40-129 .... 10.39 — v Pioneer Homes Pty Ltd (No 2) (1980) 29 ALR 597; (1980) ATPR 40-159 .... 10.25 — v Radio Corp Pty Ltd (1960) 60 SR (NSW) 576; 77 WN (NSW) 585; 1A IPR 620 .... 6.15 Henry Thorne & Co v Sandow (1912) 29 RPC 440 .... 7.21 Hexagon Pty Ltd v Australian Broadcasting Commission (1975) 7 ALR 233 .... 6.45 Hivac Ltd v Park Royal Scientific Instruments Ltd [1946] Ch 169; [1946] 1 All ER 350 .... 3.18C1 Hogan v Koala Dundee Pty Ltd (1988) 83 ALR 187; 12 IPR 508 .... 6.12, 6.19 — v Pacific Dunlop Ltd (1988) ATPR 40-914 .... 6.42 ‘Hollie Hobbie’ Trade Mark, Re (1984) 1 IPR 486 .... 6.42 Hollis v Vabu Pty Ltd (2001) 207 CLR 1; 181 ALR 263; [2001] HCA 44 .... 2.39 Honey v Australian Airlines Ltd (1989) 14 IPR 264; (1989) ATPR 40-961 .... 6.43C2 Hoover (Australia) Pty Ltd v Email Ltd (1991) 104 ALR 369; (1991) ATPR 41-149 .... 10.12, 10.27 Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre (1978) 140 CLR 216; 18 ALR 639; 1B IPR 818 .... 6.19, 6.27C1, 7.75, 10.14, 10.18, 10.19, 10.25, 11.18 Hospitals Contribution Fund of Australia Ltd v Switzerland Australia Health Fund Pty Ltd (1987) 78 ALR 483; (1988) ATPR 40-846 .... 10.27, 10.69 Howard Auto-Cultivators Ltd v Webb Industries Pty Ltd (1946) 72 CLR 175; 20 ALJR 117 .... 7.14 Howard Smith Industries Pty Ltd Application (1977-8) ATPR 40-023 .... 13.66 HP Bulmer Ltd [1978] RPC 79 .... 6.11C4 Hughes v Western Australia Cricket Association Inc (1989) 69 ALR 660; (1986) ATPR 40-736 .... 12.36, 13.74

Table of Cases Hugin v Commissioner of European Communities [1979] ECR 1869 .... 12.46 Hunter Pacific International Pty Ltd v Martec Pty Ltd (2016) 121 IPR 1; [2016] FCA 796 .... 5.24 Hurley v McDonald’s Australia Ltd (2000) ATPR 41-741; [1999] FCA 1728 .... 11.24 Hutchence v South Sea Bubble Co Pty Ltd (1986) 64 ALR 33; 6 IPR 473; (1986) ATPR 40-667 .... 6.14, 6.42, 6.43C1, 10.21, 10.43, 11.21

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I IceTV Pty Ltd v Nine Network Australia Pty Ltd (2009) 239 CLR 458; 254 ALR 386; 80 IPR 451; [2009] HCA 14 .... 4.8, 4.10, 4.41C IF Asia Pacific Pty Ltd v Galbally [2003] VSC 192 .... 3.35 Impala Kitchens Pty Ltd v Hager (1992) ASC 56-134 .... 11.38C Initial Services Ltd v Putterill [1968] 1 QB 396; [1967] 3 All ER 145 .... 3.27 Interfirm Comparison (Australia) Pty Ltd v Law Society of NSW [1975] 2 NSWLR 104; (1975) 5 ALR 527; [1977] RPC 137 .... 3.13 Interlego AG v Croner Trading Pty Ltd (1991) 102 ALR 379; 21 IPR 37; (1991) ATPR 41-124 .... 6.36C — v — (1992) 111 ALR 577; 25 IPR 65; (1993) ATPR (Digest) 46-098 .... 6.36C, 10.13, 10.17 International Business Machines Corp v Smith, Commissioner of Patents (1992) 105 ALR 388; 22 IPR 417 .... 2.7 Interstate Parcel Express Co Pty Ltd v Time-Life International (1977) 138 CLR 534; 15 ALR 353; 1B IPR 253 .... 4.66C Irish Distillers Ltd v S Smith & Son Pty Ltd (1986) 7 IPR 509; (1987) ATPR 40-756 .... 10.18 Irving’s Yeast Vite v Horsenail (1934) 1B IPR 427; 51 RPC 110 .... 7.56C4

J J A Booth & Co v Fraser [1953] AR (NSW) 566 .... 10.37 J Lyons & Co Ltd’s Application [1958] RPC 466 .... 7.50 J McPhee & Son (Australia) Pty Ltd v ACCC (2000) 172 ALR 532; (2000) ATPR 41-758; [2000] FCA 365 .... 13.43

J Rapee & Co v Kas Cushions (1989) 90 ALR 288; 15 IPR 577 .... 5.15 Jansen Pharmaceutical v Pfizer Pty Ltd (1986) ATPR 40-654 .... 10.26 Jellinek’s Application (1946) 63 RPC 59 .... 7.50 Jetstar Airways Pty Ltd v Free [2008] VSC 539 .... 11.29C Jewellery Group Pty Ltd v ACCC [2013] FCAFC 144 .... 10.45 JGL Investments Pty Ltd, Re Application by (1989) 15 IPR 349; (1989) AIPC 90-595 .... 7.21 John Haig & Co Ltd v Forth Blending Co Ltd (1953) 70 RPC 259 .... 6.22C, 8.3 Joseph Crosfield & Sons Ltd, Re [1910] 1 Ch 130; (1910) 26 RPC 850 .... 7.21

K Kadkhudayan v WD & HO Wills (Australia) Ltd (2001) ATPR 41-822; [2001] FCA 645 .... 16.22 — v — (2002) ATPR 41-874; [2002] FCAFC 110 .... 16.22 Kailash Centre for Personal Development Inc v Yoga Magik Pty Ltd [2003] FCA 536 .... 19.65 Kalamazoo (Australia) Pty Ltd v Compact Business Systems Pty Ltd (1985) 5 IPR 213 .... 4.9 Karo Step Trade Mark, Re [1977] RPC 255 .... 4.17 Karoun Dairies SAL v Karoun Dairies Inc [2013] ATMO 28 .... 7.62 Kaye v Robertson [1991] FSR 62 .... 3.15 Keehn v Medical Benefits Fund of Australia Ltd (1977) 14 ALR 77; (1977) ATPR 40-047 .... 10.48 Keller v LED Technologies Pty Ltd (2010) 268 ALR 613; 87 IPR 1; [2010] FCAFC 55 .... 5.24C Kenman Kandy Australia Pty Ltd v Registrar of Trade Marks (2002) 56 IPR 30; [2002] FCAFC 273 .... 7.18 Kettle Chip Co Pty Ltd v Apand Pty Ltd (1993) 119 ALR 156; 27 IPR 321; (1994) ATPR 41-287; [1993] FCA 819 .... 6.25, 6.31, 6.31C — v — (1998) 155 ALR 134; 40 IPR 481; [1998] FCA 586 .... 6.31C Kevlacat Pty Ltd v Trailcraft Marine Pty Ltd (1987) 79 ALR 534; 11 IPR 77 .... 4.55 Keystone Knitting Mills Ltd Trade Mark, Re [1929] 1 Ch 92; (1928) 45 RPC 421 .... 7.21

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Marketing and the Law Kimberly-Clark Australia Pty Ltd v Arico Trading International Pty Ltd (2001) 207 CLR 1; 177 ALR 460; 50 IPR 513; [2001] HCA 8 .... 2.24 — v Multigate Medical Products Pty Ltd (2011) 92 IPR 21; [2011] FCAFC 86 .... 2.48C King Features Syndicate Inc v O & M Kleeman Ltd [1941] AC 417; (1941) 1B IPR 215; [1941] 2 All ER 403 .... 4.18, 4.44, 6.42 Kingswood Distillery Pty Ltd v Guinness United Distillers & Vintners (Australia) Ltd (2002) AIPC 91-829; [2002] ATMO 78 .... 7.42C2 Kirin-Amgen Inc v Board of Regents of University of Washington (1995) 33 IPR 557; (1996) AIPC 91-231 .... 2.11 Kirk v J & R Fleming Ltd [1928–35] Macg Cop Cas 44 .... 4.11 Kirshenboim v Salmon & Gluckstein Ltd [1898] 2 QB 19 .... 10.51 Knott Investments Pty Ltd v Winnegbago Industries Inc (2013) 299 ALR 74; 101 IPR 449; [2013] FCAFC 59 .... 6.5, 6.16C Koninklijke Philips Electronics NV v Remington Products Australia Pty Ltd (2000) 177 ALR 167; 48 IPR 257; [2000] FCA 876 .... 5.24, 5.32, 6.25, 6.36 Korczynski v West Lofts (Aust) Pty Ltd (1985) 62 ALR 225; (1986) ATPR 40-643 .... 10.37 Krueger Transport Equipment Pty Ltd v Glen Cameron Storage & Distribution Pty Ltd (2008) 78 IPR 262; [2008] FCA 803 .... 3.12, 4.18C1 Ku-ring-gai Co-operative Building Society (No 12) Ltd, Re (1978) 22 ALR 621; 36 FLR 134 .... 10.9 Kugler v Koscot Interplanetary 293 A 2d 682 (1972) .... 11.34 Kwik Copy Trade Mark [1982] RPC 102 .... 7.21

L Larmer v Dome Lighting Products (1978) ATPR 40-070 .... 10.43 — v Power Machinery Pty Ltd (1977) 14 ALR 243; 29 FLR 490; (1977) ATPR 40-021 .... 10.9, 10.43, 11.18 Larrikin Music Publishing Pty Ltd v EMI Songs Australia Pty Ltd (2010) 263 ALR 155; 83 IPR 582; [2010] FCA 29 .... 4.14, 4.39, 4.45C — v — (No 2) (2010) 270 ALR 481; 87 IPR 357; [2010] FCA 698 .... 4.14, 4.39, 4.45C

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LED Technologies Pty Ltd v Elecspess Pty Ltd (2008) 80 IPR 85; [2008] FCA 1941 .... 5.20, 10.13 — v Roadvision Pty Ltd (2012) 287 ALR 1; 94 IPR 481 .... 5.24 Lee Kar Choo t/as Yeen Thye Co v Lee Lian Choon t/as Chuan Lee Co [1967] 1 AC 602 .... 8.3 Lego System Aktieselskab v Lego M Lemelstrich Ltd [1983] FSR 155 .... 6.15 Leica Geosystems Pty Ltd v Koudstaal (No 3) (2014) 109 IPR 1; [2014] FCA 1129 .... 3.8C2 Lennox v Megray Pty Ltd & Gaggino (1985) 6 IPR 543; (1986) ATPR 40-640 .... 10.51 L’Estrange v F Graucob Ltd [1934] All ER Rep 16; [1934] 2 KB 394 .... 11.22 Levi v Colgate-Palmolive Pty Ltd (1941) 41 SR (NSW) 48; 58 WN (NSW) 63 .... 9.4C2 Levy, Ex p (1909) 9 SR (NSW) 688; 26 WN (NSW) 134b .... 11.6 Liebig’s Extract of Meat Co Ltd Trade Mark, Re; Re Wailes, Dov & Co (1902) 22 NZLR 165 .... 7.14 Life Savers (Australia) Ltd’s Application (1952) 22 AOJP 3106 .... 7.18 Lifeplan Australia Friendly Society Ltd v Ancient Order of Foresters in Victoria Friendly Society Ltd [2017] FCAFC 74 .... 3.29 Lift Shop Pty Ltd v Easy Living Home Elevators Pty Ltd [2013] FCA 900 .... 6.35C — v — (2014) 311 ALR 207; 106 IPR 419; [2014] FCAFC 75 .... 7.47C4 Lincoln Industries Ltd v Wham-O Manufacturing Co [1984] 1 NZLR 641; (1984) 3 IPR 115; [1985] RPC 127 .... 4.18 Lion Laboratories Ltd v Evans [1985] QB 526; (1984) 3 IPR 276; [1984] 2 All ER 417 .... 3.27C Lockwood Security Products Pty Ltd v Doric Products Pty Ltd (2007) 235 CLR 173; 235 ALR 202; 72 IPR 447; [2007] HCA 21 .... 2.21C2 Lott v JBW & Friends Pty Ltd (2000) 76 SASR 105; [2000] SASC 3 .... 4.17 Lucas v Economic Freedom Pty Ltd (1986) ATPR (Digest) 46-008 .... 11.19 Ly v The Queen (2014) 315 ALR 398; [2014] FCAFC 175 .... 4.72, 7.59C Lyngstad v Anabas Products Ltd [1977] FSR 62 .... 6.42

Table of Cases

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M Macadamia Processing Company and Suncoast Gold Pty Ltd, Re (1991) ATPR 50-109 .... 13.72 MacFarlane v John Martin & Co Ltd (1977) ATPR 40-034 .... 10.37 Mackay Airport Pty Ltd, Re (2013) 101 IPR 594; [2013] ATMO 17 .... 7.21 MacPhee v Peters Foods Australia Pty Ltd (in liq) (2004) 60 IPR 51; [2003] FCA 1528 .... 10.15, 10.37 Macquarie Bank Ltd v David (2008) 79 IPR 72; [2008] FCA 1417 .... 19.64 Madden v Seafolly Pty Ltd (2014) 313 ALR 1; [2014] FCAFC 30 .... 10.9 Maggbury Pty Ltd v Hafele Australia Pty Ltd (2001) 210 CLR 181; 185 ALR 152; 53 IPR 1; [2001] HCA 70 .... 3.5, 3.11 Mainland Products Ltd v Bonlac Foods (NZ) Ltd [1998] 3 NZLR 341; (1988) 42 IPR 388; 8 TLCR 224 .... 7.56C3 Maize v Atlantic Refining Co 352 Pa 51 (1945) .... 9.11, 9.51 Makita (Australia) Pty Ltd v Black & Decker (Australasia) Pty Ltd (1990) 18 IPR 270; (1990) ATPR 41-030 .... 10.25, 10.27, 10.27C2 Malleys Ltd v JW Tomlin Pty Ltd (1961) 35 ALJR 352; 1A IPR 559 .... 5.7 Mantra Group Pty Ltd v Tailly Pty Ltd (No 2) (2010) 267 ALR 347; 86 IPR 19; [2010] FCA 291 .... 7.47, 19.55C Mantra Pty Ltd v Spagnuolo (2012) 290 ALR 158; 96 IPR 464; [2012] FCA 769 .... 7.12 Mareva Compania Naviera SA v International Bulkcarriers SA (The Mareva) [1980] 1 All ER 213 .... 2.57 Mark Foy’s Ltd v Davies Co-op & Co Ltd (1956) 95 CLR 190; 1A IPR 470; [1956] HCA 41 .... 7.47C1, 7.48C2, 7.56C3 Mark Lyons Pty Ltd v Bursill Sportsgear Pty Ltd (1987) 75 ALR 581; (1987) ATPR 40-809 .... 12.46, 13.56C, 16.20, 17.14, 17.24 Marks & Spencer plc v One In A Million (1997) 42 IPR 309; [1998] FSR 265 .... 6.33C2, 19.65C Marlbro Shelving Systems Pty Ltd v ARC Engineering Pty Ltd (1983) 72 FLR 418; (1983) ATPR 40-355 .... 6.25

Mars Australia Pty Ltd v Sweet Rewards Pty Ltd (2009) 81 IPR 354; [2009] FCA 606 .... 6.11, 6.11C3, 6.13, 6.25, 6.41, 7.48 — v — (2009) 84 IPR 12; [2009] FCAFC 174 .... 6.11C3 Mars Australia Pty Ltd (formerly Effem Foods Pty Ltd) v Société des Produits Nestlé SA (2010) 86 IPR 581; [2010] FCA 639 .... 7.26 Master Abrasives Corporation v Williams 469 NE 2d 1196 (1984) .... 18.13 Master Education Services Pty Ltd v Ketchell (2008) 236 CLR 101; 249 ALR 44; [2008] HCA 38 .... 18.22 Mayne Nickless Ltd (t/as M SS Alarm Services (reg’d)) v Crawford (1992) ASC 56-188 .... 9.44C McCarthy v Australian Rough Riders Association Inc (1988) ATPR 40-836 .... 13.49C, 13.74 McCormack v Hankscraft Co 278 Minn 322 (1967) .... 9.52 McCormick & Co Inc v McCormick (2000) 51 IPR 102; [2000] FCA 1335 .... 7.50 McDonald’s Corporation, Re Applications by (1986) 9 IPR 509 .... 7.42 — v Bellamy (2004) 62 IPR 133; (2004) AIPC 91-995 .... 7.42C1 — v Lubowski [2004] ATMO 56 .... 7.42C1, 7.52 McDonald’s System (Aust) Pty Ltd v McWilliam’s Wines Pty Ltd (No 2) (1979) 28 ALR 236; 41 FLR 436; (1979) ATPR 40-140 .... 7.53 McGrath v Australian Naturalcare Products Pty Ltd (2008) 165 FCR 230 .... 10.24 McIllhenny Co v Blue Yonder Holdings Pty Ltd formerly t/as Tabasco Design (1997) 149 ALR 496; 39 IPR 187; (1997) ATPR 41-587 .... 7.53 McInnes v Global Imports Pty Ltd (1993) ASC 56-199; (1993) ATPR 41-206 .... 9.66 McWilliams Wines Pty Ltd v McDonald’s System (Aust) Pty Ltd (1980) 33 ALR 394; (1980) ATPR 40-188 .... 10.17, 10.19 Meat & Livestock Australia Ltd v Cargill, Inc [2018] FCA 51; (2018) 354 ALR 95; 129 IPR 278 .... 2.11 Media Council of Australia, Re (1996) ATPR 41-497 .... 12.62 — (No 2), Re (1987) 88 FLR 1; (1987) ATPR 40-774 .... 10.1, 10.77

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Marketing and the Law Medical Benefits Fund of Australia Ltd v Cassidy; John Bevins Pty Ltd v Cassidy (2003) 205 ALR 402; (2003) ATPR 41-971; [2003] FCAFC 289 .... 10.16, 10.21, 10.43, 10.50, 10.56C2 Medtel Pty Ltd v Courtney (2003) 198 ALR 630; (2003) ATPR 41-939; [2003] FCAFC 151 .... 9.35C Melbourne Chinese Press Pty Ltd v Australian Chinese Newspaper Pty Ltd (2004) 63 IPR 38; [2004] FCAFC 201 .... 4.17, 6.40C Mense & Ampere Electrical Manufacturing Co Pty Ltd v Milenkovic [1973] VR 784 .... 3.11, 3.17C2 Merchandising Corp of America Inc v Harpbond Ltd [1983] FSR 32 .... 4.7, 4.17 Metrans Pty Ltd v Courtney-Smith (1983) 1 IPR 185 .... 3.14 Metro-Goldwyn-Mayer Studios Inc v Grokster Ltd 125 SCt 2764 (2005) .... 4.61 Meyers Taylor Pty Ltd v Vicarr Industries Ltd (1977) 137 CLR 228 .... 2.13 Miller v Cunninghams Warehouse Sales Pty Ltd (1994) ATPR 41-321 .... 9.66 — v Fiona’s Clothes Horse of Centrepoint Pty Ltd (1989) ATPR 40-963 .... 9.43, 10.49 Milpurrurru, Marika, Payunka & Public Trustee for the Northern Territory v Indofurn Pty Ltd, Bethune, King & Rylands (1994) 130 ALR 659; 30 IPR 209 .... 4.39 Minnesota Mining & Manufacturing Co, Re [2002] ATMO 8 .... 7.26 — v Beiersdorf (Australia) Ltd (1980) 144 CLR 253; 29 ALR 29; 1A IPR 231 .... 2.19, 2.21C1, 2.47 Mogul Steamship Co Ltd v McGregor Gow & Co [1892] AC 25; [1891–4] All ER Rep 263 .... 13.4 Monroe Topple & Associates Pty Ltd v Institute of Chartered Accountants in Australia (2002) ATPR 41-879; [2002] FCAFC 197 .... 12.36 Moore v Microsoft Corp 741 NYS 2d 91 (NY App Div 2002) .... 19.9 Moorgate Tobacco Co Ltd v Philip Morris Ltd (No 2) (1984) 156 CLR 414; 56 ALR 193; 3 IPR 545 .... 3.13C2, 6.3 Morphett Arms Hotel Pty Ltd v Trade Practices Commission (1980) 30 ALR 88; (1980) ATPR 40-157 .... 13.10C Motorcycling Events Group Australia Pty Ltd v Kelly [2013] NSWCA 361 .... 9.22C

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Mr Figgins Pty Ltd v Centrepoint Freeholds Pty Ltd (1981) 36 ALR 23; (1981) ATPR 40-226 .... 11.19 Muscat v Le (2003) 204 ALR 335; 60 IPR 276; [2003] FCA 1540 .... 4.18 Musidor BV v Tansing (t/as Apple Music House) (1995) 123 ALR 593; 29 IPR 203 .... 7.47C2

N Narhex Australia Pty Ltd v Sunspot Products Pty Ltd (1990) 18 IPR 535; (1990) ATPR 41-036 .... 10.27 Nashua Australia Pty Ltd, Re (1975) 1 TPCD [168] .... 17.11 National Phonograph Company of Australia Ltd v Menck (1911) 12 CLR 15; 28 RPC 229; [1911] AC 336 .... 2.45 National Research Development Corporation v Commissioner of Patents (1959) 102 CLR 252; 1A IPR 63; [1961] RPC 134 .... 2.7C, 2.9 Nationwide News Pty Ltd v ACCC (1996) 142 ALR 212; 37 IPR 391; (1997) ATPR 41-543 .... 10.49C2, 11.11 — v Copyright Agency Ltd (1996) 65 FCR 399; 136 ALR 274; 34 IPR 53 .... 4.21 Nature’s Care Manufacture Pty Ltd v Australian Made Campaign Ltd [2018] FCA 1936; (2018) 363 ALR 717 .... 8.15C Neobev Pty Ltd v Bacchus Distillery Pty Ltd (admins apptd) (No 3) (2014) 104 IPR 249; [2014] FCA 4 .... 2.37 Network Ten Pty Ltd v TCN Channel Nine Pty Ltd (2004) 218 CLR 273; 205 ALR 1; 59 IPR 1; [2004] HCA 14 .... 4.21, 4.21C New South Wales Dairy Corp v Murray Goulburn Co-operative Co Ltd (No 1) (1989) 86 ALR 549; 14 IPR 26 .... 7.50 New South Wales Glass Merchants’ Association, Re (1980) 4 TPR 237 .... 13.71 News Ltd v Australian Rugby Football League Ltd (1996) 135 ALR 33; (1996) ATPR 41-466 .... 12.28, 12.38, 12.46, 13.48 Newton-John v Scholl-Plough (Australia) Ltd (1986) 11 FCR 233; (1986) ATPR 40-697 .... 6.14, 6.42, 6.43, 10.21C Nexus Adhesives Pty Ltd v RLA Polymers Pty Ltd (2012) 97 IPR 160; [2012] FCAFC 135 .... 3.18, 3.28

Table of Cases Nike International Ltd v Champion Socks Pty Ltd [2001] ATMO 117 .... 7.42, 7.49 Noodle Box Pty Ltd v Dave’s Noodle Box [2002] FCA 579 .... 7.48C1 Norcast S.ár.L v Bradken Ltd (No 2) (2013) 302 ALR 486; [2013] FCA 235 .... 12.35, 13.19, 13.43, 13.43C4 Nordenfelt v Maxim Nordenfelt Guns & Ammunition Co Ltd [1894] AC 535; [1891–4] All ER Rep 1 .... 3.31, 3.32, 3.34C, 18.26 Norton Australia Pty Ltd v Streets Ice Cream Pty Ltd (1968) 120 CLR 635 .... 8.4, 9.11C Nostac Enterprises v New Concept Imports Services Pty Ltd (1981) ATPR 43-135 .... 6.42 NT Power Generation Pty Ltd v Power and Water Authority (2004) 219 CLR 90; 210 ALR 312; [2004] HCA 48 .... 14.21, 14.21C Nutrientwater Pty Ltd v Baco Pty Ltd (2010) 265 ALR 140; 84 IPR 452; [2010] FCA 2 .... 6.11, 6.11C3, 6.25 NV Philips Gmb v Mirabella International (1995) 183 CLR 655; 132 ALR 117; 70 ALJR 13 .... 2.9 NW Frozen Foods Pty Ltd v ACCC (1996) 141 ALR 640; (1997) ATPR 41-546 .... 12.25 Nylex Corporation Ltd v Sabco Ltd (1987) ATPR 40-752 .... 6.24, 6.25

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O Obadiah Pty Ltd, Application by (1980) ATPR 40-176 .... 13.71 O’Brien v Smologonov (1983) 53 ALR 107; 2 IPR 68; (1983) ATPR 40-418 .... 10.9, 11.18 O’Brien Glass Industries Ltd v Cool & Sons Pty Ltd (1983) 48 ALR 625; (1983) ATPR 40-376 .... 13.56, 16.19, 17.10 O’Bryen v Coles Myer Ltd (1993) ATPR 41-209 .... 8.9C, 9.66 O’Dwyer v Leo Buring Pty Ltd [1966] WAR 67 .... 9.10C2 O’Mustad & Son v S Allcock & Co Ltd [1963] 3 All ER 416; [1963] RPC 41 .... 3.5 Opals Australia Pty Ltd v Opal Australiana Pty Ltd (1993) ATPR 41-264 .... 6.27C3 Optus Networks Pty Ltd v Telstra Corporation Ltd (2010) 265 ALR 281; [2010] FCAFC 21 .... 3.28 Optus Networks Pty Ltd Infringement Notice proceedings .... 19.13C2

Ormonoid Roofing & Asphalts v Bitumenoids Ltd (1930) 31 SR (NSW) 347; 48 WN (NSW) 66 .... 3.28 Oroton Pty Ltd v Kovac (1994) 31 IPR 145 .... 7.42 Outboard Marine Australia Pty Ltd v Hecar Investments (No 6) Pty Ltd (1982) 44 ALR 667; (1982) ATPR 40-327 .... 17.9, 17.9C, 17.23, 17.24, 17.24C Owens-Corning Fiberglass Corp, Re 774 F 2d 1116 (Fed Cir 1985) .... 7.26

P Pacific Dunlop Ltd v Bonny (1995) 31 IPR 511 .... 7.42 — v Hogan (1989) 87 ALR 14; 14 IPR 398; (1989) ATPR 40-948 .... 6.45, 10.19, 10.29C Pacific Publications Pty Ltd v IPC Media Pty Ltd (2003) 57 IPR 28; [2003] FCA 104 .... 6.25 Paciocco v Australia and New Zealand Banking Group Ltd [2015] FCAFC 50; (2015) 236 FCR 199 .... 18.25 Paisley v Aitchison trading as Dean Cars (Civil Claims) [2012] VCAT 1483 .... 9.17C1 Panasonic Australia Pty Ltd v Burstyner (1993) ASC 56-214; (1993) ATPR 41-224 .... 9.33 Panorama Developments (Guildford) Ltd v Fidelis Furnishing Fabrics Ltd [1971] 2 QB 711; [1971] 3 All ER 16 .... 11.20 Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 1; 42 ALR 1; 1A IPR 684; (1982) ATPR 40-307 .... 5.32, 5.32C, 6.25, 10.11, 10.13, 10.17, 10.18 Parry’s Pty Ltd v Simpson Ltd (1983) 76 FLR 60 .... 16.30C Partridge v Crittenden [1968] 2 All ER 421 .... 19.7 Partyka v Wilkie (1982) ASC 55-213 .... 11.24 Pasterfield v Denham [1999] FSR 168 .... 4.26 Paul Dainty Corp Pty Ltd v National Tennis Centre Trust (1990) 94 ALR 225; (1990) ATPR 41-029 .... 17.15C2 Pepsico Australia Pty Ltd v Kettle Chip Co Pty Ltd (1996) 135 ALR 192; 33 IPR 161 .... 7.56C2 Perez v Fernandez (2012) 260 FLR 1; [2012] FMCA 2 .... 4.26C3 Performing Right Society Ltd v Harlequin Record Shops Ltd [1979] 2 All ER 828 .... 4.46 Perre v Apand Pty Ltd (1999) 198 CLR 180; 164 ALR 606 .... 9.4

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Marketing and the Law Peter Bodum A/S v DKSH Australia Pty Ltd (2011) 280 ALR 639; 92 IPR 222; [2011] FCAFC 98 .... 6.3, 6.31 Peter Isaacson Publications Pty Ltd v Nationwide News Pty Ltd (1984) 56 ALR 595; 3 IPR 255 .... 6.21 Peter Szabo and Associates Pty Ltd, Re (2005) 66 IPR 370; [2005] APO 24 .... 2.8C1 Peter Williamson Pty Ltd v Capitol Motors Ltd (1982) 41 ALR 613; 61 FLR 257; (1982) ATPR 40-291 .... 16.20C2 Peters Ice Cream (Vic) Ltd v Todd [1961] VR 485 .... 3.36 Petty v Penfolds Wines Pty Ltd (1994) ATPR 41-320 .... 13.56C Pfizer Ltd’s Patent [2001] FSR 16 .... 2.19 Pharma-Buy Application, Re (1975) 3 TPR 452 .... 13.67, 13.73 Philmac Pty Ltd v Registrar of Trade Marks (2002) 56 IPR 452; [2002] FCA 1551 .... 7.24, 7.26C Pilbara Infrastructure Pty Ltd v Australian Competition Tribunal [2010] FCA 1118 .... 14.37C Pinetrees Lodge Pty Ltd v Atlas International Pty Ltd (1981) 38 ALR 187; 59 FLR 244 .... 6.38C Pioneer Electronics Australia Pty Ltd v Lee (2000) 51 IPR 291; [2000] FCA 1926 .... 4.67 Playcorp Group of Companies Pty Ltd v Peter Bodum A/S (2010) 84 IPR 542; [2010] FCA 23 .... 5.32 Players Trade Mark, Re [1965] RPC 363 .... 7.34C2, 7.38, 7.52 Pokémon Company International, Inc v Redbubble Ltd (2017) 351 ALR 676; 129 IPR 1; [2017] FCA 1541 .... 4.50 Polaroid Corporation v Sole N Pty Ltd [1981] 1 NSWLR 491 .... 7.48C1 Polite Chnika Ipari Szouetkezet v Dallas Print Transfers Ltd [1982] FSR 529 .... 6.7 Polo/Lauren Company LP v Ziliani Holdings Pty Ltd (2008) 75 IPR 143; [2008] FCA 49 .... 4.67 Polwood Pty Ltd v Foxworth Pty Ltd (2008) 244 ALR 626; 75 IPR 1; [2008] FCAFC 9 .... 2.37C Populin v HB Nominees Pty Ltd; Populin v Binder (1982) 41 ALR 471 .... 2.47 Poulet Frais Pty Ltd v Silver Fox Co Pty Ltd (2005) 220 ALR 211; [2005] FCAFC 131 .... 18.8, 18.24C2

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Press-Form Pty Ltd v Hendersons Ltd (1993) 112 ALR 671; 26 IPR 113 .... 4.55, 5.16 Printers & Finishers Ltd v Holloway (No 2) [1964] 3 All ER 731; [1965] RPC 239 .... 3.19C1 Product Management Group Pty Ltd v Blue Gentian LLC (2015) 116 IPR 54; 240 FCR 85; [2015] FCAFC 179 .... 2.32 Professional Liquor & Catering Enterprise Pty Ltd v Corporate Affairs Commission [1982] ACLD 563 .... 7.70

Q Qantas Airways Ltd, Re [2004] ACompT 9 .... 15.14 Qantas Airways Ltd v Cameron (1996) 66 FCR 246; 145 ALR 294; (1996) ATPR 41-487 .... 11.24 QCMA, Re; Application for Authorisation of Acquisition of Macquarie Generation by AGL Energy Ltd (AGL Energy case) [2014] ACompT 1 .... 15.14 QIW Retailers Ltd & Attorney-General (Cth) v Davids Holdings Pty Ltd (No 3) (1993) 114 ALR 579; (1993) ATPR 41-226 .... 12.43 Quadramain Pty Ltd v Sevastopol Investments Pty Ltd (1976) 133 CLR 390; 8 ALR 555; (1976) ATPR 40-013 .... 12.17 Queensland Co-operative Milling Association Ltd and Defiance Holdings Ltd, Re (1976) 8 ALR 481; (1976) ATPR 40-012 .... 12.41, 12.44, 12.45, 12.47, 12.51, 12.59, 12.60, 13.70 Queensland Grocery Groups, Re (1979) ATPR 35-340 .... 13.67, 13.73C Queensland Independent Wholesalers Ltd, Re (1995) 132 ALR 225; (1995) ATPR 41-438 .... 12.57, 12.58, 12.59 Queensland Wire Industries Pty Ltd v Broken Hill Proprietary Co Ltd (1989) 167 CLR 177; 83 ALR 577; [1989] HCA 6 .... 1.29, 12.41, 12.43, 12.51, 14.3, 14.9C1, 14.10, 14.11, 14.21

R R v Associated Northern Collieries (1911) 14 CLR 387; [1911] HCA 73 .... 13.10 R & C Products Pty Ltd v Hunters Products Pty Ltd (1988) ATPR 40-839 .... 6.30C, 10.13 — v S C Johnson & Sons Pty Ltd (1994) ATPR 41-364 .... 6.37C, 10.23

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Table of Cases R Conroy Pty Ltd v L’Oreal (2004) AIPC 92-007 .... 7.62 Radio 2UE Sydney Pty Ltd v Chesterton (2009) 238 CLR 460; 254 ALR 606; [2009] HCA 16 .... 19.57 — v Stereo FM Pty Ltd (1982) 44 ALR 557; (1982) ATPR 40-318 .... 12.36, 13.23 Radio Corporation Pty Inc v Disney (1937) 57 CLR 448 .... 6.42 Rank Film Production Ltd v Dodds [1983] 2 NSWLR 553 .... 4.46 Ransley v Black & Decker (A/Asia) Pty Ltd (1978) 3 TPR 138; 2 TPC 343 .... 10.43 — v Spare Parts & Reconditioning Co Pty Ltd (1975) ATPR 40-055 .... 10.37 Rasbora Ltd v JCL Marine Ltd [1977] 1 Lloyd’s Rep 645 .... 9.10C1 Ravenscroft v Herbert & New English Library Ltd [1980] RPC 193 .... 4.39 Rawhide Trade Mark, Re [1962] RPC 133 .... 7.42C4 REA Group Ltd v Real Estate 1 Ltd (2013) 102 IPR 1; [2013] FCA 559 .... 6.5, 6.27C4, 7.48 Real Estate Institute of the ACT, Re (1985) ATPR 50-087 .... 13.71 Reardon v Morley Ford Pty Ltd (1980) 33 ALR 417; 49 FLR 401; (1980) ATPR 40-190 .... 11.13, 11.17C Reckitt & Colman Products Ltd v Borden Inc (1990) 17 IPR 1; [1990] 1 All ER 873; [1990] 1 WLR 491 .... 6.3, 8.3, 8.3C, 10.17 Redrock Holdings Pty Ltd v Hinkley (2001) 50 IPR 565; [2001] VSC 91 .... 4.29C Regent’s Pty Ltd v Subaru (Australia) Pty Ltd (1998) 42 IPR 421; (1998) ATPR 41-647 .... 12.46 Registrar of Trade Marks v Muller (1980) 31 ALR 177; 54 ALJR 513 .... 7.21 Rentokil Pty Ltd v Lee (1996) ATPR 41-451 .... 3.31, 3.35, 3.35C1 Research Affiliates LLC v Commissioner of Patents (2014) 316 ALR 135; 109 IPR 364; [2014] FCAFC 150 .... 2.8C2 Retail Confectionery and Mixed Business Association (Vic) (1977–8) ATPR (Com) 35-340 .... 13.74C Retail Tobacco Sellers Association of Victoria (1982) ATPR (Com) 50-040 .... 13.74 Retra Service Association (1977–8) ATPR (Com) 35-340 .... 13.74

Retractable Technologies Inc v Occupational and Medical Innovations Ltd (2007) 72 IPR 58; [2007] FCA 545 .... 3.29 Review 2 Pty Ltd v Redberry Enterprise Pty Ltd (2008) 79 IPR 214; [2008] FCA 1588 .... 5.12 Rhone-Poulenc Agrochimie SA v UIM Chemical Services Pty Ltd (1986) 12 FCR 477; 68 ALR 77 .... 2.48 Roadshow Films Pty Ltd v iiNet Ltd (2012) 286 ALR 466; 95 IPR 29; [2012] HCA 16 .... 4.63, 4.63C, 4.71 Robb v Green [1895] 2 QB 315 .... 3.18C2 Robe River Mining Co Pty Ltd and Hamersley Iron Pty Ltd, Re Applications by [2013] ACompT 2 .... 14.37C Robert Hicks Pty Ltd (t/as Auto Fashions Australia) v Melway Publishing Pty Ltd (1998) 42 IPR 627; (1999) ATPR 41-668 .... 12.55 Robertson v Lewis [1976] RPC 169 .... 4.28 Robyn Rihanna Fenty v Arcadia Group Brands Ltd (t/a Topshop) [2015] EWCA Civ 3 .... 6.42 Rodrigues v ABE Copiers Pty Ltd (1983) ATPR 40-379 .... 10.39 Roland Corporation v Lorenzo & Sons Pty Ltd (1991) 105 ALR 623; 22 IPR 245 .... 4.17, 4.44 Rolls-Royce Ltd’s Application [1963] RPC 251 .... 2.12 Rolls-Royce Motors Ltd v DIA (Engineering) Pty Ltd (1981) 50 FLR 340 .... 6.38C Ron Hodgson (Holdings) Pty Ltd v Westco Motors (Distributors) Pty Ltd (1980) 29 ALR 307 .... 16.20, 16.23C1 Rosedale Associated Manufacturers Ltd v Airfix Products Ltd [1957] RPC 239 .... 5.15 Roses Only & Lush Pty Ltd v Mark Lyons Pty Ltd (1999) 47 IPR 593; [1999] FCA 1000 .... 6.25 Row Weeder Pty Ltd v Nielsen (1997) 39 IPR 400 .... 2.37 Rowntree plc v Rollbits Pty Ltd (1988) 10 IPR 539 .... 7.39, 7.51C Rural Press Ltd v ACCC (2003) ATPR 41-965; [2003] HCA 75 .... 12.36, 13.8, 13.39C2, 13.44, 13.49, 14.18 Rural Traders Co-operative (WA) Ltd, Re (1979) ATPR 40-110 .... 12.59 Ryan v Great Lakes Council (1999) ATPR 46-191; [1999] FCA 177 .... 10.25

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S S C Johnson & Son Inc, Re Application by (1989) 15 IPR 349; (1989) AIPC 90-595 .... 7.21 Sabre Corp Pty Ltd v Laboratories Pharma-ACare Pty Ltd (1995) 31 IPR 445; (1995) ATPR 41-396 .... 10.23 Safe Sport Australia Pty Ltd v Puma Australia Pty Ltd (1985) 4 IPR 120 .... 5.14 SAGASCO Resources Ltd, Re (1992) ATPR (Com) 50-118 .... 13.72 Saints Gallery Pty Ltd v Plummer (1988) 80 ALR 525; (1988) ATPR 40-882 .... 11.19 Saltman Engineering Co Ltd v Campbell Engineering Co Ltd [1963] 3 All ER 413 .... 3.5, 3.11C, 3.24 Samuel Taylor Pty Ltd v Registrar of Trade Marks (1959) 102 CLR 650 .... 7.21 Sanrod Pty Ltd v Dainford Ltd (1984) 54 ALR 179; (1984) ATPR 40-464 .... 11.20 Schweppes Ltd v Rowlands Proprietary Ltd (1913) 16 CLR 162; [1913] HCA 18 .... 7.14 Scotch Whisky Association v De Witt (2008) 75 IPR 280; [2008] FCA 73 .... 7.41C1 Seager v Copydex Ltd [1967] 2 All ER 415; [1967] 1 WLR 923; [1967] RPC 349 .... 3.24C, 3.26 Secretary, Department of Health v Peptide Clinics Australia Pty Ltd [2019] FCA 1107 .... 8.27 Sest v Copperart Pty Ltd (1989) ATPR 40-945 .... 10.45C1 Seven Network Ltd v News Ltd (2009) 262 ALR 160; [2009] FCAFC 166 .... 12.42 Shacklady v Atkins & Carroll (1994) 126 ALR 707; 30 IPR 387 .... 4.40 Sharman v Kunert (1985) 1 NSWLR 225; (1985) ASC 55-425 .... 11.24 Shoshana Pty Ltd v 10th Cantanae Pty Ltd (1987) 79 ALR 279; 11 IPR 249; (1988) ATPR 40-851 .... 10.19 Shredded Wheat Co v Kellogg Co of Great Britain (1939) 57 RPC 137 .... 7.21 Siddons Pty Ltd v Stanley Works Pty Ltd (1991) 99 ALR 497; 20 IPR 1; (1991) ATPR 41-111 .... 8.14C2, 10.20, 10.37 Silver Fox Co Pty Ltd v Lenard’s Pty Ltd (2004) ATPR 42-024; [2004] FCA 1225 .... 11.21 Silver Top Taxi Services (1990) ATPR (Com) 50-103 .... 13.74

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Sim v HJ Heinz Co Ltd [1959] 1 All ER 547; [1959] RPC 75 .... 6.44 Simplot Australia Pty Ltd v McCain Foods (Aust) Pty Ltd (2001) 52 IPR 539; [2001] FCA 518 .... 6.11, 6.27C2 Sinanide v La Maison Kosmeo (1928) 44 TLR 574 .... 4.11 Singapore Airlines v Taprobane Tours WA Pty Ltd (1991) 104 ALR 633; (1992) ATPR 41-159 .... 12.38, 14.9C2 Sizzler Restaurants International v Sabra International Pty Ltd (1990) 20 IPR 331 .... 7.42C3 Smith Kline & French Laboratories (Australia) Ltd v Secretary, Department of Community Services and Health [1989] FCA 384 .... 3.3 SNF (Australia) Pty Ltd v Ciba Speciality Chemicals Water Treatments Ltd (2012) 96 IPR 365 .... 2.32C — v — [2013] HCATrans 54 .... 2.32C Snow v Eaton Centre (1982) 70 CPR (2d) 105 .... 4.26C1 Société Des Produits Nestlé SA v Aldi Stores [2010] FCA 218 .... 7.27 Solar Thompson Engineering Co Ltd v Barton [1977] RPC 537 .... 2.45 Solarhart Industries Pty Ltd v Solar Shop Pty Ltd (2011) 281 ALR 544; 92 IPR 165; [2011] FCA 700 .... 6.15, 7.47 Sony Music Australia Ltd v Tansing (t/as Apple House Music) (1993) 27 IPR 649; (1993) 27 IPR 640; (1993) ATPR 41-279 .... 6.26C, 6.42 South Australian Brewing Co Pty Ltd v Carlton & United Breweries Ltd (2001) 185 ALR 719; 53 IPR 90; [2001] FCA 902 .... 7.56 Southern Cross Beverages Pty Ltd, Cadbury Schweppes Pty Ltd, Application of (1981) ATPR 40-200 .... 12.46, 17.28 Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd (1954) 91 CLR 592; 1A IPR 465 .... 7.34, 7.49 Spencer Industries Pty Ltd v Collins (2003) 58 IPR 425; [2003] FCA 542 .... 2.40C1 St Lukes Health Insurance v Medical Benefits Fund of Australia Ltd (1995) ATPR 41-428 .... 10.12, 10.22, 10.22C Stannard v Reay [1967] RPC 589 .... 6.5C1

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Table of Cases Star Industrial Co Ltd v Yap Kwee Kor t/as New Star Industrial Co (1975) 1B IPR 582; [1976] 2 FSR 256 .... 6.2 State of Victoria v Pacific Technologies (Australia) Pty Ltd (No 2) (2009) 81 IPR 525; [2009] FCA 737 .... 4.11 Stationers Supply Pty Ltd v Victorian Authorised Newsagents Association Ltd (1993) ATPR 41-255 .... 17.15 Stenor Ltd v Whitesides (Clitheroe) Ltd [1948] AC 107; [1947] 2 All ER 241; (1947) 65 RPC 1 .... 5.7 Sterling Winthrop Pty Ltd v Boots Co (Aust) Pty Ltd (1995) 32 IPR 361; (1995) ATPR 41-433 .... 10.25, 10.26C2 — v R & C Products Pty Ltd (1994) ATPR 41-308 .... 6.25, 8.3, 10.13 Steven v Parke, Davis & Co 9 Cal 3d 51 (1973) .... 9.51 Stevens v Kabushiki Kaisha Sony Computer Entertainment (2005) 221 ALR 448; 65 IPR 513; [2005] HCA 58 .... 4.12 Stirling Harbour Services v Bunbury Port Authority (2000) ATPR 41-783; [2000] FCA 1381 .... 12.37, 17.18, 17.23, 17.25, 17.25C Stone & Wood Group Pty Ltd v Intellectual Property Development Corporation Pty Ltd (2018) 357 ALR 15; [2018] FCAFC 29 .... 6.11, 6.11C4, 6.13, 6.25 Streetscape Projects (Australia) Pty Ltd v City of Sydney (2013) 295 ALR 760; 92 ACSR 417; [2013] NSWCA 2 .... 3.29 Strong v Woolworths Ltd [2012] HCA 5 .... 9.12C Stuart Alexander and Co (Interstate) Pty Ltd v Blenders Pty Ltd (1981) 37 ALR 161 .... 6.22C, 6.25, 10.16C, 10.27, 10.27C3 Sullivan v FNH Investments Pty Ltd (2003) 57 IPR 63; [2003] FCA 323 .... 4.11 Sunbeam Corp v Morphy-Richards (Aust) Pty Ltd (1961) 180 CLR 98; 1B IPR 625 .... 2.15 Surge Licensing Inc v Pearson (1991) 21 IPR 228; (1991) ASC 56-077 .... 6.45 SW Hart & Co Pty Ltd v Edwards Hot Water Systems (1985) 159 CLR 466; 61 ALR 251; 5 IPR 13; [1985] HCA 59 .... 4.18, 4.40 Swarbrick v Burge (2004) 208 ALR 19; 61 IPR 543; [2004] FCA 813 .... 4.18 Sydney Markets Ltd v Sydney Flower Market Pty Ltd [2002] FCA 124 .... 6.33, 6.33C4

Sydneywide Distributors Pty Ltd v Red Bull Australia Pty Ltd (2002) 55 IPR 354; [2002] FCAFC 157 .... 6.3, 6.11, 6.11C2, 6.25, 8.3

T Taco Co of Australia Inc v Taco Bell Pty Ltd (1982) 42 ALR 177; (1982) ATPR 40-303 .... 6.19, 6.32C, 10.11, 10.13 Talbot v General Television Corporation Pty Ltd [1980] VR 224; [1981] RPC 1 .... 3.4, 3.6, 3.12C, 3.24, 3.29 Talmax Pty Ltd v Telstra Corp Ltd [1997] 2 Qd R 444; (1996) 36 IPR 46; (1996) ATPR 41-535 .... 6.42, 6.43C2, 10.29 Tame v State of New South Wales; Annetts v Australian Stations Pty Ltd (2002) 191 ALR 449; 36 MVR 1; [2002] HCA 35 .... 9.6 Targetts Pty Ltd v Target Australia Pty Ltd (1993) 26 IPR 51; (1993) ATPR 41-231 .... 6.10C Tasmanian Automobile Chamber of Commerce (1978) ATPR (Com) 16,995 .... 13.74 Taverner Rutledge Ltd v Trexapalm Ltd [1977] RPC 275 .... 4.11 TCN Channel Nine Pty Ltd v Network Ten Pty Ltd (No 2) (2005) 216 ALR 631; 65 IPR 571; [2005] FCAFC 53 .... 4.48C, 4.50 Telstra Corporation Ltd (2013) Investigation of the Office of the Australian Information Commissioner .... 19.45C Telstra Corporation Ltd v Australasian Performing Right Association Ltd (1997) 146 ALR 649; 71 ALJR 1312; 38 IPR 294; [1997] HCA 41 .... 4.46 — v Barry Cheng Kwok (WIPO Administrative Panel decision, 21 June 2000, unreported) .... 19.62 — v Optus Communications (1996) 26 IPR 515; (1997) ATPR 41-541 .... 10.16, 10.27 — v Phone Directories Company Pty Ltd (2010) 273 ALR 725; 90 IPR 1; [2010] FCAFC 149 .... 4.8, 4.10C — v Royal & Sun Alliance Insurance Pty Ltd (2003) 57 IPR 453; [2003] FCA 786 .... 4.39, 4.42C2, 6.37, 6.42 Tenant Trading (Australia) Pty Ltd, Application of (1974-5) ATPR (Com) 8608 .... 13.66 Terrapin Ltd v Builders Supply Company (Hayes) Ltd (1959) 1B IPR 777; [1960] RPC 128 .... 3.26

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Marketing and the Law TGI Friday’s Australia Pty Ltd v TGI Friday’s Inc (1999) 45 IPR 43; [1999] FCA 304 .... 6.3 Thai Silk Co Ltd v Aser Nominees Pty Ltd (1991) ATPR 41-146 .... 6.24 Thomas v Southcorp Australia Pty Ltd [2004] VSC 34 .... 9.53C2 Thomas Marshall (Exports) Ltd v Guinle [1979] Ch 227; [1978] 3 All ER 193 .... 3.7, 3.13C1, 3.20 Thompson v Magnamail Pty Ltd (No 1) (1977) ATPR 40-032 .... 10.37 — v Riley McKay Pty Ltd (No 3) (1980) ATPR 40-175 .... 10.43 Thomson v B Seppelt & Sons Ltd (1925) 37 CLR 305; [1925] HCA 40 .... 7.21, 7.21C2 Thorp v CA Imports Pty Ltd (1989) 16 IPR 511; (1990) ATPR 40-996 .... 10.61 Tidy v Trustees of the Natural History Museum (1995) 39 IPR 501 .... 4.26C2 Tillmans Butcheries Pty Ltd v Australian Meat Industry Employees’ Union (1979) 27 ALR 367; (1979) ATPR 40-138 .... 12.36 Tobacco Institute (Aust) Ltd v Australian Federation of Consumer Organisations Inc (1992) 111 ALR 61; 24 IPR 529; (1993) ATPR 41-199 .... 10.9, 10.23C2, 10.26 Toddler Kindy Gymbaroo Pty Ltd v Gym-Mark Inc (2013) 101 IPR 579; [2013] ATMO 15 .... 7.62 Tooheys Pty Ltd v Coopers Brewery Ltd [2003] FCA 148 .... 10.68 Tooltechnic Systems (Australia) Pty Ltd — Authorisation No. A91433 (2014) .... 16.2, 16.15, 16.25C Tooth & Co Ltd, Re; Re Tooheys Ltd (1979) ATPR 40-113 .... 12.41C, 12.45, 12.59, 17.9, 17.29C Torpedoes Sportswear Pty Ltd v Thorpedo Enterprises Pty Ltd (2003) 204 ALR 90; 59 IPR 318; [2003] FCA 901 .... 6.42, 7.42C2 Toscano v Holland Securities Pty Ltd (1985) 1 NSWLR 145 .... 11.24 Totalizator Agency Board v Turf News Pty Ltd [1967] VR 605 .... 6.13C, 6.14, 6.15, 6.26 Trade Practices Commission v Allied Mills Industries Pty Ltd (No 4) (1981) 37 ALR 225; (1981) ATPR 40-237 .... 13.14C — v Australian Autoglass Pty Ltd (1988) ATPR 40-881 .... 13.25

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— v Bamix Australia Pty Ltd (1985) ATPR 40-534 .... 16.28C1 — v Bata Shoe Co of Australia (1980) ATPR 40-161 .... 16.2, 16.10, 16.14, 16.15, 16.20C1, 16.28 — v Calderton Corp Pty Ltd (1994) ATPR 41-306 .... 11.10, 11.10C — v Carlton & United Breweries Ltd (1990) ATPR 41-037 .... 14.23C — v CC (NSW) Pty Ltd (No 2) (1995) ATPR 41406 .... 13.43C2 — v Commodore Business Machines Pty Ltd (1989) ATPR 40-976 .... 16.15 — v CSR Ltd (1991) ATPR 40-076 .... 1.46, 12.25, 17.9, 17.11 — v Cue Design Pty Ltd (1996) ATPR 41-475 .... 8.12C — v David Jones (Australia) Pty Ltd (1986) 64 ALR 67; (1986) ATPR 40-671 .... 13.14C, 13.21 — v Email Ltd (1980) 31 ALR 53; 43 FLR 383; (1980) ATPR 40-172 .... 13.8, 13.11C — v Gillette Company (No 1) (1993) ATPR 41267 .... 15.18 — v Golden Australia Paper Manufacturers Pty Ltd (1995) ATPR 41-370 .... 8.10C, 10.61 — v Golden Fleece Petroleum Ltd (1985) ATPR 40-528 .... 16.10 — v ICI Australia Petrochemicals (1983) ATPR 40-634 .... 16.2, 16.25 — v JJ & YK Russell Pty Ltd (1991) ATPR 41-090 .... 13.25 — v Kensington Hiring Co Pty Ltd (1981) ATPR 40-256 .... 16.23C1 — v Leslievale Pty Ltd (1986) 64 ALR 573 .... 16.1 — v Madad Pty Ltd (1979) 40 FLR 453; (1979) ATPR 40-105 .... 16.10, 16.15C2 — v Malleys Ltd (1979) 25 ALR 250; (1979) ATPR 40-118 .... 16.15 — v Mobil Oil Australia Ltd (1984) 3 FCR 168; 55 ALR 527; (1984) ATPR 40-482 .... 11.13 — v Nicholas Enterprises Pty Ltd (No 2) (1979) 26 ALR 609; (1978) ATPR 40-126 .... 10.34, 12.22, 12.44, 13.10C, 13.24 — v Orlane Australia Pty Ltd (1984) 51 ALR 767; (1984) ATPR 40-437 .... 16.16, 16.22C — v Pacific Dunlop Pty Ltd (1994) ATPR 41-307 .... 8.14C1 — v Parkfield Operations Pty Ltd (1985) 7 FCR 534; 62 ALR 267; (1985) ATPR 40-639 .... 13.23, 13.25

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Table of Cases — v Patterson Cheney Pty Ltd (1990) ATPR 41-059 .... 13.25 — v Penfolds Wines Pty Ltd (1991) 104 ALR 601; (1992) ATPR 41-163 .... 16.10 — v Pioneer Concrete (Vic) Pty Ltd (1985) ATPR 40-590 .... 13.23 — v Pye Industries Sales Pty Ltd (1979) ATPR 40-088 .... 16.17C — v Service Station Association Ltd (1992) 109 ALR 465; (1992) ATPR 41-179 .... 13.8, 13.23C3 — v — (1993) ATPR 41-260 .... 13.23C3 — v Sharp Corporation of Australia Pty Ltd (1975) 8 ALR 255; (1975) ATPR 40-010 .... 16.23C1 — v Simpson Pope Ltd (1980) 30 ALR 544; (1980) ATPR 40-169 .... 16.23C1, 16.30C — v Sony (Australia) Pty Ltd (1990) ATPR 41-053 .... 11.13 — v Stihl Chain Saws (Aust) Pty Ltd (1978) ATPR 49-091 .... 10.67, 16.2, 16.15C2, 16.28 — v Telstra Corp Ltd (1993) ATPR 41-256 .... 10.27 — v TNT Australia Pty Ltd (1995) ATPR 41-375 .... 1.46 — v Tubemakers of Australia Ltd (1983) 47 ALR 719; (1983) ATPR 40-358 .... 13.25 Transpacific Industries Pty Ltd v Whelan [2008] VSC 403 .... 3.35C2 Tru Tone Ltd v Festival Records Retail Marketing Ltd (1988) 2 NZBLC 103,081 .... 12.46 Turner v General Motors (Aust) Pty Ltd (1929) 42 CLR 352; 1B IPR 415 .... 6.5 Twentieth Century Fox Film Corp & Matt Groening Productions Inc v South Australian Brewing Co Ltd & Lion Nathan Pty Ltd (1996) 66 FCR 451; 34 IPR 225 .... 6.42, 6.45C, 10.18 Twenty-First Australia Inc v Shade [1998] NSWSC 325 .... 3.35

U Uebeler v Boss Media AB 03 CV 4790 (2006) .... 19.50 Ultra Tune Australia Pty Ltd v ACCC [2019] FCAFC 164 .... 18.24, 18.24C1 Unilan Holdings Pty Ltd v Kerin (1992) 107 ALR 709; (1992) ATPR 41-169 .... 10.9 Unilever Australia Ltd v Goodman Fielder Consumer Foods Pty Ltd [2009] FCA 1305 .... 10.37 — v Karounas (2001) 52 IPR 361; [2001] FCA 1132 .... 7.63C1

Union Car Advertising Co v Collier 189 N E 463 .... 11.19 Union Shipping New Zealand Ltd v Port Nelson Ltd [1990] 2 NZLR 662 .... 17.23 United Brands Co & United Brands Continentaal BV v Commission of European Communities [1978] 1 CMLR 429 .... 12.46 United States v Aluminum Co of America 148 F2d 416 (1945) .... 12.35 — v Microsoft Corp 253 F 3d 34 (DC Cir, 2001) .... 12.11 — v Socony-Vacuum Oil Co 310 US 150 (1940) .... 13.23C2, 13.30, 13.35 — v Trenton Potteries Co 273 US 392 (1927) .... 13.19 United Telecasters Queensland Ltd v Guthrie (1978) 18 ALR 531; (1978) ATPR 40-062 .... 10.60, 10.62C Universal Music Australia Pty Ltd v ACCC (2003) 201 ALR 636; 57 IPR 353; (2003) ATPR 41947; [2003] FCAFC 193 .... 12.46, 14.12, 14.14, 17.4, 17.26, 17.26C — v Sharman Licence Holdings Ltd (2005) 220 ALR 1; 65 IPR 289; [2005] FCA 1242 .... 4.61 — v TPG Internet Pty Ltd [2017] FCA 435; (2017) 348 ALR 493; 126 IPR 219 .... 4.71 University of London Press Ltd v University Tutorial Press Ltd [1916] 2 Ch 601; (1916) 1B IPR 186 .... 4.8 University of New South Wales v Moorhouse & Angus & Robertson (Publishers) Pty Ltd (1975) 133 CLR 1; 6 ALR 193; [1975] HCA 26 .... 4.58 University of Western Australia v Gray (No 20) (2008) 246 ALR 603; 76 IPR 222; [2008] FCA 498 .... 2.40 Uranium Antitrust Litigation, Re 617 F 2d 1248 (1980) .... 12.35 US v Continental Can Co 378 US 441 (1964) .... 12.42

V Vacwell Engineering Co Ltd v BDH Chemicals [1971] 1 QB 88; [1969] 3 All ER 1681 .... 9.5C Vawdrey Australia Pty Ltd v Krueger Transport Equipment Pty Ltd [2009] FCAFC 156 .... 4.18C1 Victoria University of Technology v Wilson (2004) 60 IPR 392; [2004] VSC 33 .... 2.40C3

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Marketing and the Law Village Building Co Ltd v Canberra International Airport Pty Ltd (2004) 210 ALR 114; (2004) ATPR 42-019; [2004] FCAFC 240 .... 10.9 Virgin Enterprises Ltd v Virgin Star Pty Ltd (2005) 67 IPR 557; [2005] FCA 1846 .... 7.53 Visy Paper Pty Ltd v ACCC (2003) 201 ALR 414; [2003] HCA 59 .... 13.39, 17.4 Von Berg v Trade Practices Commission (now known as the ACCC) (1997) ATPR 41-545 .... 10.37

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W Walkabout Footwear Pty Ltd v Sunshine Aust Group Pty Ltd (1987) 9 IPR 558 .... 7.50 Wallace v Brodribb (1985) 58 ALR 737 .... 11.13 Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387; 76 ALR 513 .... 1.29 Warman International Ltd v Envirotech Australia Pty Ltd (1986) 67 ALR 253; 6 IPR 578; (1986) ATPR 40-714 .... 3.19, 4.18 Warner Bros Entertainment Inc v RDR Books 575 F Supp 2d 513 (2008) .... 4.42 Watteau v Fenwick [1893] 1 QB 346 .... 11.20 Welcome Real-Time SA v Catuity Inc (2001) 51 IPR 327; [2001] FCA 445 .... 2.8C1 Wessex Dairies Ltd v Smith [1935] 2 KB 80 .... 3.18 Weston v Hemmons (1876) 2 VLR (E) 121 .... 3.11 Wheatley’s Patent Application, Re (1984) 2 IPR 450 .... 2.23C1 Wholesale Telecom Corp v ITC Deltacom Comm’ns Inc 176 Fed Appx 76 (11th Cir 2006) .... 19.9 Wickham v Associated Pool Builders Pty Ltd (1988) ATPR 140-910 .... 6.42 Wilkinson v Katies Fashions (Aust) Pty Ltd (1986) 67 ALR 137; (1986) ATPR 40-721 .... 8.10C, 10.37, 10.61, 10.61C Willard King Organisation Pty Ltd v United Telecasters Sydney Ltd [1981] 2 NSWLR 547 .... 6.39 Williams v Nye (1890) 7 RPC 62 .... 2.21 — v Pisano [2015] NSWCA 177 .... 10.9 Wilson v Weiss Art Pty Ltd (1995) 31 IPR 423; (1995) AIPC 91-139 .... 4.36, 4.36C Windsurfing International Inc v Petit [1984] 2 NSWLR 196 .... 2.15, 2.16C1, 2.22 Wingate Marketing Pty Ltd v Levi Strauss & Co (1994) 121 ALR 191; 28 IPR 193; (1994) ATPR 41-303 .... 7.55C

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WN Sharpe v Solomon Bros [1915] 32 RPC 15 .... 7.21 Wolanski’s Registered Design, Re (1953) 88 CLR 278 .... 5.7 Wombles Ltd v Wombles Skips Ltd [1977] RPC 99 .... 4.11, 6.45 Woolcock Street Investments Pty Ltd v CDG Pty Ltd (2004) 205 ALR 522; [2004] HCA 16 .... 9.4 Woolly Bull Enterprises Pty Ltd v Reynolds [2001] FCA 261 .... 7.62 Woolworths Ltd v BP plc (No 2) (2006) 235 ALR 698; 70 IPR 25; [2006] FCAFC 132 .... 7.26 Workwear Industries Pty Ltd v Pacific Brands Workwear Group Pty Ltd (2013) 104 IPR 1; [2013] FCA 1042 .... 6.17 World of Technologies (Aust) Pty Ltd v Tempo (Aust) Pty Ltd (2007) 71 IPR 307; [2007] FCA 114 .... 5.12, 5.15C, 5.20 Wyong Shire Council v Shirt (1980) 146 CLR 40; 29 ALR 217 .... 9.5

Y Yanx Registered Trade Mark, Re; Ex parte Amalgamated Tobacco Corp; sub nom Menzala Cigarette Co Ltd (1951) 82 CLR 199; 1B IPR 504 .... 7.34C1, 8.14 Yardley of London (Australia) Pty Ltd v Chapman & Lester the Sales Promotion Agency Pty Ltd (1989) 17 IPR 345; (1990) ATPR 40-989 .... 6.39 Yau’s Entertainment Pty Ltd v Asia Television Ltd (2002) 54 IPR 1; [2002] FCA 338; [2002] FCAFC 78 .... 6.38C Yorke v Lucas (1985) 158 CLR 661; 61 ALR 307; [1985] HCA 65 .... 10.56C1 — v Ross Lucas Pty Ltd (1983) 46 ALR 319; 68 FLR 268; [1983] FCA 14 .... 10.18C Yorkshire Copper Works v Registrar of Trade Marks [1954] 1 All ER 570 .... 7.21, 7.21C2

Z Zaravinos v Dairy Farmers Co-operative Ltd & Pure-Pak Australia (1985) 59 ALR 603; (1985) ATPR 40-559 .... 9.30 Zeccola v Universal City Studios Inc (1982) 46 ALR 189 .... 4.42C1 Zippo Manufacturing Co v Zippo.com Inc USPQ 2d 1062 (1997) .... 19.50

Table of Statutes References are to paragraph numbers

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Commonwealth Acts Interpretation Act 1901 .... 1.20 s 15AA .... 1.20 Arbitration Act 1974 .... 1.42 Australian Consumer Law Ch 3 .... 11.8, 11.38 Ch 4 .... 11.8, 11.38 Pt 2-3 .... 18.22 Pt 3-1 .... 1.55, 8.2, 8.10, 10.33, 10.66 Pt 3-2 .... 1.55, 9.1, 9.13, 9.41, 9.48, 9.50, 9.54, 9.61 Pt 3-2 Div 1B .... 9.41 Pt 3-2 Div 2 .... 1.55, 11.38 Pt 3-3 .... 8.2, 8.6, 8.7, 9.55, 9.64, 9.70 Pt 3-4 .... 8.2, 8.5, 8.6, 8.8, 9.55, 9.71 Pt 3-5 .... 1.55, 8.2, 8.6, 9.1, 9.32, 9.48, 9.49, 9.50, 9.51, 9.52, 9.53C1, 9.53C2, 9.54, 9.55C, 9.56, 9.57, 9.58, 9.62 Pt 4-1 .... 10.33 Pt 4-2 Div 2 .... 11.38 Pt 4-3 .... 9.64 Pt 4-3 Div 1 .... 8.9 Pt 4-4 .... 8.9 Pt 5-2 .... 9.23, 9.45 Pt 5-3 .... 8.14 Pt 5-4 .... 1.55 s 2 .... 6.18, 9.14, 9.21, 9.41, 9.55, 10.9 s 3 .... 9.14, 9.32, 9.42, 10.7, 11.8 s 4 .... 9.17, 10.24, 10.24C, 10.35 s 4(1) .... 10.24

s 4(2) .... 10.24 s 7 .... 9.31, 9.50 s 9 .... 9.51 s 9(2) .... 8.5, 9.51 s 18 .... 2.1, 2.51, 4.42C2, 5.32, 5.32C, 7.53, 7.55C, 6.6C, 6.10C, 6.11C3, 6.17, 6.18–6.20, 6.22, 6.22C, 6.23–6.26, 6.27C1, 6.27C2, 6.27C3, 6.28, 6.30C, 6.31C, 6.32C, 6.33, 6.33C1, 6.34C, 6.37C, 6.38C, 6.40C, 6.43C1, 6.45C, 8.10, 8.10C, 8.13C, 8.14, 8.16, 8.16C, 8.26, 10.6–10.9, 10.11, 10.14, 10.15, 10.16C, 10.17, 10.18, 10.22C, 10.24, 10.24C, 10.25, 10.26C1, 10.27C1, 10.27C4, 10.27C5, 10.29C, 10.30C, 10.31, 10.33, 10.35, 10.36, 10.40C, 10.56, 10.56C1, 10.58, 10.67, 10.70, 10.80, 11.17–11.19, 11.21, 11.33C, 18.23, 18.24, 18.25C, 19.54C, 19.59, 19.64 s 19 .... 10.58 s 20 .... 11.23, 18.25 s 21 .... 11.23, 11.24C, 18.23, 18.25, 18.25C s 21(4)(a) .... 18.25 s 21(6) .... 11.23 s 22 .... 11.23, 18.24C2, 18.25 s 22(2) .... 11.23 s 23 .... 11.27 s 24(1) .... 11.29 s 24(4) .... 11.29 s 25 .... 11.29

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Marketing and the Law Australian Consumer Law – cont’d s 25(1) .... 11.26 s 27(1) .... 11.28 s 27(2) .... 11.28 s 29 .... 1.39, 6.18, 6.19, 8.10, 10.6, 10.7, 10.30C, 10.36, 10.51, 10.80, 11.17, 11.18, 11.33C, 11.44C, 18.24, 19.59 s 29(1)(a)–(n) .... 10.36, 10.67 s 29(1)(a) .... 8.10C, 8.13C, 8.14, 10.26C1, 10.27C4, 10.27C5, 10.33, 10.37, 10.61C s 29(1)(b) .... 10.33, 10.38 s 29(1)(c) .... 10.26C1, 10.33, 10.39, 10.70 s 29(1)(d) .... 10.33, 10.40, 10.40C s 29(1)(e) .... 10.33, 10.41 s 29(1)(f) .... 10.33, 10.42 s 29(1)(g) .... 6.43C1, 8.13, 10.16C, 10.24C, 10.26C1, 10.27C1, 10.27C5, 10.33, 10.40C, 10.43, 10.44 s 29(1)(h) .... 10.33, 10.40C, 10.44, 19.54C s 29(1)(i) .... 8.12, 8.12C, 10.33, 10.45, 10.45C1, 10.49C2 s 29(1)(j) .... 10.33, 10.46 s 29(1)(k) .... 8.14, 8.14C1, 8.16, 8.16C, 10.33, 10.47 s 29(1)(l) .... 10.27C1, 10.33, 10.48 s 29(1)(m) .... 10.31, 10.33, 10.49, 10.49C1, 10.49C2 s 29(1)(n) .... 10.33, 10.50 s 29(2) .... 10.41, 10.42 s 30 .... 10.33 s 31 .... 10.33 s 32 .... 11.10, 11.10C, 11.11 s 32(1) .... 10.66, 10.67, 11.11 s 32(2) .... 11.11 s 32(3) .... 11.11 s 32(4) .... 11.1 s 33 .... 8.10, 8.10C, 8.13, 8.16, 8.16C, 8.17, 10.16C, 10.26C1, 10.33, 10.51, 10.80 s 34 .... 8.10, 8.16, 10.6, 10.33, 10.52, 10.67, 10.80 s 35 .... 11.12, 11.15C1, 11.16 s 35(1) .... 10.66 s 36(1)–(3) .... 10.66 s 38 .... 10.58 s 39 .... 11.35 s 40 .... 10.66, 11.35 s 40(2) .... 11.35 s 40(4) .... 11.35 s 41 .... 11.35

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s 41(2)(b) .... 11.35 s 42 .... 11.35 s 43 .... 10.66, 11.35 ss 44–46 .... 11.34 s 44 .... 11.33C s 45 .... 18.23 s 46 .... 11.34 s 47 .... 8.12, 10.33, 10.53, 10.67, 18.23 s 47(1) .... 10.66 s 48 .... 10.33, 10.53, 10.54, 10.54C, 10.67, 18.23 s 49 .... 11.33, 11.33C s 50 .... 11.32 s 51 .... 9.15 s 52 .... 9.15 s 53 .... 9.15 ss 54–59 .... 9.16 s 54 .... 9.15, 9.17, 9.18C1, 9.61 s 54(1) .... 9.17 s 54(2) .... 9.35 s 54(4) .... 9.35 s 54(6) .... 9.35 s 54(7) .... 9.35 s 55 .... 9.15, 9.18, 9.18C1 s 56 .... 9.15, 9.19, 9.61 s 56(2) .... 9.19 s 56(3) .... 9.19 s 57 .... 9.15, 9.19, 9.20 s 58 .... 9.34, 9.61 s 58(2) .... 9.38 s 59 .... 9.21, 9.61 s 59(1) .... 9.21 s 59(2) .... 9.15, 9.21 s 60 .... 9.22C, 9.41 s 61 .... 9.44C s 61(1) .... 9.41 s 61(2) .... 9.41 s 62 .... 9.41 s 63 .... 9.41 s 64 .... 9.22, 9.22C, 9.43, 9.44C s 64A .... 9.22, 9.22C, 9.44 s 65 .... 9.41 s 69(2) .... 11.38 s 70 .... 11.38 s 73 .... 11.39 s 74 .... 11.39, 11.44C s 75 .... 11.32, 11.39, 11.44C s 75AZC(1)(i) .... 10.37 s 76 .... 11.39

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Table of Statutes s 78 .... 11.40 s 79 .... 11.40 s 80 .... 6.28, 18.24 s 82 .... 6.28, 11.41, 18.24 s 82(3) .... 11.42 s 83(1) .... 11.42 s 84 .... 11.42 s 85 .... 11.42 s 85(1) .... 10.61 s 87 .... 6.28, 18.24 s 87B .... 8.8C, 16.29 s 89 .... 11.43 s 96(1) .... 11.36 s 96(3) .... 11.36 s 97 .... 11.36 s 97(3) .... 11.36 s 98 .... 11.36 s 99 .... 11.36 s 101A .... 17.28 s 104 .... 8.7, 9.65 s 105 .... 8.7 s 109 .... 9.68 s 114 .... 9.68 s 118 .... 9.68 s 122 .... 9.69 s 123 .... 9.70 s 127 .... 9.69 s 127(3) .... 9.69 s 129 .... 9.67 s 131 .... 9.65 s 132 .... 9.65 s 134 .... 8.8, 9.71 s 135 .... 8.8, 9.71 s 136 .... 8.26 ss 138–150 .... 9.62 s 138 .... 9.53 s 139 .... 9.53, 9.54 s 139B .... 1.48 s 139B(1) .... 10.10 s 139B(2) .... 10.10 s 140 .... 9.53, 9.53C2, 9.54 s 141 .... 9.53, 9.53C2, 9.54 s 142 .... 9.55 s 143 .... 9.58 s 146 .... 9.54 s 147 .... 9.50 s 150 .... 9.57 s 151 .... 1.39, 6.19, 10.7, 10.36, 10.67, 11.17, 19.59

s 151(1)(a) .... 8.14, 10.33, 10.36 s 151(1)(b) .... 10.33, 10.38 s 151(1)(c) .... 10.33 s 151(1)(d) .... 10.33 s 151(1)(e) .... 10.33 s 151(1)(f) .... 10.33 s 151(1)(g) .... 10.33 s 151(1)(h) .... 10.33 s 151(1)(i) .... 10.33 s 151(1)(j) .... 10.33 s 151(1)(k) .... 8.14 s 151(1)(l) .... 10.33 s 151(1)(m) .... 10.33 s 151(1)(n) .... 10.33 s 151(5) .... 8.14 s 152 .... 10.33 s 153 .... 10.33 s 154 .... 11.10, 11.11 s 155 .... 10.33, 10.51, 10.52, 10.67 s 155(1)(a)–(n) .... 10.67 s 156 .... 10.33, 10.67 s 157 .... 11.12, 11.16, 11.17C s 157(4) .... 11.16 s 160 .... 10.58 s 161 .... 11.35 s 163 .... 11.35 s 165 .... 8.12, 10.53, 10.67 s 166 .... 10.33, 10.53, 10.54, 10.67 s 167 .... 11.33 s 168 .... 11.32 ss 188–191 .... 11.36 s 194(8) .... 8.9 s 195 .... 9.66 s 195(4) .... 8.9 s 199 .... 9.69 s 203 .... 9.72 s 203(9) .... 8.9 s 204(4) .... 8.9 s 207(1) .... 10.61 s 207(2) .... 10.61 s 208 .... 10.62 s 209 .... 10.60, 10.62C s 218 .... 10.63 s 219 .... 10.64 s 224 .... 10.56, 10.67, 10.69 s 224(2) .... 10.67 s 226 .... 10.59 s 236 .... 10.56, 11.20 s 237 .... 10.74

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Marketing and the Law Australian Consumer Law – cont’d s 243 .... 11.20 s 246 .... 10.69–10.71 s 247 .... 10.69 s 248 .... 10.73 s 255 .... 8.14, 8.15C, 8.16C s 255(1) .... 8.16 s 255(2) .... 8.15 s 260 .... 9.24 s 261 .... 9.27 s 262(2) .... 9.25 s 266 .... 9.28 s 268 .... 9.46 s 270 .... 9.47 ss 271–276 .... 9.61 s 271(1) .... 9.34 s 271(2) .... 9.38 s 271(3) .... 9.34, 9.36 s 271(4) .... 9.38 s 271(5) .... 9.34 s 271(6) .... 9.37, 9.40 s 272 .... 9.39 s 273 .... 9.39 s 274 .... 9.33, 9.37 s 276 .... 9.33, 9.37 s 276(1) .... 9.37 s 276A .... 9.33, 9.37 Australian Industries Preservation Act 1906 .... 1.36 Australian Securities and Investments Commission Act 2001 .... 10.7 Broadcasting Services Act 1992 .... 4.37, 10.79, 19.69 s 123 .... 10.79 Business Names Act 2011 .... 1.12 Business Names Registration Act 2011 .... 1.14, 7.70–7.72 Circuit Layouts Act 1989 .... 5.2, 5.21, 5.35 s 5 .... 5.35 s 11 .... 5.35 s 16 .... 5.35 s 16(2) .... 5.35 s 17 .... 5.35 s 19 .... 5.35 s 20 .... 5.35 s 21 .... 5.35 s 22 .... 5.35 Competition and Consumer Act 2010 .... 1.8, 1.12, 1.36, 1.55, 7.66, 9.1, 10.5, 11.8, 11.45, 12.1, 13.3, 14.26, 19.21

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Pt IIIA .... 12.16, 12.19, 12.20, 12.31–12.34, 14.21, 14.30, 14.31, 14.33–14.36, 14.39, 14.44 Pt IIIAA .... 11.47 Pt IV .... 1.13, 1.43, 2.42, 2.43, 12.17, 12.18, 12.20, 12.22–12.24, 12.26–12.28, 12.34, 12.35, 12.56, 12.58, 13.8, 14.15, 14.33, 15.2, 15.20, 15.21, 16.31, 17.17, 18.26 Pt IV Div 1 .... 1.55, 12.17, 13.5, 13.6, 13.7, 13.43C2, 13.57, 13.64, 13.65, 13.67, 13.69, 13.76, 16.31 Pt IV Div 1A .... 13.68 Pt IV Div 2 .... 12.17, 13.5–13.7, 13.57, 13.64, 13.65, 13.69, 16.31 Pt IVA .... 12.35 Pt IVB Div 2A .... 18.22 Pt V .... 12.35 Pt VI .... 12.16 Pt VII .... 12.16, 12.28 Pt VIII .... 12.21, 16.1 Pt X .... 12.16 Pt XI .... 11.8 Pt XIA .... 12.34 Pt XIB .... 12.16, 12.20 Pt XIC .... 12.16, 12.20 s 2 .... 12.6, 14.36 s 2B .... 14.21C s 4 .... 12.38, 16.9 s 4(4)(b) .... 15.7 s 4A .... 15.21 s 4A(1) .... 14.13 s 4A(1)(b) .... 15.21 s 4A(5) .... 14.13 s 4D .... 13.44, 13.49C s 4E .... 15.8 s 4F .... 12.36, 13.22, 13.47, 16.20, 16.20C s 4F(1)(b) .... 14.16 s 4G .... 12.36, 13.48, 14.18, 15.8, 17.22 s 4J(b) .... 13.62 s 5 .... 12.35, 15.19 s 5(1) .... 12.35, 15.20 s 5(3) .... 12.35 s 5(4) .... 12.35 s 5(5) .... 12.35 s 30 .... 15.12 s 44AA .... 14.36 s 44B .... 14.36 s 44CA(1) .... 14.36 s 44D(1) .... 14.36 s 44D(2) .... 14.36

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Table of Statutes s 44F(1) .... 14.43 s 44F(1)(a)–(d) .... 14.36 s 44G .... 14.36 s 44H(4) .... 14.36, 14.37 s 44H(4)(b) .... 14.37C s 44K .... 14.40 s 44K(2) .... 14.37 s 44M .... 14.42 s 44V .... 14.39 s 44W .... 14.39 s 44X .... 14.39 s 44ZZ(1) .... 14.41 s 44ZZ(2) .... 14.41 s 44ZZA .... 14.43 s 44ZZA(3) .... 14.43 s 44ZZAA .... 14.43 s 44ZZCA .... 14.39 ss 44ZZRA–44ZZZB .... 12.17 s 44ZZRD .... 13.34C ss 44ZZS–44ZZZB .... 13.68 ss 44ZZW–44ZZX .... 12.17 ss 45–50 .... 12.22 s 45 .... 1.55, 12.17, 13.5, 13.7, 13.16, 13.18, 13.35C, 13.39C1, 13.44, 13.45, 13.54C, 13.56, 13.57, 13.65–13.67, 13.69, 13.76, 14.6, 14.15, 14.20C, 16.18C s 45(1) .... 13.44, 13.47, 13.48, 13.54, 13.65 s 45(1)(c) .... 13.9 s 45(2) .... 13.17, 13.39C2, 17.4, 17.26C, 17.30, 17.31 s 45(2)(a)(i) .... 13.39C2, 13.44 s 45(2)(a)(ii) .... 17.4 s 45(2)(b)(i) .... 13.39C2, 13.44 s 45(2)(b)(ii) .... 13.39C2 s 45(3) .... 13.56 s 45(5) .... 13.65 s 45(6) .... 13.65, 17.4 s 45(7) .... 13.65 s 45(8) .... 13.65 s 45(8A) .... 13.65 s 45(9) .... 13.45 s 45AB .... 13.40 s 45AD .... 12.17, 13.22, 13.23, 13.23C4, 13.30, 13.35C s 45AD(2) .... 13.19, 13.43C3 s 45AD(3)(a) .... 13.32, 13.35C, 13.39C1 s 45AD(3)(b) .... 13.36, 13.39C1 s 45AD(3)(c) .... 13.40, 13.43C3 s 45AD(4) .... 13.21, 13.34, 13.38, 13.42

s 45AD(6) .... 13.19 s 45AF .... 12.17, 13.17 s 45AF(3) .... 13.17 s 45AG .... 12.17, 13.17, 13.23C1, 13.24C s 45AG(3) .... 13.17 s 45AJ .... 12.17, 13.17 s 45AK .... 13.17, 13.39C1 ss 45AL–45AV .... 13.58 s 45AO .... 13.31, 13.62 s 45AP .... 13.31, 13.62 s 45AU .... 13.31, 13.63 s 45B .... 12.17 ss 45D–45EB .... 12.17 s 46 .... 1.55, 12.15, 12.17, 12.18, 12.22, 12.28, 13.39C2, 13.54C, 13.56C, 14.1–14.7, 14.9, 14.9C1, 14.9C2, 14.10, 14.15, 14.16, 14.18–14.21, 14.21C, 14.22, 14.23C, 14.24, 14.25, 14.26C, 14.27–14.29, 14.33, 14.44, 14.45, 16.11, 16.18C, 16.31, 17.4, 17.11, 17.11C2, 17.26C, 17.27, 17.30 s 46(1) .... 1.9, 14.2, 14.7, 14.8, 14.10, 14.12– 14.16, 14.19, 14.22, 14.23, 14.26, 14.45 s 46(1)(a) .... 14.11C s 46(1)(c) .... 14.24C, 17.11C1, 17.11C2 s 46(1AAA) .... 14.29C s 46(3) .... 14.13 s 46(4) .... 14.10 s 46(5) .... 14.10 s 46(7) .... 14.12 s 46(8)(a) .... 14.8 s 46A .... 12.17, 14.2, 14.29 s 46A(1) .... 14.29 s 46A(2)(a) .... 14.29 s 46A(2)(b) .... 14.29 s 46A(2)(c) .... 14.29 s 47 .... 1.55, 12.17 12.22, 12.28, 13.45, 13.54, 13.64, 14.15, 16.32, 17.1, 17.4, 17.9, 17.11, 17.11C1, 17.11C2, 17.12–17.15, 17.15C2, 17.23, 17.24C, 17.25C, 17.26C, 17.28, 17.28C, 17.30, 17.31, 18.26 s 47(1) .... 17.1 s 47(2)–(7) .... 17.1, 17.21 s 47(2)–(9) .... 17.1 s 47(2) .... 17.1, 17.5, 17.11C2, 17.29C s 47(2)(f)(i) .... 17.13 s 47(2)(f)(ii) .... 17.13 s 47(3) .... 17.1, 17.5 s 47(3)(a) .... 17.24C s 47(3)(d) .... 17.24C

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Marketing and the Law Competition and Consumer Act 2010 – cont’d s 47(4) .... 17.1, 17.16–17.18 s 47(5) .... 17.1, 17.16 s 47(6) .... 17.1, 17.15, 17.15C1 s 47(7) .... 17.1, 17.15 s 47(8) .... 17.1, 17.21, 17.29C s 47(8)(c) .... 17.15C2 s 47(9) .... 17.1, 17.21 s 47(10) .... 17.1, 17.7, 17.11C2, 17.18 s 47(11) .... 17.21 s 47(12) .... 17.1 s 47(13) .... 17.6, 17.12, 17.15, 17.17 s 48 .... 1.55, 12.17, 12.18, 12.29, 13.45, 13.64, 16.1, 16.7, 16.10–16.12, 16.14C, 16.15, 16.15C1, 16.15C2, 16.17C, 16.18, 16.18C, 16.19, 16.20, 16.20C1, 16.22C, 16.23, 16.23C2, 16.24, 16.27, 16.28, 16.28C1, 16.28C2, 16.31–16.33, 17.13, 17.31, 18.26 s 49 .... 12.17, 13.56 s 50 .... 12.17, 12.35, 12.36, 12.44C, 13.45, 13.64, 14.15, 15.1, 15.3, 15.6, 15.7, 15.8, 15.8C1, 15.8C2, 15.12–15.14, 15.16, 15.20–15.22 s 50(3) .... 15.22 s 50A .... 15.19, 15.21, 15.22 s 50A(1B) .... 12.17, 15.21 s 50A(6) .... 15.21 s 50A(8) .... 15.21 s 51 .... 12.18 s 51(3) .... 12.18 s 51ACA(1) .... 18.10 s 51ACA(2) .... 18.10 s 51ACB .... 8.21, 18.10, 18.18C, 18.22 s 51AE(1) .... 18.10 s 76 .... 13.9, 14.27, 15.16, 15.22, 16.28 s 76(1) .... 12.24 s 76(1)(a) .... 14.27 s 76(1A) .... 12.23, 13.17, 15.22 s 76(1A)(b) .... 14.27 s 76(1B) .... 12.24, 13.17, 15.22 s 76(1B)(b) .... 14.27 s 76C .... 13.66 s 77A .... 12.24 s 79 .... 12.21 s 79(1) .... 13.17 s 80 .... 12.26, 15.22, 16.28 s 81 .... 15.22 s 82 .... 12.26, 14.27, 15.22 s 84 .... 1.48, 16.28

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s 84(1) .... 14.16 s 86C(2) .... 12.27 s 86E .... 12.24 s 87 .... 12.26, 12.35, 14.27 s 87B .... 1.47, 12.27, 15.13, 15.15, 15.22, 18.22 s 87B(4) .... 12.27 s 88 .... 14.28, 15.14, 17.1, 17.29 s 88(1) .... 16.25 s 88(2) .... 14.28, 15.14 s 88(3) .... 14.28, 15.14 s 88(4) .... 15.14 s 88(6) .... 15.14 s 89(3) .... 15.14 s 89(4) .... 15.14 s 90 .... 12.28, 17.1 s 90(1) .... 15.14 s 90(4) .... 15.14 s 90(5A) .... 13.69 s 90(5B) .... 13.69 s 90(6)–(8) .... 13.69 s 90(6) .... 13.69, 16.28 s 90(7) .... 14.28, 15.12, 15.14 s 90(7)(a) .... 12.57 s 90(7)(b) .... 12.57, 15.14, 16.25 s 90(8) .... 12.57 s 90(9A) .... 15.14 s 90(10B) .... 15.14 s 91 .... 12.57 s 91(1) .... 15.14 s 91(1A) .... 15.14 s 91B .... 12.62, 15.16 s 91B(3) .... 15.16 s 92 .... 15.16 s 92(1) .... 15.16 s 92(2) .... 15.16 s 93 .... 17.1, 17.28 s 93(1) .... 12.28, 16.26 s 93(3) .... 17.28 s 93(4) .... 17.28 s 93AB .... 13.60 s 93AB(1A) .... 13.60 s 93AC .... 13.60 s 93AAA(1) .... 16.26 ss 96–100 .... 16.1 s 96(3) .... 16.13 s 96(3)(a) .... 16.14, 16.15C1 s 96(3)(b) .... 16.15, 16.17C, 16.21C s 96(3)(c) .... 16.15C1, 16.16 s 96(3)(d) .... 16.17C, 16.18, 16.21C, 16.22

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Table of Statutes s 96(3)(d)(i) .... 16.18 s 96(3)(d)(ii) .... 16.18, 16.21C s 96(3)(e) .... 16.18 s 96(3)(f) .... 16.9, 16.11, 16.17, 16.17C s 96(4) .... 16.10 s 96(7) .... 16.23 s 96A .... 16.24 s 97 .... 16.15 s 97(a) .... 16.15 s 97(b) .... 16.15 s 98 .... 16.19, 16.21C s 98(1)(b) .... 16.21C s 98(2) .... 16.22 s 98(3) .... 16.22 s 99 .... 16.27 s 100 .... 16.18, 16.21 s 100(2) .... 16.21 s 101(1) .... 15.17 s 101(1AA) .... 15.17 s 101(2) .... 15.17 s 102(1) .... 15.17 s 109(2) .... 15.17 s 130 .... 11.20 s 134C .... 10.66 s 139A .... 9.22 s 139B .... 11.20 s 139B(1) .... 11.20 s 151AA .... 12.20 s 151AK .... 12.20 s 152AA .... 12.20 s 155 .... 12.31, 15.13 s 163A .... 12.26 Sch 2 .... 1.13, 1.35, 2.51, 4.11, 5.32, 6.1, 8.2, 8.26, 10.3, 10.5, 11.8, 18.23, 19.21 Competition and Consumer Amendment (Competition Policy Review) Act 2017 .... 1.36, 13.9, 14.28, 15.14, 17.15 Competition and Consumer Amendment (Misuse of Market Power) Act 2017 .... 1.36, 14.2, 14.7 Competition and Consumer (Industry Code — Electricity Retail) Regulations 2019 .... 18.11 Competition and Consumer (Industry Code — Horticulture) Regulations 2017 .... 18.11 Competition and Consumer (Industry Code — Oil) Regulations 2017 .... 18.11 Competition and Consumer (Industry Code — Sugar) Regulations 2017 .... 18.11

Competition and Consumer (Industry Codes — Food and Grocery) Regulation 2015 .... 18.10 Competition and Consumer (Industry Codes — Franchising) Regulation 2014 Sch 1 .... 18.11 Competition and Consumer (Industry Codes — Port Terminal Access (Bulk Wheat)) Regulations 2014 .... 18.11 Competition and Consumer Regulations 2010 reg 9(a) .... 16.26 Copyright Act 1905 .... 1.7 Copyright Act 1968 .... 1.7, 1.12, 1.55, 4.2, 5.9, 6.42, 7.58, 8.2, 10.30, 17.26C Pt III .... 4.13, 4.14 Pt IV .... 4.21, 4.57 Pt IVA Div 4 .... 4.36 Pt V Div 2AA .... 4.64 Pt V Div 2A Subdiv A .... 4.74 Pt V Div 2A Subdiv B .... 4.74 Pt V Div V .... 4.72 Pt IX .... 4.25 s 10 .... 4.7, 4.10, 4.15, 4.19, 4.47, 4.67, 5.16 ss 10AA–10AC .... 4.67 s 10AD .... 4.67 s 14 .... 4.38 s 21(3) .... 4.18, 4.44 s 22(3)(a) .... 4.37 s 22(4)(a) .... 4.37 s 22(5) .... 4.34 s 29(1)(a) .... 4.37 s 29A(1) .... 4.37 s 29A(2) .... 4.37 s 31 .... 4.23 s 32 .... 4.3, 4.4 s 32(4) .... 4.4 s 33(2) .... 4.37 s 33(3) .... 4.37 s 35 .... 4.33 s 35(2) .... 4.28 s 35(3) .... 4.28 s 35(4) .... 4.30 s 35(5) .... 4.31 s 35(6) .... 4.29 s 36 .... 4.38, 4.57, 4.59–4.61 s 36(1A) .... 4.57 s 36(1A)(c) .... 4.59C ss 37–38 .... 4.67 s 37 .... 4.65, 4.65C, 4.66C s 38 .... 4.65

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Copyright © 2019. LexisNexis Butterworths. All rights reserved.

Marketing and the Law Copyright Act 1968 – cont’d ss 40–42 .... 4.50 s 44A .... 4.66 s 44C .... 4.67 s 44D .... 4.66 s 44E .... 4.66 s 44F .... 4.66 ss 47AB–47H .... 4.51 s 47C .... 4.52 s 47J .... 4.52 ss 54–64 .... 4.36 s 65 .... 4.16 s 66 .... 4.19 ss 74–77A .... 4.53, 4.56C s 75 .... 4.54 s 77 .... 4.18C2, 4.55, 4.56C s 77(1A) .... 4.56 s 77(2) .... 4.20C1 s 77(2)(a) .... 4.55 s 80 .... 4.37 s 85 .... 4.24, 4.48 s 86 .... 4.24, 4.48 s 87 .... 4.24, 4.48 s 88 .... 4.24, 4.48 s 93(2) .... 4.37 s 94(3) .... 4.37 s 95 .... 4.37 s 96 .... 4.37 s 97(3) .... 4.34 s 98(3) .... 4.34 s 99 .... 4.34 s 100 .... 4.34 s 100AE .... 4.34 ss 101–103 .... 4.67 s 101 .... 4.48, 4.57 s 101(1A) .... 4.57 s 102 .... 4.64 ss 103A–103C .... 4.50 s 111 .... 4.52 s 112C .... 4.67 s 112D .... 4.66 s 112E .... 4.63 s 115 .... 4.69 s 115(2) .... 3.18 s 115(3) .... 4.69 s 115(4) .... 4.69 s 115A .... 4.71 s 116 .... 4.69, 4.70 ss 116AA–116AJ .... 4.64

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s 116AH(1) .... 4.64 s 123AJ(1) .... 7.59C s 135(7) .... 4.72 s 190 .... 4.25 s 191 .... 4.25 ss 193–195AB .... 4.25 ss 195ABA–195ABE .... 4.25 ss 195AC–195AH .... 4.25 ss 195AHA–195AHC .... 4.25 ss 195AI–195AN .... 4.25 ss 195ALA–195ALB .... 4.25 s 195AR(2)–(3) .... 4.27 s 195AS(2)–(3) .... 4.27 ss 195AW–195AWA .... 4.25 s 195AXD(2) .... 4.27 s 195AXE(2) .... 4.27 s 195AXJ .... 4.25 s 202 .... 4.73 Copyright Amendment (Online Infringement) Act 2018 .... 4.71 Copyright Amendment (Service Providers) Act 2018 .... 4.64 Copyright (International Protection) Regulations 1969 .... 4.4 reg 4 .... 4.75 Copyright Regulations 2017 .... 4.55 reg 12(1) .... 4.55 reg 12(1)(a) .... 5.16 Corporations Act 2001 .... 3.18, 3.20 s 117 .... 7.74 s 144 .... 7.74 s 147 .... 7.74 s 182 .... 3.18 s 183 .... 3.18, 3.20 Corporations Regulations 2001 .... 7.74 Crimes Act 1914 s 4AA .... 10.66, 18.22 Crimes Amendment (Penalty Unit) Act 2017 .... 18.22 Defamation Act 2005 s 7(1) .... 19.57 Designs Act 2003 (Cth) .... 1.12, 1.55, 4.5, 5.1, 5.24, 7.58 s 5 .... 5.5 s 6(1) .... 5.6 s 6(2) .... 5.6 s 6(3) .... 5.6 s 6(4) .... 5.6 s 7(1) .... 5.5

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Table of Statutes s 7(2) .... 5.5, 5.9 s 7(3) .... 5.5, 5.8 s 8 .... 5.5 s 10 .... 5.18 s 10(2) .... 5.18 s 10(3) .... 5.18 s 13 .... 5.15C, 5.20 s 13(1)(b) .... 5.20 s 13(1)(c) .... 5.20 s 15 .... 5.10, 5.15C, 5.16 s 15(2) .... 5.13 s 16 .... 5.15C s 16(1) .... 5.11, 5.12 s 17 .... 5.16 s 17(1)(a) .... 5.16 s 17(1)(b) .... 5.16 s 18 .... 5.16 s 18(2) .... 5.16 s 19 .... 5.12, 5.24 s 19(1) .... 5.12, 5.24 s 19(4) .... 5.12 s 27(1)(b) .... 5.17 s 39 .... 5.21 s 43 .... 5.21, 5.22 s 43(1)(c) .... 5.21 s 65 .... 5.22 s 65(2) .... 5.22 s 66 .... 5.22 s 67 .... 5.22 s 68 .... 5.22 s 71(1) .... 5.23 s 71(1)(a) .... 5.23 s 71(1)(b)–(e) .... 5.23 s 71(3) .... 5.24 s 71(4) .... 5.23 s 72 .... 5.25 s 72(1) .... 5.25 s 72(2) .... 5.25 s 75 .... 3.18, 5.26 s 75(2)(a) .... 5.26 s 75(2)(b) .... 5.26 s 77 .... 5.27 s 90 .... 5.26 s 93 .... 5.26 s 132 .... 5.28 Designs Regulations 2004 reg 2.01 .... 5.16 reg 3.06(2) .... 5.17 reg 4.04 .... 5.21

reg 4.04(1)(e) .... 5.21 Do Not Call Register Act 2006 .... 19.17, 19.18, 19.38 Pt 4 .... 19.21 s 5 .... 19.18 s 5B .... 19.18 s 11 .... 19.19 s 11(1) .... 11.39, 19.18 s 11(2) .... 19.18 s 12 .... 19.21 s 12C .... 19.21 Sch 1 .... 19.17 Sch 1A .... 19.17 Sch 2 .... 19.17 Sch 3 .... 19.21 Electronic Transactions Act 1999 .... 19.5, 19.49 s 3 .... 19.5 s 4 .... 19.5 s 14 .... 19.49 Fair Work (Registered Organisations) Act 2009 .... 19.29 Federal Court of Australia Act 1976 Pt IVA .... 10.74 Flags Act 1953 .... 7.33 Food Standards Australia New Zealand Act 1991 .... 8.24 Gene Technology Act 2000 .... 2.10 Geneva Conventions Act 1957 .... 7.33 Industrial Chemical At 2019 .... 8.27 Intellectual Property Laws Amendment (Raising the Bar) Act 2012 .... 2.20 Sch 6 item 29 .... 2.23 Interactive Gambling Act 2001 .... 11.7 Major Sporting Events (Indicia and Images) Protection Act 2014 .... 7.33, 10.30 Melbourne 2006 Commonwealth Games (Indicia and Images) Protection Act 2005 .... 10.30 Mutual Recognition Act 1992 .... 8.29 Sch 2 .... 8.29 National Energy Retail Law .... 11.47 National Energy Retail Regulations .... 11.47 National Energy Retail Rules .... 11.47 National Measurement Act 1960 .... 8.18 National Trade Measurement Regulations 2009 .... 8.17 s 18JHA .... 8.20 Olympic Insignia Protection Act 1987 .... 7.33, 10.30 s 30 .... 10.31 s 36 .... 10.30C

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Copyright © 2019. LexisNexis Butterworths. All rights reserved.

Marketing and the Law Patents Act 1990 .... 1.12, 1.55, 2.10, 3.2, 4.5, 5.3, 7.58 s 7 .... 2.20 s 7(1)(b) .... 2.15 s 7(2) .... 2.19 s 7(3) .... 2.19 s 7(4) .... 2.32 s 7A .... 2.22 s 9 .... 2.23, 2.51C s 14 .... 2.42 s 15 .... 2.36 s 18 .... 2.10C s 18(1) .... 2.6 s 18(1)(b) .... 2.13 s 18(1)(c) .... 2.22 s 18(1)(d) .... 2.23C2 s 18(1A) .... 2.6, 2.31 s 18(1A)(b)(ii) .... 2.31 s 18(2) .... 2.10 s 20 .... 2.60 s 24 .... 2.17 s 40(1) .... 2.24 s 40(2) .... 2.24, 2.60 s 40(3) .... 2.24, 2.27, 2.60 s 59 .... 2.26 s 67 .... 2.29 ss 70–79A .... 2.2 s 101 .... 2.60 s 117 .... 2.51, 2.51C2 s 117(1) .... 2.51C1 s 117(2)(c) .... 2.51C1 ss 118–119C .... 2.49 s 119 .... 2.17, 2.52 s 120(1A) .... 2.33 s 122(1) .... 2.54, 2.55, 3.18 s 122(1A) .... 2.54 s 123(1) .... 2.54 s 128 .... 2.59 s 131 .... 2.59 s 133 .... 2.44 s 133(2)(a) .... 2.44 s 133(2)(b) .... 2.44 s 135 .... 2.44 s 138 .... 2.60 s 138(4) .... 2.60 Sch 1 .... 2.41, 2.46 Patents Regulations 1991 .... 2.17 regs 2.2–2.2D .... 2.17 reg 5.4(1) .... 2.26

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Personal Property Securities Act 2009 .... 2.42 Plant Breeder’s Rights Act 1994 .... 2.10, 2.69 Privacy Act 1998 .... 11.46, 19.28, 19.29, 19.45 s 6 .... 19.30 s 13G .... 19.45 s 40(1A) .... 19.45 s 40(2) .... 19.45 Sch 1 .... 19.28 Privacy Amendment (Enhancing Privacy Protection) Act 2012 .... 19.28 Privacy Regulations 2013 .... 19.28 Prohibition of Human Cloning Act 2002 .... 2.10 s 20 .... 2.10 Resale Royalty Right for Visual Artists Act 2009 ss 8–10 .... 4.23 Restrictive Trade Practices Act 1971 .... 1.36 Spam Act 2003 .... 19.10, 19.11, 19.15, 19.38 s 6 .... 19.13 s 14 .... 19.15 s 16 .... 19.15C s 18 .... 19.13 s 24 .... 19.15 s 28 .... 19.15 s 29 .... 19.15 s 32 .... 19.15 Sydney 2000 Games (Indicia and Images) Protection Act 1996 .... 10.30 Telecommunications Act 1997 (Cth) .... 4.71, 19.10, 19.60 s 40 .... 19.21 s 125A(1) .... 11.39 s 125B(1) .... 19.18 s 128 .... 19.18, 19.25 s 129 .... 19.21 s 572B .... 19.21 Telecommunications (Do Not Call Register) (Telemarketing and Research Calls) Industry Standard 2007 s 4 .... 19.22 s 7 .... 19.25 Therapeutic Goods Act 1989 .... 8.27 Tobacco Plain Packaging Act 2011 .... 7.33 s 28(2) .... 7.33 Trade Marks Act 1905 .... 7.2 Trade Marks Act 1995 .... 1.12, 1.55, 5.4, 6.1, 6.42, 7.2, 7.5, 7.41, 10.30 Pt 4 .... 7.65 Pt 4 Div 2 .... 7.10 Pt 13 .... 7.54

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Table of Statutes Pt 14 .... 7.55, 7.59 Pt 16 .... 7.66 Pt 17 .... 7.65 s 6 .... 7.6 s 7(2) .... 7.46 s 7(4) .... 7.46 s 7(5) .... 7.46 s 10 .... 7.37, 7.48 s 14 .... 7.38 s 17 .... 7.6 s 19(2) .... 7.9 s 20(1) .... 7.43 s 20(2) .... 7.43 s 21 .... 7.43 s 24 .... 7.61 s 27 .... 7.9 s 27(1) .... 7.7 s 29 .... 7.42 s 39 .... 7.30 s 40 .... 7.31 s 41(1) .... 7.11 s 41(3) .... 7.25–7.28 s 41(4) .... 7.22, 7.24 s 41(4) note 1 .... 7.12, 7.21 s 41(5) .... 7.24 s 41(6) .... 7.26 s 42(a) .... 7.32 s 42(b) .... 4.44, 7.32, 7.33 s 43 .... 7.33, 7.34 s 44 .... 7.35 s 51A .... 7.9 s 57 .... 7.42 s 58 .... 7.42 s 58A .... 7.42 s 59 .... 7.42 s 60 .... 7.42, 7.42C5 s 61 .... 7.21, 7.42 s 61(1)(d) .... 7.21 s 62 .... 7.42 s 62A .... 7.42, 7.42C5 s 65C .... 8.7C s 69(1)(c) .... 7.43 s 70 .... 7.43 s 72 .... 7.42 s 72(3) .... 7.44 s 74 .... 7.41 ss 75–77 .... 7.44 s 84A .... 7.60 s 84A(6) .... 7.60

s 84D .... 7.60 s 87 .... 7.61 s 88(2)(b)–(e) .... 7.64 s 92 .... 7.62 s 93 .... 7.62 s 102 .... 7.43 s 120(1) .... 7.5, 7.45, 7.46, 19.66 s 120(2) .... 2.2, 7.45, 7.49 s 120(3) .... 7.45, 7.53 s 120(3)(d) .... 7.53 s 120(4) .... 7.53 s 122(1)(a) .... 7.27, 7.28, 7.56 s 122(1)(b) .... 7.28, 7.56, 19.55C s 122(1)(c) .... 7.56 s 122(1)(d) .... 7.56 s 122(1)(e) .... 7.56 s 122(1)(f) .... 7.56 s 122(1)(fa) .... 7.56 s 122(1)(g) .... 7.56 s 122(2) .... 7.41, 7.56 s 122A .... 7.54 s 124 .... 7.56 s 126(1) .... 7.57 s 126(2) .... 7.57 s 129(1) .... 7.58 s 129(2A) .... 7.58 s 130A .... 7.58 s 145 .... 7.59 s 146 .... 7.59 s 147 .... 7.59 s 147A .... 7.59 s 147B .... 7.59 s 148 .... 7.59 s 148(1) .... 7.59C s 150 .... 7.59 s 151 .... 7.59, 7.68 s 169 .... 7.66 s 225 .... 7.42 Trade Marks Regulations 1995 .... 7.7 reg 4.3(7) .... 7.31 reg 4.3(8) .... 7.31 reg 4.15 .... 7.30, 7.63 Sch 1 .... 7.8, 7.9 Trade Practices Act 1965 .... 1.36 Trade Practices Act 1974 .... 1.13, 1.36, 6.18, 7.53, 9.13, 10.4, 11.8, 17.11C1 Pt V .... 6.17, 11.8 Pt V Div 1A .... 9.64 Pt VA .... 9.51, 9.52, 9.53C1, 9.53C2, 9.55C

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Copyright © 2019. LexisNexis Butterworths. All rights reserved.

Marketing and the Law Trade Practices Act 1974 – cont’d s 45 .... 13.23C1 s 50 .... 15.8C1 s 51A .... 10.24C s 51AC .... 18.24C2 s 52 .... 4.42C2, 6.6C, 6.10C, 6.11C3, 6.17–6.19, 6.22C, 6.27C1, 6.27C2, 6.27C3, 6.30C, 6.31C, 6.32C, 6.33, 6.34C, 6.36C, 6.37C, 6.38C, 6.40C, 6.43C1, 6.45C, 7.55C, 10.6, 10.16C, 10.22C, 10.24C, 10.26C1, 10.27C1, 10.27C4, 10.29C, 10.56C1, 10.70, 11.18, 18.24C2, 19.54C, 19.64 s 53 .... 6.18, 6.34C, 10.6 s 53(a) .... 10.26C1, 10.27C4, 10.59C, 10.61C s 53(b) .... 10.26C1 s 53(c) .... 6.43C1, 10.16C, 10.24C, 10.26C1, 10.27C1, 10.70 s 53(d) .... 19.54C s 53(e) .... 10.45C1, 10.49C2 s 53(eb) .... 8.14C1 s 53(f) .... 10.27C1 s 53(g) .... 10.49C2 s 55 .... 10.6, 10.16C s 55A .... 10.6 s 65C .... 8.8C s 68 .... 9.22C, 9.44C s 74 .... 9.22C, 9.43C, 9.44C s 75AD .... 9.55C s 75AF .... 9.53C2 s 75AG .... 9.53C2 s 85(3) .... 10.62 Trade Practices (Consumer Product Information Standards) (Cosmetics) Regulations 1991 .... 8.27 Trade Practices (Consumer Product Safety Standards) (Children’s Nightwear and Paper Patterns for Children’s Nightwear) Regulations 2007 .... 8.7C Trade Practices (Consumer Product Safety Standards) Regulations 1979 reg 11 .... 8.8C Trade Practices (Industry — Unit Pricing) Regulations 2009 .... 8.21 Trade Practices Regulations 1979 .... 8.8C Trans-Tasman Mutual Recognition Act 1997 .... 8.29 Treasury Laws Amendment (2018 Measures No 3) Act 2018 .... 1.43

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Treasury Laws Amendment (2018 Measures No 5) Act 2019 .... 12.18 Treasury Legislation Amendment (Small Business and Unfair Contract Terms) Act 2015 .... 11.31 US Free Trade Agreement Implementation Act 2004 .... 4.37, 4.75 War Precautions Repeal Act 1920 .... 7.33 Wine Australia Corporation Act 1980 .... 6.8C

Australian Capital Territory Business Names Act 1963 .... 7.70 Civil Law (Wrongs) Act 2002 .... 9.3 Dangerous Substances Act 2004 .... 8.28 Fair Trading (Consumer Affairs) Act 1973 Pt 4 .... 9.64 Legislation Act 2001 .... 1.20 s 139 .... 1.20 Lotteries Act 1964 .... 11.3 s 6 .... 11.5 s 7 .... 11.5 Medicines, Poisons and Therapeutic Goods Act 2008 .... 8.27 Mutual Recognition (Australian Capital Territory) Act 1992 .... 8.29 Sale of Goods Act 1954 .... 9.2 Unlawful Gambling Act 2009 .... 11.3

New South Wales Arbitration Act 2010 .... 1.42 Business Names Act 2002 .... 7.70 Civil Liability Act 2002 .... 9.3 s 5B .... 9.5 Competition Policy Reform (New South Wales) Act 1995 .... 12.34 Contracts Review Act 1980 .... 3.39 Dangerous Goods (Road and Rail Transport) Act 2008 .... 8.28 Explosives Act 2003 .... 8.28 Fair Trading Act 1987 .... 9.64 Pt 3 .... 9.64 Pt 3 Div 2 .... 10.5 Pt 4 Div 1 .... 9.64 Interpretation Act 1987 .... 1.20 s 33 .... 1.20 Lotteries and Art Unions Act 1901 .... 11.3, 11.7 s 3 .... 11.7 s 4B .... 11.5 Lotteries and Art Unions Regulation 2007 .... 11.7

Table of Statutes Mutual Recognition (New South Wales) Act 1992 .... 8.29 Poisons and Therapeutic Goods Act 1966 .... 8.27 Restraints of Trade Act 1976 s 4(1) .... 3.36 Sale of Goods Act 1923 .... 9.2 Work Health and Safety Act 2011 Sch 1 .... 8.28

Northern Territory Business Names Act 2007 .... 7.70 Consumer Affairs and Fair Trading Act 1990 Pt IV Div 14 .... 9.64 Dangerous Goods Act 2012 .... 8.28 Gaming Control Act 2005 .... 11.3 s 39 .... 11.5 Gaming Control (Community Gaming) Regulations 2011 reg 8 .... 11.5 Interpretation Act 1978 .... 1.20 s 62A .... 1.20 Medicines, Poisons and Therapeutic Goods Act 2012 .... 8.27 Mutual Recognition (Northern Territory) Act 1992 .... 8.29 Sale of Goods Act 1972 .... 9.2 Transport of Dangerous Goods by Road and Rail (National Uniform Legislation) Act 2010 .... 8.28

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Queensland Acts Interpretation Act 1954 .... 1.20 s 14A .... 1.20 Amendment of Major Sports Facilities Act 2001 .... 10.30 Arbitration Act 2013 .... 1.42 Business Names Act 1962 .... 7.70 Charitable and Non-Profit Gaming Act 1999 .... 11.3, 11.5 Sch 5 .... 11.7 Civil Liability Act 2003 .... 9.3 Explosives Act 1999 .... 8.28 Fair Trading Act 1989 Pt 4 Div 12 .... 9.64 Health Act 1937 .... 8.27 Lotteries Act 1997 .... 11.3 Major Sports Facilities Act 2001 .... 10.30 s 30G(2) .... 10.30

Mutual Recognition (Queensland) Act 1992 .... 8.29 Non-Profit Gaming Act 1999 .... 11.3, 11.7 Non-Profit Gaming Regulations 1999 .... 11.7 Non-Profit Gaming Rules 1999 .... 11.7 Sale of Goods Act 1898 .... 9.2 Transport Infrastructure Act 1994 .... 8.28 Transport Operations (Road Use Management) Act 1995 .... 8.28

South Australia Acts Interpretation Act 1915 .... 1.20 s 22 .... 1.20 Arbitration Act 2011 .... 1.42 Beverage Containers Act 1975 .... 8.29 Business Names Act 1996 .... 7.70 Civil Liability Act 1936 .... 9.3 Controlled Substances Act 1984 .... 8.27 Dangerous Substances Act 1979 .... 8.28 Explosives Act 1936 .... 8.28 Lottery and Gaming Act 1936 .... 11.3 Lottery and Gaming Regulations 2008 reg 17 .... 11.5 Mutual Recognition (South Australia) Act 1993 .... 8.29 Sale of Goods Act 1895 .... 9.2 Trade Standards Act 1979 .... 9.64

Tasmania Acts Interpretation Act 1931 .... 1.20 Arbitration Act 2011 .... 1.42 Business Names Act 1962 .... 7.70 Civil Liability Act 2002 .... 9.3 Dangerous Goods (Road and Rail Transport) Act 2010 .... 8.28 Explosives Act 2012 .... 8.28 Gaming Control Act 1993 .... 11.3 s 4A .... 11.5–11.7 Mutual Recognition (Tasmania) Act 1993 .... 8.29 Poisons Act 1971 .... 8.27 Sale of Goods Act 1896 .... 9.2 Sale of Hazardous Goods Act 1977 .... 9.64 Therapeutic Goods Act 2001 .... 8.27

Victoria Arbitration Act 2011 .... 1.42 Australian Grands Prix Act 1994 .... 10.30

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Marketing and the Law Business Names Act 1962 .... 7.70 Commonwealth Games Arrangements Act 2001 .... 10.30 Dangerous Goods Act 1985 .... 8.28 Drugs, Poisons and Controlled Substances Act 1981 .... 8.27 Fair Trading Act 1999 .... 11.26 Pt 3 .... 9.64 Food Act 1984 .... 8.23 Gambling Regulation Act 2003 .... 11.3 s 5.7.1 .... 11.5 s 5.7.2 .... 11.5 Gambling Regulation Amendment Regulations 2012 .... 11.7 Gambling Regulations 2005 .... 11.7 Interpretation of Legislation Act 1984 .... 1.20 s 35 .... 1.20 Major Events (Aerial Advertising) Act 2007 .... 10.30 Major Sporting Events Act 2009 .... 10.30 Mutual Recognition (Victoria) Act 1999.... 8.29 Therapeutic Goods (Victoria) Act 1994 .... 8.27 World Swimming Championships Act 2004 .... 10.30 Wrongs Act 1958 .... 9.3

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Western Australia Arbitration Act 2012 .... 1.42 Business Names Act 1962 .... 7.70 Consumer Affairs Act 1971 .... 9.64 Dangerous Goods Safety Act 2004 .... 8.28 Gaming and Wagering Commission Act 1987 .... 11.3 s 102 .... 11.7 s 102(b) .... 11.5 s 104 .... 11.5 s 104(1) .... 11.7 Gaming and Wagering Commission Regulations 1988 .... 11.7 Interpretation Act 1984 .... 1.20 s 18 .... 1.20 Major Events (Aerial Advertising) Act 2009 .... 10.30 Medicines and Poisons Act 2014 .... 8.27 Mutual Recognition (Western Australia) Act 2001 .... 8.29 Poisons Act 1964 .... 8.27 Sale of Goods Act 1895 .... 9.2

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International Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) .... 2.10, 2.63, 5.34 art 27(3)(a) .... 2.10 Australia New Zealand Closer Economic Relations Trade Agreement [1983] ATS 2 .... 14.29 Berne Convention for the Protection of Literary and Artistic Works .... 4.2, 4.67, 4.75 EC Treaty (Treaty Establishing the European Committee) 2004 art 82 .... 12.11 European Patent Convention .... 2.65 General Agreement on Trade in Services (GATS) .... 5.34 Locarno Agreement Establishing an International Classification for Industrial Designs 1968 .... 5.21 Madrid Protocol relating to the Madrid Agreement Concerning the International Registration of Marks 1989 .... 7.67 Marrakesh Agreement .... 5.34 Paris Convention for the Protection of Industrial Property 1970 .... 2.28, 2.62, 5.34 Patent Cooperation Treaty .... 2.64 Rome Convention .... 4.4 Universal Copyright Convention .... 4.2, 4.4

United Kingdom Commonwealth of Australia Constitution Act 1900 .... 1.5, 1.6 s 51 .... 1.7 s 90 .... 1.7 s 109 .... 1.7 s 114 .... 1.7 s 115 .... 1.7 s 119 .... 1.7 s 128 .... 1.8 Merchandise Marks Act 1862 .... 7.2 Patents Act 1977 .... 2.10 Sale of Goods Act 1893 .... 9.2 Statute of Monopolies 1623 .... 2.7 s 6 .... 2.7 Trade Marks Registration Act 1875 .... 7.2

United States Anticybersquatting Consumer Protection Act, 15 USC [1125] (1999) …. 19.61

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Introduction to the Law and Marketing

1

Marketing — The Legal Environment ............................................ 1.1 The Function of Marketing ............................................................. 1.2 The Law and the Marketing Mix .................................................... 1.3 Law and the Australian Legal System ............................................. 1.4 What is law? .................................................................................... 1.4 Parliamentary law ........................................................................... 1.5 A. A short history of government in Australia ...................... 1.6 B. Federalism — sharing power between parliaments ......... 1.7 C. Changing the division of power between parliaments .... 1.8 D. Referring to and finding parliamentary law ...................... 1.9 E. The structure of parliaments in Australia ...................... 1.10 F. The process of creating parliamentary law ........................ 1.11 G. Parliamentary law and marketing ................................... 1.12 i. Competition and Consumer Act (formerly the Trade Practices Act) ........................................................ 1.13 ii. Business names registration ........................................... 1.14 H. Administering the law — the doctrine of the separation of powers ............................................................ 1.15 I. Interpreting a statute — the role of the courts ................ 1.16 i. Literal rule ........................................................................ 1.17 ii. Golden rule ............................................................................ 1.18 iii. Mischief rule ......................................................................... 1.19 iv. Use of extrinsic materials in interpreting statutes ....... 1.20 v. Rebuttable presumptions ...................................................... 1.21 vi. Other interpretive devices .......................................... 1.22

1

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Marketing and the Law

Case law (common law) .............................................................. A. Distinction between common law systems and civil law systems ............................................................... B. Doctrine of precedent (stare decisis) .............................. i. Hierarchy of courts in Australian states ...................... ii. Hierarchy of federal courts in Australia ...................... iii. Courts in other jurisdictions ........................................ C. Finding case law ................................................................ D. Law reporting and the internet ........................................ E. Common law and equity .................................................. F. The process of extracting the law from a case ............... The primacy of parliamentary law over case law ...................... A. The law of negligence ....................................................... B. Consumer protection law ................................................. C. Competition law ...................................................................... An age of regulation ...................................................................... Private law and public law ............................................................... Civil cases and criminal cases .................................................... Dispute resolution ...................................................................... A. Resolving disputes through the courts ........................... B. Alternative dispute resolution ......................................... The Law and Compliance ............................................................... What is a legal compliance program? ....................................... Reasons to adopt a legal compliance program ........................ A. Benefits of compliance programs ..................................... B. Avoiding the costs of breaching the law ......................... C. Compliance program as part of the ACCC’s enforcement activities ............................................................. Designing an effective compliance program ........................... The Law and Competitive Advantage .......................................... Product ......................................................................................... Price ....................................................................................................... Promotion ....................................................................................... Place ............................................................................................ The competitive process ........................................................... Summary and Objectives of this Text ..........................................

2

1.23 1.24 1.25 1.26 1.27 1.28 1.29 1.30 1.31 1.32 1.33 1.34 1.35 1.36 1.37 1.38 1.39 1.40 1.41 1.42 1.43 1.44 1.45 1.45 1.46 1.47 1.48 1.49 1.50 1.51 1.52 1.53 1.54 1.55

Chapter 1: Introduction to the Law and Marketing

Marketing — The Legal Environment

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Business people must be diligent to understand the legal system’s relationship to their marketing decisions. Federal, state and local regulations affect marketing practices, as do the actions of independent regulatory agencies. These requirements and prohibitions touch on all aspects of marketing decision making: designing, labelling, packaging, distributing, advertising, and promoting goods and services. All marketers should be aware of the major regulations that affect their activities.1

1.1 This text concentrates on the legal environment in which marketing decisions are made in Australia. ‘Marketing law’ is merely a shorthand way of referring to those legal rules, remedies, and sanctions that are likely to have the greatest impact on marketing decisions. These decisions are not made in a vacuum. No reasonable marketing executive should regard the law as irrelevant to the decisionmaking process. The law is more than just a matter for the lawyers. It is a matter for business people to assimilate, place in perspective, and comply with. Any firm that does not have an effective legal compliance system in place nowadays runs an enormous risk, as will be amplified below. The legal regulations discussed in this text do not form a discrete body of law. The rules have different origins and different reasons for existing. Some come from the common law (judge-made law), but the majority are created by statute (parliamentary law). Some are federal laws, while others are initiated by the states and territories. Some are designed to protect consumers, some are designed to protect traders, and some are designed to protect the competitive system itself. Some attract criminal sanctions, while others have a non-criminal application only. The connecting factor between these laws is their relevance to marketers. One role the law performs is drawing the boundary between what the community regards as fair and unfair behaviour. When put into a marketing context, the law defines the difference between acceptable competitive conduct and unacceptable competitive conduct. Competitive conduct may be unacceptable because it adversely affects the consumer (such as misleading advertising or manufacturing unsafe products), a competitor (such as misleading advertising, unauthorised use of a competitor’s trade name, trade secrets, copyright, or patent rights), or the competitive process itself (such as price fixing and market rigging, abuses of market power, and anti-competitive conduct and arrangements generally).

The Function of Marketing 1.2 Put at its simplest, the role of marketing is to identify the wants or needs of customers and to determine how best to satisfy these. Making the right marketing 1

L E Boone and D L Kurtz, Contemporary Marketing, 18th ed, Cengage, Boston, 2019, p 46.

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Marketing and the Law

decisions should ensure that an organisation achieves its objectives, although the conduct of other activities, such as production, engineering, and finance, will also be critical in this regard. The marketing concept thus places the customer at the centre of an organisation’s activities. The organisation itself is concerned with satisfying the customer’s needs, usually at a profit. Satisfying the needs of the customer involves several elements: getting the right product; determining the correct price; creating customer awareness through promotion and advertising; and ensuring that the product is physically available in terms of time and place. These elements make up the marketing mix. The major elements of the marketing mix are usually described as the ‘four Ps’: • product; • price; • promotion; and • place. Choosing the right mix of these four interrelated ingredients is a critical part of the marketing function. It is usually regarded as a choice that is within the control of the marketer. However, the marketer must be careful not to ignore factors outside the marketing mix, factors that can impact greatly upon any or all of the elements of the marketing mix.

The Law and the Marketing Mix

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1.3 The importance of factors external to the marketing mix has long been recognised by expert marketing personnel:2 The extent to which the notion of the four P’s encapsulates the key areas of marketing action has disguised many of the problems of mix management that have emerged in practice. It is easy to become pre-occupied with the challenges of making decisions on individual parts of the mix or creating blends which fit the internal requirements of the enterprise. Successful mix management is not built on this ... [There is a] common failure to appreciate the importance of placing mix decisions in their competitive and environmental context. The elements are designed to: 1. Create a combination meeting customer needs. 2. Achieve competitive advantage. 3. Satisfy legal requirements.

Stanton, Miller, and Layton go so far as to say:3 Legislation at all levels exercises more influence on the marketing activities of an organisation than on any other phase of its operations. 2 3

4

T Cannon, Basic Marketing: Principles and Practices, Cassell, London, 1992, p 281. W J Stanton, K E Miller and R A Layton, Fundamentals of Marketing, 4th ed, McGraw-Hill, Sydney, 2000, p 54.

Chapter 1: Introduction to the Law and Marketing FIGURE 1.1 THE MARKETING MANAGER’S FRAMEWORK4

MARKETING ENVIRONMENT VARIABLES LEGAL ENVIRONMENT MARKETING STRATEGY VARIABLES

POLITICAL ENVIRONMENT PRODUCT

CULTURAL & SOCIAL ENVIRONMENT PLACE

CUSTOMER PRICE

PROMOTION MARKETING MIX

ECONOMIC & TECHNOLOGIC ENVIRONMENT

RESOURCES & OBJECTIVES OF ORGANISATION

COMPETITIVE ENVIRONMENT

The variables outside the marketing mix are often regarded as ‘uncontrollable’. To a large extent this is true, in the sense that factors such as legal rules and obligations are imposed by external forces. Nevertheless, these ‘uncontrollable’ factors can and must be managed by business organisations. A knowledge of the legal environment must begin with an understanding of the nature of law and the Australian legal system.

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Law and the Australian Legal System What is law? 1.4 Humans, being social creatures, require rules to make society function properly. Rules are the sine qua non of social order, whether the society is complex or primitive. If you stop and consider it, rules are everywhere — social rules, family rules, religious rules, club rules, sporting rules. While these rules may impose moral obligations on those who live under them and undoubtedly influence how people behave and interact, they do not necessarily form part of the law. To be regarded as law, a rule must be enforceable by the state.

4

P G Quester, R L McGuiggan, E J McCarthy and W D Perreault, Basic Marketing: A Managerial Perspective, 5th Aust ed, McGraw-Hill, Sydney, 2006, p 52.

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Marketing and the Law

Therefore, for present purposes, it is sufficient to say that the law is any rule which a court of law will enforce. Here the state is represented by the courts of law. These legal rules change from society to society and across time. For example, there was a time in most European states when the law mandated a person’s religious practices. In modern secular Europe, such a law would be regarded with horror. If the key to any rule being law is whether it is enforceable by the state, the obvious question is how the state (the courts) recognises what rules to enforce. The answer lies in the history of the proposed rule. Where did it come from? How was it created? The courts apply or reject a suggested rule on the basis of its source. There are two sources which have the capacity to provide legally enforceable rules, namely parliament and the courts. FIGURE 1.2 SOURCES OF LAW

Sources of law

Parliament (legislation or statute law)

The courts (case or judge-made law)

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Parliamentary law 1.5 The historical development of parliament and parliamentary law in England and Australia is beyond the scope of an introductory guide such as this. Suffice to say, the various Australian colonies adopted a parliamentary system based on the English system of responsible government (that is, government is responsible to an elected parliament). This system was also adopted by the Commonwealth of Australia Constitution Act 1900 (UK) (referred to in this chapter as the Constitution), which set up the Commonwealth of Australia, including the Commonwealth parliament. At this stage, it may be useful to have some idea of the history of governance in Australia.

A. A short history of government in Australia 1.6 In 1788, the British sent a fleet of ships to colonise the area around what is now Sydney. The colony was called New South Wales. The country was largely

6

Chapter 1: Introduction to the Law and Marketing

treated as if it was uninhabited (terra nullius) and, consequently, the law of Great Britain became the law of New South Wales. Over the next 50 years, colonies were also established in Tasmania, Queensland, Victoria, South Australia, and Western Australia. Each colony was administered ultimately from London and the law in each colony was British law. FIGURE 1.3 MAP OF AUSTRALIA

Australia Darwin

NORTHERN TERRITORY QUEENSLAND WESTERN AUSTRALIA SOUTH AUSTRALIA Perth

Adelaide

Brisbane NEW SOUTH WALES

Sydney Canberra VICTORIA Melbourne

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TASMANIA Hobart

In the 1850s, the various colonies formed their own parliaments. However, these parliaments were still subject to Britain and their powers were restricted. The executive (the government) was still appointed by the British government. Between 1850 and 1890, the colonies became more powerful economically, more complex politically, and more sophisticated socially. This led to the granting of more local powers in the form of responsible government (that is, the executive was directly responsible to parliament). At the same time, there was a strong move from within the colonies to unite, which made a lot of sense: the colonists were almost exclusively from Britain and therefore spoke the same language and enjoyed the same culture; the laws were almost the same in each colony; and the systems of government were the same. In 1899, the colonies agreed to form a single nation under a federal system of government. This was approved by the British Parliament in 1900, when it passed the Constitution. Each colony became a state with its own parliament which decided state law. Each colony handed over certain powers to a central parliament called the Commonwealth or Federal Parliament. These powers were either given exclusively to the Commonwealth or were shared with the Commonwealth.

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Marketing and the Law

The Commonwealth parliament is now located in Canberra, which is Australia’s capital city. The following extract is the preamble of the Constitution, which commenced on 9 July 1900. COMMONWEALTH OF AUSTRALIA CONSTITUTION ACT (63 & 64 VICTORIA, CHAPTER 12)

[9th July 1900]

An Act to constitute the Commonwealth of Australia Whereas the people of New South Wales, Victoria, South Australia, Queensland, and Tasmania, humbly relying on the blessing of Almighty God, have agreed to unite in one indissoluble Federal Commonwealth under the Crown of the United Kingdom of Great Britain and Ireland, and under the Constitution hereby established:

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And whereas it is expedient to provide for the admission into the Commonwealth of other Australasian Colonies and possessions of the Queen: Be it therefore enacted by the Queen’s most Excellent Majesty, by and with the advice and consent of the Lords Spiritual and Temporal, and Commons, in this present Parliament assembled, and by the authority of the same, as follows: 1. This Act may be cited as the Commonwealth of Australia Constitution Act. 2. The provisions of this Act referring to the Queen shall extend to Her Majesty’s heirs and successors in the sovereignty of the United Kingdom. 3. It shall be lawful for the Queen, with the advice of the Privy Council, to declare by proclamation that, on and after a day therein appointed, not being later than one year after the passing of this Act, the people of New South Wales, Victoria, South Australia, Queensland, and Tasmania, and also, if her Majesty is satisfied that the people of Western Australia have agreed thereto, of Western Australia, shall be united in a Federal Commonwealth under the name of the Commonwealth of Australia. But the Queen may, at any time after the proclamation, appoint a Governor-General for the Commonwealth.

Short title Act to extend to the Queen’s successors Proclamation of Commonwealth

B. Federalism — sharing power between parliaments 1.7 In Australia, legislative power (ie, the power to make binding laws) is divided between the Commonwealth parliament and the various state parliaments. Neither the Commonwealth parliament nor the various state parliaments have

8

Chapter 1: Introduction to the Law and Marketing

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unfettered power. The relationship between the Commonwealth and the various states of Australia is governed by the provisions of the Constitution.5 The relationship is called ‘federalism’. This means that the states retain all those powers that have not been specifically handed over to the Commonwealth parliament. To put the matter another way, the Commonwealth parliament may only make laws with respect to: • those matters set out in the Constitution, primarily s 51 of the Constitution; or • matters which are necessarily incidental to the matters set out in the Constitution; or • those matters which have been referred to the Commonwealth by the states. If the Commonwealth parliament attempts to pass a law that is beyond its power, such a law is unconstitutional and of no effect. Certain areas of power are reserved to the Commonwealth parliament exclusively and any law passed by a state parliament that impinges on that exclusive power is unconstitutional and of no effect. For example, the Commonwealth parliament has the exclusive rights to levy custom duties under s 90 of the Constitution. Other powers given exclusively to the Commonwealth include, for instance, the power to mint coins (s 115) and to regulate defence (ss 114 and 119). Powers not granted to the Commonwealth by the Constitution are called the residual powers and are vested in the states. Where a power is granted to the Commonwealth but not exclusively, that power is shared between the Commonwealth and the states. These are called concurrent powers. Section 51 of the Constitution sets out the concurrent powers of the Commonwealth. These powers range over a broad spectrum of activities, but by no means cover all possible activities. The Commonwealth and the states may each make laws with respect to matters covered by these concurrent powers. If there is an inconsistency between a federal law and a state law, the federal law shall prevail to the extent of that inconsistency: Constitution s 109. When does an inconsistency exist? Broadly speaking, there are three approaches to determining the existence of an inconsistency within the meaning of s 109: 1. The ‘simultaneous obedience’ test: Is it impossible to obey both laws? If it is not possible, there is an inconsistency. 2. The ‘conferred rights’ test: Does one law confer a right which the other purports to take away? If yes, then there is an inconsistency. 3. The ‘cover the field’ test: Does the federal law cover the field in question? If the federal law (properly interpreted) is intended to cover a particular field of activity, then any state law purporting to cover the same field will be inconsistent with the federal law. The ‘cover the field’ test means that, in certain 5

The Australian Constitution can be viewed on the Parliament of Australia website at . See also the Parliamentary Education Office (PEO) website which has a range of helpful resources on Australia’s parliamentary democracy. See, for example, ‘Australian Constitution’, at .

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Marketing and the Law

areas, the Commonwealth exercises de facto exclusive power in a practical (if not legal) sense. For example, once the Commonwealth enacted the Copyright Act 1905 (now the Copyright Act 1968), there was no scope for the states to produce their own copyright legislation. Any attempt to do so would probably fail under s 109 of the Constitution. TABLE 1.1 THE DIVISION OF POWERS BETWEEN THE COMMONWEALTH AND THE STATES EXCLUSIVE LEGISLATIVE POWERS OF THE COMMONWEALTH

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Making laws with respect to: • printing money; • levying custom and excise duties; • defence and external relations; and • removal or amendment of any existing Commonwealth law. The Commonwealth effectively has exclusive power (as a result of the exercise of its concurrent powers coupled with the operation of s 109 of the Constitution) to make laws with respect to: • copyright, patents, and designs; • communications; • bankruptcy and insolvency; and • immigration.

CONCURRENT LEGISLATIVE POWERS Making laws with respect to: • taxation, other than customs and excise duties; • marriage and divorce; • trade and commerce; and • the powers set out in s 51 of the Constitution.

RESIDUAL POWERS (EXCLUSIVE LEGISLATIVE POWERS OF THE STATES) Making laws with respect to: • state police, schools, and hospitals; • state roads and public transport (within the state); • utilities (electricity, water supply); • housing; • prisons and community services; • shop trading hours; and • removal or amendment of any existing state law.

C. Changing the division of power between parliaments 1.8 Because of Australia’s federal system, there is a good deal of overlapping jurisdiction, which has resulted in numerous overlapping statutes. Business has been particularly critical of this aspect of Australian governance and indeed there is much to be said for streamlining business regulation. However, removing these examples of overlapping jurisdiction is not easy; ultimately it is a matter of politics. Historically it has proved very difficult to amend the Constitution, which requires a referendum in which a majority of people in a majority of states and a majority of people across the nation as a whole vote ‘yes’ (called a double majority): Constitution s 128. As a result, most examples of streamlining regulation 10

Chapter 1: Introduction to the Law and Marketing

have come through a compromise between the Commonwealth and the states. A good example of this is the consumer protection provisions of the Competition and Consumer Act 2010 (Cth).

D. Referring to and finding parliamentary law 1.9 A law passed by a parliament, federal or state, is called an Act of Parliament. During the course of this book, we will deal with a number of Acts. Acts are also called statutes, and the body of law that comes from parliament is called statutory law or legislation. Since the evolution of the internet, it has become far easier to access up to date statutes. The Commonwealth and most states and territories maintain very good websites devoted to providing information about legislative activity. Useful websites with links to online copies of legislation and other law-related matters are: • Commonwealth parliament: ; • The Federal Register of Legislation: ; and • Australasian Legal Information Institute: . If an Act of Parliament is used as the source of a law, it should be referenced correctly as shown below. FIGURE 1.4 HOW TO REFERENCE AN ACT OF PARLIAMENT

Competition and Consumer Act 2010 (Cth) s 46(1)

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name of the statute date the statute was passed by parliament or last consolidated

subsection number section number

name of parliament — this Act was passed by the Commonwealth parliament

E. The structure of parliaments in Australia 1.10 In Australia, parliaments are either unicameral (one house) or bicameral (two houses).

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Marketing and the Law

TABLE 1.2 THE STRUCTURE OF PARLIAMENTS IN THE COMMONWEALTH, THE STATES AND TERRITORIES LOWER HOUSE

UPPER HOUSE

Commonwealth parliament

House of Representatives

Senate

Parliaments in New South Wales, Victoria, South Australia, Western Australia, and Tasmania

Legislative Assembly

Legislative Council

Parliaments in Queensland, Australian Capital Territory, and the Northern Territory

Legislative Assembly

In all jurisdictions, the government is formed by the political party able to command a majority in the lower House — the House of Representatives in the case of the Commonwealth and the Legislative Assembly in the case of the states and territories.

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F. The process of creating parliamentary law 1.11 An Act of Parliament begins life as a Bill; that is, a draft of the proposed Act of Parliament. The Bill (normally drawn up by the office of the parliamentary counsel) is introduced to parliament and is generally accompanied by an explanatory memorandum, which briefly outlines the purpose and main provisions of the Bill. A Bill may be introduced by the government (Government Bill) or by a member of parliament (Private Members’ Bill). Bills may be introduced into either house of parliament, except for appropriation or money Bills (ie, Bills regarding government appropriation, expenditure, or taxation), which generally can only be initiated in the lower house (the House of Representatives in the case of the Commonwealth and the Legislative Assembly in the case of the states and territories). In practice, most Bills originate in the lower house and are Government Bills Bills go through a similar process in each of the bicameral parliaments. First, the Bill and the explanatory memorandum are introduced to parliament (the First Reading). The proposer or mover of the Bill (usually a minister in the government) explains the purpose and scope of the Bill and a date is fixed for discussion and debate. This is where the Bill is debated in full. Many Bills are referred to a parliamentary committee for further discussion. Following discussion, parliament votes on whether the Bill ‘be now read a second time’ (Second Reading). If this is agreed to, the House has agreed to the Bill in principle. The proposer then moves that the Bill be read a third time (Third Reading). Generally there is no debate at this point. The Bill is then sent to the other house for consideration, where the same process is followed.

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Chapter 1: Introduction to the Law and Marketing

Once agreed to by both houses, the Bill is sent for Royal Assent and is published in the Government Gazette. These are basically technical requirements that must be adhered to if the Bill is to become a valid law as an Act of Parliament. Amendments to an Act of Parliament must follow the same procedure.6

G. Parliamentary law and marketing 1.12 A number of parliamentary laws or statutes are important for marketing. Some are exclusively within Commonwealth power; for example, the Copyright Act 1968 (Cth), Patents Act 1990 (Cth), Trade Marks Act 1995 (Cth), and Designs Act 2003 (Cth). Some are a compromise between the Commonwealth and the states and territories; for example, the Competition and Consumer Act 2010 (Cth). Some remain wholly a state responsibility; for example, laws regulating games and competitions as part of a trade promotion. The history of the Competition and Consumer Act 2010 (Cth) and the Business Names Act 2011 (Cth) provide useful examples of how the Australian legislative system works.

i. Competition and Consumer Act (formerly the Trade Practices Act)

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1.13 In 1974, the Commonwealth parliament passed the Trade Practices Act 1974 (Cth), which has had a significant impact on how business is conducted in Australia. Some of the areas it critically affected included: • advertising and promotional activities; • the quality and safety of consumer products; • relationships between competitors; and • the pricing and distribution of goods. The Trade Practices Act highlighted some of the constitutional difficulties associated with enacting valid legislation. The Constitution does not give the Commonwealth parliament power to pass laws with respect to advertising, consumer protection, defective products, or competition. Therefore, parliament had to use a mix of powers to ensure the legislation was valid. The Commonwealth parliament has power to make laws with respect to trading, financial and foreign corporations, interstate and overseas trade, and postal, telegraphic, and telephonic services. All these powers were used to give the Trade Practices Act the widest possible application. However, the Trade Practices Act could not catch all commercial activity. For example, it could not catch false advertising by a sole trader unless the sole 6 See further ‘Infosheet 7 — Making laws’ on the Parliament of Australia website at . The Parliamentary Education Office also provides a range of helpful online resources about the law-making process of the Australian parliament (eg, ‘Making a law in the Australian Parliament’ at ) including a video which follows the path of a Bill from its introduction in the House of Representatives to its signing into law by the Governor-General: ‘Snapshots of Parliament: Passing a Bill’.

13

Marketing and the Law

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trader used the radio or television or the internet as its advertising medium. Nor could it interfere with contracts between a sole trader and a consumer. Therefore, regulating the activities of a sole trader was a matter for the states and the territories. Unfortunately state and territory laws were not always consistent. This meant that consumer protection in Australia became a complex and confusing jumble of federal and state laws.7 In 2009, the Council of Australian Governments (COAG) agreed to implement a single Australian Consumer Law. This required extensive amendments to the Trade Practices Act as well as to state laws. As part of the amendment process the Trade Practices Act was repealed and renamed the Competition and Consumer Act 2010 (Cth), which came into force on 1 January 2011. The Australian Consumer Law is set out in Sch 2 to the Competition and Consumer Act 2010 and is a single, national law, which applies in the same way nationally and in each state and territory. It is the principal consumer protection law in Australia.8 An Intergovernmental Agreement (IGA) signed by COAG underpins the establishment of the Australian Consumer Law.9 ‘As part of a commitment to continuous improvement of Australia’s consumer protection regime, in June 2015 consumer affairs ministers, through the Legislative and Governance Forum on Consumer Affairs (CAF), asked Consumer Affairs Australia and New Zealand (CAANZ) to initiate a broad-reaching review of the Australian Consumer Law’.10 The intent of the review was to assess the effectiveness of the Australian Consumer Law, including its flexibility to respond to new and emerging issues and the extent to which it had met the objectives set by COAG when it established the IGA in 2009.11 CAANZ published the Australian Consumer Law Review Final Report on 19 April 2017,12 which found that:13 … on the whole, the introduction of a generic consumer law has benefited consumers and traders and that the law itself is generally “fit for purpose”. In particular, the introduction of the Australian Consumer Law has helped empower consumers, lower the incidence of consumer problems and ease the regulatory burden on traders.

It was also noted that the success of the Australian Consumer Law ‘is attributable to more than the law itself. The joint efforts of Commonwealth, state and territory

7 8

9 10 11 12 13

14

Productivity Commission, Review of Australia’s Consumer Policy Framework (2008), see ‘Consumer Policy Framework’, May 2008, available at . General guidance about the Australian Consumer Law and its provisions can also be found on the Australian Consumer Law website and on the Australian Competition and Consumer Commission website . See ‘Intergovernmental Agreement for the Australian Consumer Law’ at . Australian Consumer Law Review Final Report, March 2017, at [1.1], available at . Australian Consumer Law Review Final Report, above n 10, at [1.1]. Australian Consumer Law Review Final Report, above n 10. Australian Consumer Law Review Final Report, above n 10, at [1.3].

Chapter 1: Introduction to the Law and Marketing

consumer affairs agencies in administering and enforcing the Australian Consumer Law have been central to its success’.14 However, while the introduction of the Australian Consumer Law is regarded as an important microeconomic reform, the Final Report also identified further areas for reform in pursuit of best practice consumer law and policy.15 For example, from 1 September 2018 legislative amendments came into force to align the maximum penalties available under the Australian Consumer Law with the maximum penalties for contravention of the competition provisions in the Competition and Consumer Act.16 The amendments gave effect to the recommendations in the Final Report that ‘the maximum financial penalties available for a breach or attempted breach of the Australian Consumer Law … are insufficient to deter highly profitable non-compliant conduct and can be seen by some entities as “a cost of doing business”.’17 The Australian Consumer Law is discussed in detail in Chapters 9–11.

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ii. Business names registration 1.14 Often people carry on a business under a name that is different to the names of the business owners. This practice can make it difficult for customers to know who to pursue if something goes wrong with a transaction. The solution for this has been to require business owners to register the business name, and for the public to be able to search that register to identify the names and contact details of business owners. For a long time, this function was carried out at a state and territory level, but with many businesses operating in more than one Australian state or territory, the existence of so many different business names registers caused difficulties for government, business, and customers. The obvious solution was to have a single national business names register for the whole of Australia. However, the Constitution does not give sufficient powers to the Commonwealth parliament to make laws regarding the registration of business names. The Commonwealth parliament has power to regulate some businesses (those operated by a corporation), but not sole traders or partnerships. In 2011–2012, the states and territories agreed to refer their powers to regulate business names and their registration to the Commonwealth. In 2011, the Commonwealth parliament enacted the Business Names Registration Act 2011 (Cth).

H. Administering the law — the doctrine of the separation of powers 1.15 While the various parliaments are the ultimate source of parliamentary law, they do not administer that law nor do they act as adjudicator. The administration 14 15 16 17

Australian Consumer Law Review Final Report, above n 10, at p v. Australian Consumer Law Review Final Report, above n 10, Table 1. The Treasury Laws Amendment (2018 Measures No 3) Act 2018. Australian Consumer Law Review Final Report, above n 10, at [3.2].

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is in the hands of the executive (the government) and the courts adjudicate. This is called the doctrine of the separation of powers.18 FIGURE 1.5 SEPARATION OF POWERS

SEPARATION OF POWERS Government is responsible to parliament

LEGISLATIVE POWER Parliament makes the law

EXECUTIVE POWER Government administers the law

JUDICIAL POWER Courts interpret the law

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Government usually controls the lower house of parliament

Although responsibility for administration is in the hands of the executive, the executive is directly responsible to parliament. The members of the executive — the government — are members of parliament who are accountable to parliament. This is called responsible government and should be contrasted with the United States system where the only elected member of the executive is the President, who is neither a member of parliament nor accountable to it. Parliament does not have the time to debate and pass every rule that may affect our lives. It delegates much of the rule making to other authorities. Thus, local councils have been given the power to pass rules affecting their local communities. However, the power of the local councils (and other statutory authorities) comes from parliament and may be withdrawn by parliament. The power must be exercised for the purposes of, and in the manner set out in, the Act of Parliament that created the power. The power may not be exceeded. If the statutory authority exceeds its power, or acts for an improper purpose or in an unauthorised manner, the courts have jurisdiction to declare such proceedings void.

I. Interpreting a statute — the role of the courts 1.16 While it is the role of parliament to create legislation, it is the role of the courts to interpret it. 18 See further ‘Separation of powers: Parliament, Executive and Judiciary’ at .

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Chapter 1: Introduction to the Law and Marketing

i. Literal rule 1.17 The fundamental object of the court when interpreting legislation is to ascertain and give effect to the legislative intention of the parliament. The intention of parliament is to be found first and foremost in the words that parliament has used; that is, the words of the statute. Words are to be given their ordinary and natural meaning. Thus, the courts will initially give a literal interpretation to the statute’s words. This is called the literal rule. In most cases this will be all that is needed to interpret a statute.

ii. Golden rule 1.18 Where there is some ambiguity and using the normal meaning of the statute’s words would produce an absurd result, the courts may adopt an interpretation that avoids the absurdity and gives effect to the intention of parliament. This is called the golden rule and is used sparingly.

iii. Mischief rule 1.19 Where there are two equally possible interpretations, the courts must accept the interpretation which promotes the purpose or object of the Act. This is an old rule, but may in fact be part of the golden rule.

iv. Use of extrinsic materials in interpreting statutes

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1.20 To aid interpretation, the courts may resort to a number of extrinsic aids, such as any explanatory memorandum tabled in the parliament concerning the statute.19 For Commonwealth legislation, s 15AA of the Acts Interpretation Act 1901 (Cth) applies: In the interpretation of a provision of an Act, a construction that would promote the purpose or object underlying the Act (whether that purpose or object is expressly stated in the Act or not) shall be preferred to a construction that would not promote that purpose or object.

For state legislation, an interpretation which promotes the purpose(s) of the legislation is also preferred to other possible interpretations.20

19 Acts Interpretation Act 1901 (Cth); Interpretation Act 1987 (NSW); Interpretation of Legislation Act 1984 (Vic); Acts Interpretation Act 1954 (Qld); Interpretation Act 1984 (WA); Acts Interpretation Act 1915 (SA); Acts Interpretation Act 1931 (Tas); Interpretation Act 1978 (NT); Legislation Act 2001 (ACT). 20 Interpretation Act 1987 (NSW) s 33; Interpretation of Legislation Act 1984 (Vic) s 35; Acts Interpretation Act 1954 (Qld) s 14A; Interpretation Act 1984 (WA) s 18; Acts Interpretation Act 1915 (SA) s 22; Acts Interpretation Act 1931 (Tas) s 8A; Interpretation Act 1978 (NT) s 62A; Legislation Act 2001 (ACT) s 139.

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v. Rebuttable presumptions 1.21 A number of presumptions may also be applied by courts in interpreting legislation. These presumptions are rebuttable by clear evidence that the parliament intended otherwise. Some of the more commonly applied presumptions are: • Legislation does not override the common law or alter existing legal rights. • Parliament does not intend to interfere with the liberty of citizens. • Parliament does not intend to interfere with fundamental rights. • Parliament does not intend to take away property rights without compensation. • Legislation is not intended to be retrospective. • Legislation is not intended to have extra-territorial application (ie, application beyond the geographical jurisdiction of the relevant parliament). • Legislation is not intended to bind the Crown (ie, the government).

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vi. Other interpretive devices 1.22 There are a number of interpretive devices used by the courts to understand a statute.21 These are simply canons of statutory interpretation and must be used very carefully. Ultimately it is the intention of parliament as revealed in the statute that counts. The canons may amount to no more than the application of common sense. • Ejusdem generis (of the same kind or nature): Where specific items are referred to in a statute followed by general words, the general words are limited to the same kind as the specific items. For example, a statute which states that it applies to ‘cars, motorbikes and other vehicles’ would apply also to a motor scooter, but probably not to a motor powered boat or an airplane. Boats and planes are not of the same kind or nature as cars and motorbikes. • Expressio unius est exclusio alterius: Where there is an express reference to one thing, other things are excluded. For example, a statute which states that ‘no trucks or buses may use this road’ would not apply to cars, motorbikes, or bicycles. However, care must be taken where the reference to one thing is simply meant as an illustration and not an exclusion of other things. For example, the expressio unius rule could not be applied to the following statutory provision: ‘No vehicles may use this road. This includes motorbikes’ to exclude cars, trucks, buses, and so forth. • Noscitur a sociis (it is known by its associates): The meaning of a word or phrase may be gathered from the context in which it appears. This maxim, if it has any practical application at all, may mean no more than that a statutory provision must be understood within its overall context. Where the meaning is clear, there is no room for the application of noscitur a sociis. It is rarely relied upon.

21 The meaning of these Latin expressions may be found in law dictionaries. See, for example, LexisNexis Concise Australian Legal Dictionary, 5th ed, LexisNexis, Sydney, 2014.

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• Generalia specialibus non derogant (the general cannot detract from the specific): Where there is a conflict between general and specific provisions (usually within the same Act), the specific provision prevails.

Case law (common law) 1.23 The other area from which we derive our law is the courts of law. Although parliament is supreme, it has chosen not to be the sole repository of law making. It has left intact much of what is called the common law (also called case law or judge-made law). This should be contrasted with many European countries which have felt the need to assert parliament’s role as the sole authority (civil law). The common law may be defined as those legally enforceable rules that have been fashioned and adapted by the courts throughout the ages. Judges do not make rules ad hoc. If they did, England would long ago have deserted the common law. Rather, the process is one of slow adaptation and development. It is often possible to trace the growth of a rule through centuries.

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A. Distinction between common law systems and civil law systems 1.24 The common law operates in countries that were influenced in their development by England. Most other countries operate under a civil law system; this includes European countries such as France, Germany, and Italy. Civil law, which owes much to Roman law, relies on statutory rules. These rules often appear in the form of a code such as the Napoleonic Code. Judges merely interpret and apply the statutes and codes; judges do not create law. This is the key difference between civil law and common law. Why did England develop a common law system, while other European countries did not? Two interrelated factors were of critical importance. First, from the time of the Norman Conquest in 1066, England developed a strong central government. This did not occur in other European countries until much later. France remained very much a collection of semi-autonomous regions until at least the time of Napoleon. Germany only became a unified state in 1875. The unification of Italy also occurred in the 1870s, but was not finally completed until after the First World War. Second, the early English monarchs created King’s courts which dispensed a common law throughout the realm. These courts quickly grew in popularity and, in time, largely replaced the host of feudal courts that had previously existed. No such centralised system of law enforcement occurred in France or was possible in Germany or Italy. Consequently, when the political upheavals arrived — the French revolution and the unification movements in Germany and Italy — the newly formed political entities had no common law or common legal system to call upon. A civil law system was the only choice. 19

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B. Doctrine of precedent (stare decisis) 1.25 The principle that unifies the common law and makes it workable is the doctrine of precedent, also known as stare decisis. This simply means that a decision of a higher court binds a lower court in the same hierarchy of courts. The doctrine of stare decisis, therefore, means that a decision of a higher court must be applied by lower courts in the same hierarchy if the case being heard involves the same issue and similar facts as those in the case previously decided by the higher court. Therefore, it is necessary to have some understanding of the various hierarchies within Australia.

i. Hierarchy of courts in Australian states 1.26 Each state has its own hierarchy of courts. FIGURE 1.6 THE HIERARCHY OF COURTS IN AUSTRALIAN STATES High Court Supreme Court of Appeal Supreme Court District Court or County Court Local or Magistrates Court & other courts and tribunals

Each state has a roughly similar hierarchy of courts and the High Court is the highest judicial body in each.

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ii. Hierarchy of federal courts in Australia 1.27 The Federal Court, created in 1976, has assumed a leading role in the area of commercial and taxation law generally, and marketing law in particular. The Federal Court has an original jurisdiction (trials) and an appellate jurisdiction. The Family Court was established in 1975. FIGURE 1.7 THE HIERARCHY OF FEDERAL COURTS IN AUSTRALIA High Court Federal Court of Australia Court of Appeal

Family Court of Australia Court of Appeal

Federal Court of Australia

Family Court of Australia

Federal Circuit Court of Australia (formerly the Federal Magistrates Court)

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iii. Courts in other jurisdictions 1.28 Even though a court is only bound to follow the decisions of a higher court within its own jurisdiction, the decisions of courts in other jurisdictions will have persuasive authority. Particularly important in this regard are the decisions of other Australian courts and the decisions of the superior courts in the English hierarchy. This is because the common law of Australia is derived from English common law. FIGURE 1.8 THE HIERARCHY OF COURTS IN ENGLAND Supreme Court of the United Kingdom Court of Appeal High Court of Justice (Queen’s Bench, Family and Chancery Divisions)

In some areas of law, US decisions are now attracting greater attention than they received in the past. For example, one of the areas of law discussed in this book is competition law. Competition law is very much a US invention which has been exported to many countries around the world — first to the developed economies of Europe, Canada, Australia, New Zealand, and Japan; and more recently to developing economies such as China, India, and Brazil. US decisions are not binding on Australian courts, but they often have persuasive force.

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C. Finding case law 1.29 The decisions of the courts are to be found in the various law reports. Not all cases are reported. The decisions of the County Court and the Magistrates’ Courts are not reported. In the superior courts, only those cases that are regarded as raising an interesting point of law are officially reported. Many more cases, however, are available to be read on the internet. Cases are referred to by their ‘citation’, which is a reference to the law report in which the case may be found. For example, the citation for the case Carlill v Carbolic Smoke Ball Co is [1893] 1 QB 256, showing that the report of the case can be found in volume 1 of the Queen’s Bench Reports of 1893 beginning at page 256; Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387, 76 ALR 513 can be found both in volume 164 of the Commonwealth Law Reports at page 387, and volume 76 of the Australian Law Reports beginning at page 513. Queensland Wire Industries v Broken Hill Pty Co Ltd was a decision of the High Court of Australia. The official citation appears in the box below. It has now become common to refer to cases by what is called a neutral citation: in this case, Queensland Wire Industries v Broken Hill Pty Co Ltd [1989] HCA 6. It is neutral because it does not refer to any specific law report, but rather to the court in which the decision was made. ‘HCA’ means the judgment came from the High Court of Australia. For the purpose of 21

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marketing law, the decisions of the Federal Court are very important. ‘FCA’ is used to designate a decision by a single judge (whether on trial or an interlocutory proceeding). ‘FCAFC’ is used to designate an appeal decision of the Full Court of the Federal Court. FIGURE 1.9 THE ELEMENTS OF A CASE CITATION

Queensland Wire Industries v Broken Hill Pty Co Ltd (1989) 167 CLR 177

appellant

respondent page number

year of law report

name of law report volume of report

D. Law reporting and the internet 1.30 Although the law reports remain the official source of what was said in a case, the internet is rapidly becoming a common medium for accessing cases. Australia has a number of websites devoted to law. A very useful site which reports most recent cases of consequence is the Australasian Legal Information Institute (Austlii) website.22 The Austlii website also contains copies of Commonwealth and state legislation, and has connections to useful sites around the world.

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E. Common law and equity 1.31 Case law (or judge-made law) is divided into two categories: one is called the common law; and the other equity. The expression ‘common law’ has a number of meanings, depending upon the context in which it is used. We have previously used it as a synonym for judge-made law, to distinguish it from statutory law. We are now using it to describe one of the categories of case or judge-made law, to distinguish it from equity. In this latter regard, the common law is that body of law that was applied historically by the common law courts. The common law courts only recognised certain complaints (called ‘causes of action’) and only granted certain remedies. If a person’s complaint did not fit within one of the recognised causes of action, the court would not hear the matter. The common law courts, by and large, restricted themselves to granting damages (monetary compensation) as a remedy. 22 .

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Chapter 1: Introduction to the Law and Marketing

The Court of Chancery (which developed in the 14th and 15th centuries out of the functions of the Lord Chancellor) stepped in and was prepared to provide relief in situations not recognised by the common law. The body of law applied by the Court of Chancery came to be called equity law. In time, equity became somewhat formalised, just as the common law had. Like the common law, equity adopted the practice of following previous decisions (precedents). This is probably necessary in a society that espouses the rule of law and eschews arbitrary proceedings.23 Equity developed around the common law, rather than as a discrete and competing set of principles in its own right. Equity recognised new relationships which the common law would not recognise. For example, the common law would not recognise the relationship between trustee and beneficiary. The law relating to trusts is therefore a matter of equity. Trusts have continued to grow in importance, particularly in commerce. Equity also recognised that some complaints, which had previously gone unrecognised by the common law (for example, equitable fraud), were worthy of a remedy. Finally, equity provided new remedies; for example, specific performance and injunctions. As a broad generalisation, we can say that, whereas the common law is concerned with rules, equity is concerned with behaviour. For many years, the common law courts and the equity courts were entirely separate. A person wishing to bring a complaint to court had to choose between the common law and equity. An incorrect decision could leave the complainant with no remedy. This situation was rectified in the 19th century when the administration of common law and equity was unified in 1873. A court is empowered to hear pleas based on either one or the other, or a combination. However, the two bodies of law remain otherwise separate. To give some idea of their relationship to one another, we will briefly consider contract law, which is one of the great areas of common law. The rules that govern contract law were created by the common law courts. The main remedy employed by the common law courts for breach of contract was, and is, damages (monetary compensation). Equity acted to soften some of the harder edges of the common law rules. For example, the only action for fraud recognised by the common law courts required evidence of a fraudulent state of mind.24 This meant that many plaintiffs, despite having been misled into a contract, were denied a remedy because they could not establish the defendant’s fraudulent state of mind. Equity regarded this as unfair and created the remedy of equitable rescission of the contract for innocent misrepresentation. The effect of rescission is to wipe out the contract.

23 For a very brief and readable history of the growth of English courts, see ‘History of the judiciary’ at . 24 The common law only recognised damages for negligent misrepresentation for the first time in 1964.

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F. The process of extracting the law from a case 1.32 We have seen that both common law and equity follow previous decisions. Courts in both jurisdictions are bound by the doctrine of precedent (stare decisis). However, if you look at any decision, you will find that it contains comments which form the basis for the court’s decision, as well as comments which are not strictly essential for that decision. The former comments are called the ratio decidendi (reasons for deciding) and the latter are called obiter dicta (things said by the way). It is only the ratio decidendi which is binding. Obiter dicta has persuasive force only. Often it is difficult to isolate the ratio of a decision. For example, the High Court regularly sits with five members. The ultimate decision might be split three to two. Amongst the three (in the majority), each judge might have a different reason for deciding as he or she did. This makes it difficult to extract the ratio. If the differences between the instant case and the precedent are material, the court in the instant case can distinguish the precedent case. This means that the ratio decidendi that was applied in the precedent case is inapplicable to the instant case because of the difference in facts. From time to time you will hear a court say that a previous case should be restricted to its facts. This generally means that the court is not particularly impressed with the earlier decision, but is unwilling or unable to overrule it.

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The primacy of parliamentary law over case law 1.33 Where there is a question of conflict between parliamentary law and judge-made law, parliamentary law is always superior (provided, of course, it is constitutionally valid). There was a time when parliament largely left judgemade law to develop in its own way — thus, the rules of contract and tort developed through a myriad of court judgments with parliament having little to say on the issues. This attitude changed after the Second World War. More and more, parliament took a crucial role in determining the course of law, even in those areas originally regarded as the almost exclusive domain of judge-made law. Three examples taken from laws discussed in this book demonstrate this changed attitude.

A. The law of negligence 1.34 In recent years, parliaments have involved themselves in the common law of negligence. During the 1990s, a debate arose over the costs of negligence. Negligence claims, so it was said, were becoming more common and the awards getting larger and larger. Insurance companies increased the price of insurance and, in some cases, refused to insure at all. Australia had, so it was said, an 24

Chapter 1: Introduction to the Law and Marketing

insurance crisis. The crisis affected all industries, but was particularly severe in industries such as health and leisure. Following an enquiry, all Australian parliaments decided to intervene and to enact negligence legislation. The legislation did not replace the common law as the source of an action in negligence, but it did codify some of the important elements or principles of negligence. The legislation also put caps on the amounts that could be claimed. Thus, in two important respects parliament replaced the courts as the source of negligence law. The courts no longer have any discretion to develop these two areas of negligence according to common law principles. Negligence is discussed at 9.3–9.12, in relation to product liability.

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B. Consumer protection law 1.35 Parliament has largely taken over the protection of consumers. As society entered an age of mass distribution, the power in negotiating consumer contracts clearly resided with commercial sellers, not consumers. Sellers used this power to prevent consumers from accessing many of the rights which might otherwise have flowed from having a contract. Thus, railway proprietors exempted themselves from liability for providing poor and unsafe services. Retailers could exempt themselves from the consequences of selling faulty products. The device used to limit liability was an exclusion or exemption term in the contract, usually contained in a ticket or a sign. Often the consumer knew nothing about the clause. Even if they did know, it would not matter — the consumer had no power to alter the terms. Some judges made valiant attempts to protect the consumer by interpreting the exclusion clauses favourably to the consumer. However, the ability to protect the consumer within the confines of judge-made law was ultimately quite restricted. Real protection could only come from parliament. With the rise of the consumer movement as a political force, parliaments moved to provide protection for consumers through legislation. The latest example in this process in Australia was the enactment of the Australian Consumer Law, which is the principal consumer protection law in Australia, as discussed at 1.13. The Australian Consumer Law is a single, national law, which applies in the same way nationally and in each state and territory.25 Various provisions of the Australian Consumer Law relevant to a marketing context are discussed in Chapters 9–11.

25 The full text of the Australian Consumer Law is set out in Sch 2 to the Competition and Consumer Act 2010 (Cth). General guidance about the Australian Consumer Law and its provisions can also be found on the Australian Consumer Law website (consumerlaw.gov.au) and on the Australian Competition and Consumer Commission website (accc.gov.au).

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C. Competition law 1.36 Since the 1960s, parliament has played a significant role in regulating how businesses compete with one another. The cornerstone of this regulation is competition law. Prior to the 1960s, price fixing and other anti-competitive arrangements were common among Australian businesses. These anti-competitive arrangements harmed consumers (and the economy) by raising prices above market levels and artificially restricting consumer choice. The common law had rules against agreements in restraint of trade, but the manner in which the courts had interpreted the law on restraints and the limitations imposed by the nature of the common law rule (viz, only parties to the contract were entitled to a remedy for an unlawful restraint of trade) meant that the common law rule against restraints of trade had very little practical operation as a regulatory tool to protect consumers and the economy. Tort law was also wholly inadequate as a regulatory mechanism. Because the common law failed to provide the necessary rules to operate a regulatory regime against anti-competitive conduct, it was up to parliament to intervene. This occurred with the introduction of trade practices (competition) legislation based on US and European law.26 The Competition and Consumer Act 2010 is the primary legislative tool regulating anti-competitive trading practices in Australia. On 4 December 2013 the government announced that it would undertake a comprehensive ‘root and branch’ review of Australia’s competition laws and policy, the first in more than 20 years.27 The expert review panel was led by Professor Ian Harper and was known as the Harper Review. The Harper Review released its Final Report on 31 March 201528 and made 56 recommendations for reform across three key themes: competition policy, laws and institutions. On 24 November 2015 the Treasurer released the government’s response to the Competition Policy Review.29 After much debate, in 2017 two important legislative amendments to Australian competition law passed parliament, which implemented many of the Harper Review’s recommendations: the Competition and Consumer Amendment (Competition Policy Review) Act 2017 and the Competition and Consumer Amendment (Misuse of Market Power) Act 2017. These significant amendments to the Competition and Consumer Act 2010 commenced on 6 November 2017. Competition law, including the relevant amendments from the Harper Review, is discussed in detail in Chapters 12–17.

26 Trade Practices Act 1974 (Cth) (now the Competition and Consumer Act 2010 (Cth)). Past attempts to introduce competition rules failed on constitutional grounds (Australian Industries Preservation Act 1906; Trade Practices Act 1965) or were inadequate (Restrictive Trade Practices Act 1971). 27 Hon Bruce Billson MP, ‘Review of Competition Policy’, media release, 4 December 2013, available at . 28 See the Competition Policy Review, Final Report, March 2015, available at . 29 See ‘Government response to the Competition Policy Review’, November 2015, available at .

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An age of regulation 1.37 There are many other examples of parliaments intervening to regulate social and economic life. In fact, the modern age is an age of regulation, reflecting the view that the state can improve the lives of its citizens by appropriate intervention in a wide range of social and economic activities. Regulatory intervention may take many forms (for example, industry assistance or export incentives), but, as we have just seen, one of the most important is through the use of legal rules. Additionally, even most non-legal forms of regulatory intervention require parliamentary approval through an Act of Parliament. This trend towards the ever-increasing involvement of parliaments at the expense of the common law is likely to continue. Most areas of law relevant to marketing are now dominated by statutory law.

Private law and public law 1.38 Broadly speaking, private law involves disputes between citizens, while public law involves disputes between citizens and the state. The distinction, however, is often hazy.

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TABLE 1.3 ALLOCATION OF AREAS OF LAW BETWEEN PRIVATE AND PUBLIC LAW PRIVATE LAW

PUBLIC LAW

Contract law Tort law Family law Property law Wills

Criminal law Administrative law Constitutional law Revenue law Industrial law

Civil cases and criminal cases 1.39 A more important distinction is that between civil cases and criminal cases. The critical difference between the two is the level of proof required to establish an infringement of the law. Whereas a breach in a civil law case requires proof of the infringement on the balance of probabilities, in criminal cases the standard of proof required is beyond reasonable doubt. The criminal burden of proof is thus considerably higher. Criminal cases are also subject to more rigorous procedural rules than civil cases and often require proof of a specified state of mind (usually intention or knowledge). This reflects the community’s view that a person should not be labelled a criminal and be exposed to criminal penalties unless that is well and truly established. Where a case is brought by the state (acting through the relevant administrative authority), the action may be civil or criminal. This depends on the relevant 27

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Marketing and the Law

statute. Where parliament elects to make infringement of a statutory provision a criminal offence, it will nominate the penalties that accompany such a breach — imprisonment and/or fines. Crimes such as murder, armed robbery, and fraud attract long prison sentences. However, in the area of marketing law, prison sentences are the exception rather than the rule. Monetary penalties (fines) are much more common. Thus, breaches of s 151 of the Australian Consumer Law dealing with false or misleading representations (a part of the Competition and Consumer Act) attract criminal penalties in the form of significant fines, but do not attract prison sentences. The fact that parliament empowers the courts to impose a fine for a breach does not necessarily mean that the case is a criminal case. Sometimes parliament will elect to impose what is called a civil penalty. This practice has become more and more popular in recent decades. A civil penalty may be a significant fine, but does not include imprisonment. Civil penalties are widely used in the Competition and Consumer Act. For example, s 29 of the Australian Consumer Law mirrors s 151 (discussed above) in all respects except that it makes liability civil not criminal. Thus, s 29 makes making false or misleading representations a civil offence with fines equal to those imposed in a criminal case for a breach of s 151.30 Another example is anti-competitive cartel activities which have attracted civil penalties since 1974, but now also attract not only the possibility of criminal fines but also (with respect to individuals who have aided, abetted, counselled, procured or induced a corporation to contravene the cartel provisions, conspired with others to do so or been knowingly concerned in a contravention) prison sentences.31 The upshot of having a dual system of penalties is that the Australian Competition and Consumer Commission (ACCC), which administers the Competition and Consumer Act (including the Australian Consumer Law), must decide whether to initiate civil proceedings or refer the matter to the Commonwealth Director of Public Prosecutions (CDPP) for possible criminal proceedings.32 Generally speaking, criminal cases are reserved for the more egregious breaches of the law where the evidence of breach is clear. Why have a dual system of penalties? The major reason for the introduction of civil penalties is to ensure better compliance with the law. Making an infringement criminal introduces elements that complicate the object of compliance — a higher standard of proof, special procedural rules, and the stigma of labelling someone ‘a criminal’.33 A dual system thus satisfies both the need for maximising compliance 30 See 10.67. 31 See Chapters 12 and 13. 32 In deciding whether to prosecute, the CDPP follows the Prosecution Policy of the Commonwealth; see . 33 A criminal conviction can have adverse consequences beyond the immediate penalty and the stigma attached to being labelled ‘a criminal’. For example, visa applications often require the applicant to reveal whether they have ever been convicted of a criminal offence. The consequence might be refusal of a visa.

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(by imposing civil penalties) and the need to express the community’s displeasure at certain activities (by imposing criminal penalties). Where a case is between two private parties — that is, the state is not included — the matter is a civil case. The remedies that a court may order are quite numerous, including monetary compensation (damages) and injunctions, as well as a variety of other remedial orders. The majority of cases in the areas of copyright and designs, patents, and trade marks are private actions. Therefore, the civil standard of proof applies.

Dispute resolution 1.40 It is inevitable in any community that there will be disputes, which will often have a legal aspect. Such disputes may be resolved in a variety of ways. The most common method is for the parties to negotiate a settlement between themselves. Where negotiation fails, the parties will have to resort to either the courts (or a relevant tribunal) or to some alternative form of dispute resolution.

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A. Resolving disputes through the courts 1.41 When two parties fall into dispute (for example, two pharmaceutical companies disputing a patent), one option is to take the dispute to court. Most of the laws discussed in this book are federal and most of the cases are heard in the Federal Court. One party (called the applicant in the Federal Court) files an application with the court together with a statement setting out their claim. A copy is then served on the other party (the respondent). The respondent may then join issue. If the matter is not settled, it will go to trial before a single judge. The role of the trial is to determine the facts and then to apply the law to those facts to determine whether the applicant has made out his or her complaint. Both parties are entitled to examine or cross-examine witnesses. A party that considers that the trial court has made an error of law may appeal to the Full Court of the Federal Court. An appeal is not a rehearing of the dispute. The sole responsibility of the appeal court is to determine whether an error of law has been made. If a material error has occurred, the appeal court may (depending on the circumstances) make a new order or return the matter to the trial judge to be decided according to the proper law. In a limited number of situations, a party may be granted leave to appeal to the High Court against the decision of the Full Federal Court. There is no automatic right of appeal to the High Court.

B. Alternative dispute resolution 1.42 Where the parties to a dispute have failed to negotiate a settlement but they do not want to involve themselves in litigation, there are other options open to them. They may decide to utilise alternative processes like mediation, conciliation, 29

Marketing and the Law

and/or arbitration. These are collectively known as alternative dispute resolution methods, or ADR. Conciliation, mediation, and arbitration all make use of an impartial outsider — that is, a third party independent of the parties in dispute — to aid in the resolution of the matter. In conciliation and mediation, the third party endeavours to facilitate the parties reaching an agreement about the dispute. The difference between mediation and conciliation is that a conciliator is more likely to take an active role by providing suggestions for an agreement or even providing a draft agreement for parties to consider, whereas a mediator’s role is more passive. In arbitration, the third party — called the arbitrator — hears the arguments of both parties before reaching a decision about the dispute. The decision is called an arbitral award and is legally binding on all parties. Of these ADR processes, the closest to litigation is arbitration. However, arbitrators are not judges; for example, an arbitrator’s experience might be in technical areas relevant to the dispute in question. The parties jointly agree on which arbitrator or arbitrators will hear their dispute. Arbitration for commercial disputes is regulated by legislation, through a series of Commercial Arbitration Acts.34 It is quite common for commercial contracts to contain a compulsory arbitration clause. ADR is generally faster and cheaper than litigation, although the parties must pay for the venue and the costs of the mediator, conciliator, or arbitrators. ADR processes are held in private, meaning that the evidence and the agreements or awards are not available to the general public.

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The Law and Compliance 1.43 Legal compliance should be a top priority among business organisations, regardless of their size. It is an important aspect of good management and of being a good corporate citizen. A sound legal compliance program will reduce business risk and can also assist businesses to compete more effectively in the marketplace. In fact, organisations can no longer afford not to have a legal compliance program. One only has to look at the level of penalties imposed for a breach of the Competition and Consumer Act (including the Australian Consumer Law) to realise the accuracy of this observation. For corporations, the maximum penalties 34 International arbitration is governed by the International Arbitration Act 1974 (Cth); domestic arbitration is governed by uniform state legislation: Commercial Arbitration Act 2010 (NSW), Commercial Arbitration Act 2013 (Qld), Commercial Arbitration Act 2011 (SA), Commercial Arbitration Act 2011 (Tas), Commercial Arbitration Act 2011 (Vic), and Commercial Arbitration Act 2012 (WA).

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Chapter 1: Introduction to the Law and Marketing

for breaches of Pt IV of the Competition and Consumer Act for each act or omission will be the greater of $10 million, or three times the value of the benefit received, or where the benefit cannot be calculated, 10% of annual turnover in the preceding 12 months. The maximum financial penalty for individuals involved in the conduct is $500,000. In the case of serious cartel conduct, for individuals involved in a cartel there is also now the possibility of a jail term of up to 10 years and/or a fine of up to 2000 penalty units.35 As discussed at 1.13, from 1 September 2018 the maximum penalties under the Australian Consumer Law were increased to align with the maximum penalties under the competition provisions of the Competition and Consumer Act.36 The increase in the maximum available penalties reflects the seriousness with which violations of consumer law are now regarded. The ACCC has made clear that it will seek higher penalties for consumer law breaches37 and has been increasingly active in taking enforcement proceedings under the Australian Consumer Law. Accordingly, it is essential that businesses adopt a culture of compliance to minimise exposure to potentially costly enforcement actions. It is not just the risk of incurring monetary and criminal penalties that should motivate an organisation to adopt a legal compliance program. There is a positive side to adopting such a strategy — a good compliance program can actually assist businesses to compete more effectively in the marketplace.

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What is a legal compliance program? 1.44 Put simply, a legal compliance program is a system designed to reduce an organisation’s risk of breaking the law38. The relevant Australian Standard describes an effective organisation-wide compliance ‘system’ as one that ‘enables an organization to demonstrate its commitment to compliance with relevant laws, including legislative requirements, industry codes and organizational standards as well as standards of good corporate governance, best practices, ethics and community expectations.’39

35 See Chapter 13. 36 Following the royal assent of the Treasury Laws Amendment (2018 Measures No 3) Act 2018. 37 R Sims, Chair of ACCC, Address to the Law Council of Australia Annual General Meeting, 3 August 2018. 38 See A Fels, ‘Compliance Programs — the benefits for companies and their stakeholders’ (1999) 24 ACCC Journal 14–18 and L Sylvan, ACCC Deputy Chair, ‘Future proofing — working with the ACCC’, address to the Australian Compliance Institute, 1 September 2005. 39 Australian Standard ‘AS ISO 19600:2015 — Compliance management systems’, 22 June 2015, ‘Introduction’, p iv. This standard was prepared by the Standards Australia Committee QR-014, Compliance System, to supersede AS 3806–2006 — Compliance Programs. The new standard introduced new terminology. While AS 3806 covered a compliance ‘program’, AS ISO 19600 addresses a compliance ‘management system’. It emphasises compliance being ‘integrated with the organisation’s financial, risk, quality, environmental and health and safety management processes and its operational requirements and procedures’.

31

Marketing and the Law

It is important that a compliance program is not regarded by business as something to keep regulators happy or as an education or training exercise. Nor should it be regarded as a burden on the organisation. Rather, it should be seen as: • an opportunity to prevent or provide early detection of failures to comply with the law; • an opportunity to improve business operations; • an incentive to make ‘positive’ business decisions (other than reactive risk management); and • a means of saving the business time, money, and trauma — all consequences of breaking the law. While compliance is an outcome of an organisation meeting its obligations, it is ‘made sustainable by embedding it in the culture of the organization and the behavior and attitude of the people working for it’.40 This will depend primarily on ‘leadership at all levels and clear values of an organization as well as an acknowledgement and implementation of measures to promote compliant behavior’.41A regular compliance audit to ensure that the law is not being breached is vital. As one commentator said:42 Given the potentially severe penalties, if you are a secretary or senior manager of a business, it is important to ask yourself some basic questions: Are you in a position to assure the Board [of directors] that the internal controls against violations of the [Competition and Consumer] Act are based on a considered review of the basic elements of liability control? Are you able to confirm that the controls imposed are monitored and enforced?

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Can you provide convincing and documented demonstration to the Board of the adequacy of your company’s compliance controls should they be examined in court or elsewhere?

Reasons to adopt a legal compliance program A. Benefits of compliance programs 1.45 Generating a business culture of compliance can improve an organisation’s performance in the marketplace. For instance, the need to improve the safety and quality of products may encourage a company to be more progressive and innovative, ultimately providing the company with a competitive edge.43 By way of illustration of how compliance can promote profitability, a business that changes its product packaging to comply with environmental laws may reduce the quantity of packaging it uses (which may, at the same time, lowers 40 41 42 43

32

AS ISO 19600:2015, ‘Introduction’, p iv. AS ISO 19600:2015, ‘Introduction’, p iv. C Buik, Australian Company Secretary, May 2000, p 202. Fels, above n 38, at p 16.

Chapter 1: Introduction to the Law and Marketing

its packaging costs). Further, if it changes to more sustainable packaging it may attract new customers interested in ethical purchasing. An effective compliance program can also foster customer goodwill. This is most likely to occur if an effective complaints handling system is established. This may help a business to improve its customer service standards and retain customers. Further, having such a system in place can also help the business identify patterns of complaints which may point to problems with business units, processes, or products, which can then be proactively remedied. Thus, a complaints handling system can ultimately result in more efficient business processes, which can positively impact performance of the business in the marketplace. A complaints handling system is an essential component of an effective compliance program.44 Another benefit that a compliance program can provide is that, having a sound knowledge of the law, particularly business and marketing law, may help identify breaches of the law by third parties, such as competitors and suppliers. A business may suffer harm because of another firm’s illegal conduct — the affected party has legal rights to prevent such harm and/or seek compensation.

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B. Avoiding the costs of breaching the law 1.46 Despite the ‘positives’, there is no doubt that the initial impetus encouraging most organisations to adopt a legal compliance program is the desire to avoid the penalties and costs associated with a breach of the law, notably the Competition and Consumer Act (including the Australian Consumer Law). These include: • substantial pecuniary penalties; • the liability for damages; • the cost of adverse publicity orders, such as corrective advertising; • the flow-on costs of an investigation or prosecution by a regulator, such as the ACCC; • the cost of legal advice; • the impact negative publicity can have on profits; • the cost of counteracting negative publicity; • the diversion of resources away from core business activities; and • the cost of losing and replacing personnel who may ‘leave’ the organisation following an investigation or prosecution. The courts have long recognised the importance of compliance programs. For example, in assessing an appropriate pecuniary penalty for a breach of the Trade Practices Act (now the Competition and Consumer Act), Emmett J observed that ‘the cost of failing to comply should be set at a level which is significantly greater than the cost of ensuring compliance’ via a compliance program.45 44 Fels, above n 38, at p 17. See also AS/NZS 10002:2014 Guidelines for complaint management in organizations (which superseded AS ISO 10002-2006). 45 ACCC v MNB Variety Imports Pty Ltd (1998) ATPR 41-617 at 40,758.

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Marketing and the Law

The existence of a compliance program, however, will not assist a corporation unless the program is one of substance. French J imposed a very large penalty on the respondent in TPC v CSR Ltd,46 despite the fact that CSR had a compliance program. The judge described the compliance program as ‘desultory and in need of reinforcement’ and concluded that there was ‘little convincing evidence of a corporate culture seriously committed to the need to comply with the requirements of the [Competition and Consumer] Act’.47 One of the ACCC’s main roles is to prosecute offenders under the Competition and Consumer Act. It is common for the ACCC and the offender to reach an agreement over penalties. The agreement is then submitted to the court for approval. In negotiating such penalties the ACCC takes into account the existence of a compliance program. As was said in one case:48 It is a most important factor in mitigation of the amount of a penalty that, in a particular case, there must be acceptable evidence of a corporate culture of compliance, and of concern to ensure that the contravention which has occurred will not be repeated.

C. Compliance program as part of the ACCC’s enforcement activities 1.47 Compliance programs are also used as part of the ACCC’s enforcement activities. Section 87B of the Competition and Consumer Act gives the ACCC the ability to accept formal written undertakings in the exercise of its powers under the Act. As part of these undertakings, the ACCC will often require a company to implement a compliance program designed to prevent breaches of the Act occurring in the future.49

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Designing an effective compliance program 1.48 The production of an effective legal compliance program requires a methodical approach taking into account the business and its context. Ideally, a compliance program should be tailored to meet the needs of the individual business because each organisation’s circumstances are different. The starting point should involve an audit of the various business units within an organisation with a view to assessing the legal risks. Depending on the size, risk profile and operations of the company, different components will need to be included in a compliance program. Some of the greatest risks facing businesses in Australia emanate from the Competition and Consumer Act and, in particular, the Australian Consumer Law. These laws cover: 46 47 48 49

34

(1991) ATPR 41-076. (1991) ATPR 41-076 at 52,155. TPC v TNT Australia Pty Ltd (1995) ATPR 41-375 at 40,168. See ACCC, ‘Implementing a compliance program’ and ‘Compliance and Enforcement Policy’, both available at .

Chapter 1: Introduction to the Law and Marketing

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• restrictive trade practices (anti-competitive conduct); • unfair practices (such as misleading advertising and promotions, deceptive packaging, and labelling); • unconscionable conduct; and • quality and safety of goods and services. To assist organisations that do not have the resources to develop a tailored compliance program, the ACCC has produced templates that businesses can use to develop their own programs. There are four different templates, each reflecting what the ACCC considers appropriate given the size of the company — Level 1 designed for micro-businesses and Level 4 designed for large corporate entities. The templates are available on the ACCC website.50 Having a sound knowledge of competition and consumer law and ensuring compliance with those laws, are essential ingredients to the design of an effective compliance program. This book is designed to familiarise participants with all major parts of the Competition and Consumer Act (which includes the Australian Consumer Law). Armed with a sound knowledge of the contents and workings of these laws, a person with a good understanding of the type of conduct carried on within a business organisation will be able to identify conduct likely to involve legal issues. This in turn will identify the staff members most likely to commit a breach of the competition and consumer laws, which usually occurs because of the power or authority given to those staff members. Under the Competition and Consumer Act, any conduct engaged in by an employee of a corporation acting within the scope of their actual or apparent authority, is deemed to be the conduct of the corporation.51 This means, for example, that a sales manager may put a company at risk by getting involved in price fixing, market sharing, resale price maintenance, or misleading sales conduct. The best way of achieving behavioural compliance with the law is through ongoing education, providing incentives for compliance, and by auditing the performance of individuals. Certain procedural matters also need to be addressed to ensure compliance in an organisation. A compliance system must address both ‘behavioural’ and ‘procedural’ forms of conduct. Appropriate checks and balances need to be put in place by the introduction of systems and procedures. For example, there is a need to systematically check business contracts, the content of product labels and packages, and advertising material for compliance with the law. In other words, it is not enough to simply alert or ‘educate’ staff as to their legal obligations. There must be procedural follow-ups and checks to ensure that compliance is occurring. An example will illustrate this point. The ACCC brought a case against George Weston Foods for a breach of competition law.52 After pleading guilty to a breach, 50 See ACCC, ‘Implementing a compliance program’ at . 51 Competition and Consumer Act s 84 and Australian Consumer Law s 139B. 52 ACCC v Australian Safeway Stores Pty Ltd (1997) 145 ALR 36; (1997) ATPR 41-562, see 16.18C.

35

Marketing and the Law

George Weston Foods argued that the level of penalty imposed should be reduced in the light of the fact that it ran a competition compliance program for its employees. However, this was largely disregarded by the court, given that the senior officers who had engaged in the prohibited conduct had done so consciously and willingly, even if under commercial pressure from a major customer. Very significant pecuniary penalties were imposed on George Weston Foods. If designing a legal compliance system looks costly, it should be remembered that any outlays may end up being relatively small when compared to the potential savings emanating from legal compliance.

The Law and Competitive Advantage 1.49 While some laws control and regulate competitive behaviour in the marketplace, one should not lose sight of the fact that many laws actually exist to benefit or assist the marketer. Laws often recognise or create rights, and give the owners of those rights the means to protect them. For example, the marketer who invents a new product, or gives an old product a new appearance, or thinks up a new brand name, will often be able to register the creation and be legally recognised as the owner, with all its attendant rights. The marketing executive who is familiar with these ‘beneficial’ laws can obtain a marketing edge by taking advantage of such laws. Whether the law regulates or benefits the marketing process, it is a fact that most marketing decisions will contain a legal element. This can be best observed by considering the impact the law can have upon the elements of the marketing mix.

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Product 1.50 In developing a product, there are numerous laws that grant benefits to, or impose restrictions upon, the business organisation. If a new product is created, the business will need to consider laws designed to protect proprietary (ownership) interests. It may be possible to apply for a patent to protect a new invention. This can be an expensive and time-consuming process, so the marketer must weigh up whether taking such a step is worthwhile. As an alternative, the marketer may elect to rely upon the ability to keep information secret or confidential. This may be the only alternative if an invention is not patentable, but sometimes the marketer will decide that registering a patent is too expensive or not worth the time involved. Keeping a new product development secret may be a deliberate choice, given that a secret will be protected by law as long as it can be kept confidential, as opposed to a patent which has a limited life (usually 20 years maximum). The marketer who elects not to patent, however, runs the risk of independent discovery by a competitor and the consequent loss of any legal protection. 36

Chapter 1: Introduction to the Law and Marketing

Another choice the business organisation will need to make if an original design has been created for a product is whether to register that design. Design registration gives a proprietor up to 10 years’ protection, but again involves some expense. A business might therefore elect not to register a design, and choose instead to try and build up a reputation in the design as quickly as possible, which means that a passing off action can be relied upon to prevent a competitor from confusing consumers by imitating the design. However, if the competitor sufficiently distinguishes its product by other means, design imitation cannot be prevented. The brand name given to a new product is usually extremely important. If certain criteria are met, a brand name can be registered as a trade mark and protected indefinitely. If a business chooses not to register a brand name, or is unable to do so, the passing off action can be relied upon, although a reputation will have to be built up under that brand name. Usually a new product will have to be packaged or labelled. A wide range of laws can affect the choice of package size or material used, and a range of laws prescribes the information which must be included on labels placed upon specified products. Quantity and packaging decisions are regulated by laws prescribing appropriate weights and measures to be used, and by standards designed to prevent deception in packaging and confusion in the mind of the consumer between varying shapes and sizes of packages. In developing a new product, the marketer must also be aware of the wide variety of laws designed to protect the quality and safety of goods.

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Price 1.51 An important step in marketing a new product is the pricing decision. Again, the decision is not unfettered. The selling price chosen by a business must usually be an independent decision, as there are provisions under the Competition and Consumer Act which prohibit price fixing between competitors. A supplier, by virtue of the same Act, usually cannot specify a price that must be adhered to by a distributor or retailer. Furthermore, engaging in practices such as predatory price cutting — selling goods below cost, the purpose or effect of which is to substantially lessen competition — will breach the law.

Promotion 1.52 Clearly a marketer needs to acquaint the community with the range of products it has available so that consumers can best satisfy their needs. In addition, new desires and wants for products can be stimulated by advertising and promotion. Conversely, producers already in the market have a legitimate interest in keeping the nature and qualities of their goods or services before the consumer. Although the legitimacy of most advertising is undisputed, some advertising methods are clearly questionable. The advertiser must be aware of laws prohibiting 37

Marketing and the Law

misleading or deceptive conduct. For example, an advertiser may make a claim which is incapable of proof or which promotes a product or business by falsely disparaging that of a competitor. The law attempts to find a balance between the need of the consumer to be acquainted with products and their benefits on the one hand, and the protection of consumers and competitors against over-enthusiastic, unscrupulous, or misleading advertising on the other. Sometimes advertisers will use promotional techniques to persuade customers to buy their product. Some of these techniques overstep the boundaries of fairness, such as bait advertising; that is, advertising the availability of goods or services that are not available in reasonable quantities. Other techniques, such as running market competitions and lotteries, are regulated because they have traditionally been regarded as a nuisance at law. Door-to-door selling, electronic messaging, and telemarketing are regulated because of the potential for abuse. It is therefore necessary for the marketer to examine the extent to which the existing law allows such methods of promotion.

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Place 1.53 Another way of matching the supply of products available and consumer needs is to find the most efficient channels of distribution. Selling direct online is increasing in popularity, which has required some regulatory laws to be introduced to protect online purchasers. The most efficient path to the market is not necessarily the most direct, as often it is inefficient for manufacturers of products to sell directly to consumers. Usually producers of goods utilise wholesalers and/ or retailers to achieve the most efficient channel of distribution. However, the very fact that distributors for a product are required can create legal problems. Those problems are likely to arise should the manufacturer wish to strictly define the ambit of operation of distributors as to: • the products they sell; • the customers they may deal with; or • the areas in which they may operate. In particular, a manufacturer may require a distributor to direct all its efforts to marketing the product exclusively. Such arrangements may have an adverse effect upon competition, in which case the exclusive dealing provisions of the Competition and Consumer Act come into play.

The competitive process 1.54 The Competition and Consumer Act is premised upon the fact that society’s needs are best served by free and fair competition. Anti-competitive behaviour of various forms, some of which have already been alluded to, is prohibited by these laws. Cooperating or colluding with competitors to entrench one’s position in the marketplace, or to increase market share, is likely to have legal repercussions. 38

Chapter 1: Introduction to the Law and Marketing

Arrangements between competitors that substantially lessen competition in the marketplace are unlawful. Certain types of arrangement are deemed anticompetitive and are prohibited outright, such as market sharing agreements and most forms of price fixing. The marketer needs to know in what circumstances cooperation with competitors will result in illegality. If a firm has a substantial degree of market power, it must not engage in conduct that has the purpose or effect of substantially lessening competition in a market. Such conduct is likely to be illegal. Furthermore, increasing one’s market share by merging or acquiring another firm may be unlawful if the result is a substantial lessening of competition in the marketplace.

Summary and Objectives of this Text 1.55 This book has been written to enable those in business and students to ascertain and understand the key legal principles that apply to the marketing of goods and services. It is structured in such a way that the marketer can readily determine how the law may affect one or more of the elements that go to make up the marketing mix. TABLE 1.4 SUMMARY OF THE CONTENTS OF THIS TEXT PRODUCT LAW

PURPOSE

TEXT REFERENCE

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INTELLECTUAL PROPERTY: Patents Act

Grants limited monopoly rights to registered owners of inventions and innovations.

Chapter 2

Breach of confidence

Protects confidential information.

Chapter 3

Copyright Act

Grants limited exclusive rights to creators of original works and specified material.

Chapter 4

Designs Act

Grants limited monopoly rights to new and distinctive designs for commercial products.

Chapter 5

Passing off

Protects the owners of distinctive trade designations, including brand names, business names, and the overall ‘get-up’ of a product.

Chapter 6

Trade Marks Act

Grants monopoly rights to registered proprietors of trade marks.

Chapter 7

Business names legislation

Requires persons not trading under their own Chapter 7 name to publicly register the business name.

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Marketing and the Law TABLE 1.4 SUMMARY OF THE CONTENTS OF THIS TEXT — cont’d PRODUCT CONT. LAW

PURPOSE

TEXT REFERENCE

PACKAGING AND LABELLING: Australian Consumer Law Protects consumers from misleading packaging and labelling practices, and prescribes product information and safety standards.

Chapter 8

Trade measurements legislation

Requires traders to provide accurate information concerning the mass (weight) and measure of goods.

Chapter 8

Poisons and dangerous goods legislation

Imposes controls upon the packaging and labelling of poisonous substances and dangerous goods.

Chapter 8

Food and health legislation

Requires traders to provide information on packages and/or labels of food and nonfood products.

Chapter 8

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PRODUCT LIABILITY: Australian Consumer Law Provides consumers with statutory guarantees designed to ensure that goods Pt 3-2 and services meet minimal standards or comply with their description.

Chapter 9

Negligence

Imposes liability upon traders to compensate persons likely to be injured by the trader’s carelessness in producing and marketing goods or services.

Chapter 9

Australian Consumer Law Imposes statutory obligations upon manufacturers to guarantee that goods Pts 3-2 and 5-4 meet minimal quality standards or comply with the description applied to them.

Chapter 9

Australian Consumer Law Imposes liability upon manufacturers to Chapter 9 Pt 3-5 compensate any person who is injured or suffers loss as a result of a defective product, without the need to prove negligence.

40

Chapter 1: Introduction to the Law and Marketing TABLE 1.4 SUMMARY OF THE CONTENTS OF THIS TEXT — cont’d PROMOTION LAW

PURPOSE

TEXT REFERENCE

ADVERTISING: Australian Consumer Law Prohibits all forms of misleading or deceptive conduct, including misleading advertising and selling practices.

Chapter 10

SALES PROMOTION: Lotteries and gaming legislation

Controls the conduct of lotteries and games designed to promote a business or product.

Chapter 11

Australian Consumer Law Pt 3-2 Div 2

Regulates unsolicited consumer transactions (such as sales made door-todoor or on the telephone) by providing a ‘cooling off’ period entitling the customer to avoid the transaction.

Chapter 11

Australian Consumer Law Pt 3-1

Prohibits a range of unfair promotional practices, including bait advertising, misleading sales talk, harassment and coercion, inertia selling, referral selling, and pyramid selling.

Chapter 11

Spam legislation

Regulates unsolicited email material.

Chapter 19

Telemarketing legislation

Regulates unsolicited phone marketing.

Chapter 19

Privacy legislation

Regulates the collection, storage, and use of personal information.

Chapter 19

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E-MARKETING:

PRICE LAW

PURPOSE

TEXT REFERENCE

Competition and Consumer Act Pt IV Div 1

Prohibits competitors from entering into agreements to regulate prices they adhere to in the marketplace.

Competition and Consumer Act s 45

Prohibits agreements that result in Chapter 13 different customers being charged different prices (price discrimination) if the purpose or effect is to lessen competition in the marketplace.

Chapter 13

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Marketing and the Law TABLE 1.4 SUMMARY OF THE CONTENTS OF THIS TEXT — cont’d PRICE CONT. LAW

PURPOSE

TEXT REFERENCE

Competition and Consumer Act s 46

Prohibits a trader with a substantial degree of market power from engaging in conduct which has the purpose or effect of substantially lessening competition in a market. Such conduct includes refusals to deal and unfair pricing practices, such as predatory price cutting and price discrimination.

Chapter 14

Competition and Consumer Act s 48

Prohibits the practice of resale price maintenance, where a trader attempts to prevent a purchaser from reselling goods or services below a specified minimum price.

Chapter 16

PLACE

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LAW

PURPOSE

TEXT REFERENCE

Competition and Consumer Act ss 46 and 47

Prohibits various forms of restrictions Chapter 17 imposed upon distributors (including the right to buy from others, and customer and territorial restraints) if those restrictions have the purpose, effect or likely effect of substantially lessening competition in the marketplace.

Franchising Code of Conduct

Regulates the conduct of parties involved in Chapter 18 the franchising industry.

Restraint of trade doctrine

Prevents suppliers of goods from imposing unreasonable restraints upon the freedom of a distributor/franchisee to buy from or to supply other persons in the marketplace.

Chapter 18

THE COMPETITIVE ENVIRONMENT LAW Restrictive trade practices legislation: Competition and Consumer Act and State Competition Codes

42

PURPOSE Prohibits a range of anti-competitive practices, including collusive conduct (such as collective refusals to deal, market sharing, output restrictions, bid-rigging, and price fixing), misuse of market power, exclusive dealing, vertical price fixing (resale price maintenance), and mergers.

TEXT REFERENCE Chapters 12–17

Chapter 1: Introduction to the Law and Marketing

After reading this book, marketers should be able to: • illustrate a basic knowledge of the laws impacting upon decision making in the marketplace, in particular the Competition and Consumer Act (including the Australian Consumer Law) and laws regarding patents, copyright, designs, and trade marks; • assess whether an organisation is complying with the law; • understand the importance of an effective legal compliance program;53 • understand the costs and consequences of non-compliance with the law; • appreciate the competitive benefits of complying with the law; and • recognise the opportunities the law provides to protect commercially valuable creations and ideas produced by business organisations.

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The need for legal compliance is reinforced at the end of each chapter under the heading ‘Marketing Advice’. Where relevant, the competitive benefits provided by the law are also summarised. It is a very important part of the book.

53 The book does not, nor is it intended to, cover every law that might impact upon a business. A compliance program will always need to be tailored to meet the specific requirements of a particular organisation and, as such, will usually need to involve the organisation’s own legal counsel.

43

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Protecting Inventive Ideas

1 2

Intellectual Property and Marketing ............................................... 2.2 Introduction to Patents ..................................................................... 2.3 Two types of patent ....................................................................... 2.4 Patents in Practice .............................................................................. 2.5 Standard Patents ................................................................................ 2.6 Is the invention a manner of manufacture? ................................ 2.7 A. Business method patents ..................................................... 2.8 B. Product improvements ......................................................... 2.9 C. Methods for treating the human body ............................ 2.10 D. Genes ..................................................................................... 2.11 E. Non-patentable inventions ............................................... 2.12 Is the invention novel? ................................................................. 2.13 A. Disclosure in a prior patent application ........................... 2.14 B. Disclosure in a public document ........................................ 2.15 C. Disclosure by doing an act .................................................. 2.16 D. Exceptions to the strict rules of non-disclosure or use — grace periods ........................................................ 2.17 Does the invention contain an inventive step? ....................... 2.18 A. The non-inventive skilled person test ............................... 2.19 B. Describing the non-inventive skilled person ................... 2.20 C. Factors relevant to assessing inventiveness ..................... 2.21 Is the invention useful? ............................................................... 2.22 Has an invention been secretly used? ....................................... 2.23 Applying for a Standard Patent ...................................................... 2.24 The application .............................................................................. 2.24 Examination by the Patents Office ............................................ 2.25 Opposing a patent ........................................................................ 2.26 45

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Marketing and the Law

What are the claims? ................................................................... 2.27 Importance of the priority date .................................................. 2.28 Duration of a standard patent .................................................... 2.29 Patents of addition ....................................................................... 2.30 Innovation Patents............................................................................. 2.31 Purpose of the innovation patent ............................................... 2.31 What is an innovative step? ....................................................... 2.32 Innovation patent process .......................................................... 2.33 Duration of an innovation patent .............................................. 2.34 Review of the innovation patent system..................................... 2.35 Ownership of Patents ...................................................................... 2.36 Who is the inventor? .................................................................... 2.37 Employee inventions .................................................................... 2.38 A. Was the inventor an employee? ....................................... 2.39 B. Was the invention created in the course of employment? .................................................................. 2.40 Patent Rights .................................................................................... 2.41 Nature of patent rights ................................................................ 2.41 Assigning or licensing patent rights ........................................... 2.42 Abuse of patent rights ................................................................. 2.43 Compulsory licences .................................................................... 2.44 Purchasers of patented products ............................................... 2.45 Infringement of Patents .................................................................. 2.46 Rules relating to infringement ..................................................... 2.46 Determining the scope of the claims ........................................ 2.47 Determining whether the essential elements of the claims have been taken ................................................ 2.48 Determining whether any exceptions or defences to infringement apply.......................................................................2.49 Practical aspects of protecting patent rights ........................... 2.50 Contributory infringement ........................................................... 2.51 Prior user rights ............................................................................. 2.52 Remedies for Infringement ............................................................. 2.53 Damages or an account of profits .............................................. 2.54 Injunctions ..................................................................................... 2.55 A. Anton Piller order ................................................................ 2.56 B. Mareva injunction ............................................................... 2.57 Other orders .................................................................................. 2.58 Making Unjustified Threats ............................................................ 2.59 Revocation of Patents ...................................................................... 2.60 International Aspects of Patents .................................................... 2.61 Paris Convention ........................................................................... 2.62 TRIPS Agreement .......................................................................... 2.63 Patent Cooperation Treaty ......................................................... 2.64 European Patent Convention......................................................... 2.65 46

Chapter 2: Protecting Inventive Ideas

2.66 2.66 2.67 2.68 2.69 2.70

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Advantages and Disadvantages of a Patent.................................. Disadvantages of a patent ........................................................... Advantages of a patent ................................................................ Conclusion ..................................................................................... Plant Breeder’s Rights ..................................................................... Marketing Advice ..............................................................................

47

Marketing and the Law

2.1 The next five chapters deal with marketing aspects of intellectual property. Intellectual property is the expression used to describe the rights attaching to such things as inventions, trade marks, product designs, and copyright material.1 This chapter begins with a discussion of the importance of intellectual property to marketing. It then examines how inventions may be protected by the use of patents law.

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Intellectual Property and Marketing 2.2 In all areas of intellectual property there is trade-off between the creator’s right to commercially exploit his or her novel idea and the community’s right to benefit from these creations. For this reason, intellectual property rights are carefully defined and most are strictly limited in duration. Intellectual property rights are regarded as personal property and can be bought, sold, and licensed like other forms of property. The main reason for intellectual property laws is to cure what economists call a market failure. A lot of time, effort, and money goes into creating new commercial ideas. Some work, but many do not. If new ideas were not protected by law, the good ones would be copied. As they can easily be copied at little expense, no one would be prepared to pay for them. There would be no market for ideas. If no one was willing to pay, the incentives to invest in costly research and development would vanish. The community would suffer because the level of innovation would diminish. There are three reasons why intellectual property laws are important to marketers. First, knowledge of intellectual property law may help to avoid unnecessary costs. The task of the marketer is to identify market opportunities, to advise on the development of products to take advantage of those opportunities, and to place the products to the best effect. In assessing development strategies, it is important to know those areas which have already been staked out by others. For example, it is pointless spending valuable research and development dollars creating a product that infringes someone else’s patent rights. The effort would

1

48

Article 2(viii) of the 1967 Convention establishing the World Intellectual Property Organization (WIPO) defines ‘intellectual property’ to include the rights relating to: (1) literary, artistic and scientific works; (2) performances of performing artists, phonograms and broadcasts; (3) inventions in all fields of human endeavour; (4) scientific discoveries; (5) industrial designs; (6) trade marks, service marks, and commercial names and designations; (7) protection against unfair competition; and all other rights resulting from intellectual activity in the industrial, scientific, literary or artistic fields.

Chapter 2: Protecting Inventive Ideas

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have been better spent trying to obtain an assignment or a licence of the patent or even acquiring the business that owns the technology. Second, knowledge of intellectual property law may help in uncovering opportunities that would otherwise be missed. The rights created by the intellectual property laws are by no means unchallengeable. In some cases the rights may have been wrongly granted. For example, the Patent Office may have granted a patent for an invention that was not new. Such patents can be challenged and, if the challenge is successful, revoked. Third, knowledge of intellectual property law may help in protecting an investment. There is little commercial sense in spending big dollars to develop a new product only to have a competitor replicate the product (and take a large slice of the market) when such competition could have been avoided by, for example, lodging a patent application in time. Once the product has been launched, it is generally too late to seek patent or design registration.

49

50

4

2 3

10 years

Yes

The look or shape of a product (the visual appearance of a product)

DESIGNS ACT 2003 (CTH)

20 years4 (standard patent); 8 years (innovation patent)

Yes

New and inventive industrial products and processes; Innovations (innovation patents)

PATENTS ACT 1990 (CTH)

As long as information is secret and valuable

No

Commercial information that is secret and has value

CONFIDENTIAL INFORMATION

10 years + indefinitely

Yes

Distinctive marks

TRADE MARKS ACT 1995 (CTH)

As long as reputation in name or get-up remains distinctive

No

Reputation in a distinctive designation or get-up

PASSING OFF2

Section 18 of the Australian Consumer Law usually provides an alternative to common law passing off. Some forms of subject matter other than works have shorter periods of protection. For example, television or sound broadcasts are protected for 50 years after the broadcast: Copyright Act 1968 s 95; and copyright in published editions of works subsists for 25 years after publication: Copyright Act 1968 s 96. In some circumstances, an extension can be granted for patents relating to pharmaceutical substances: see Patents Act 1990 ss 70–79A.

For works, life of creator + 70 years or +70 years from when work first made public; For subject matter other than works, typically 70 years from making or when first made public3

How long does protection last?

No

Is registration required?

The manner in which ideas are expressed; Includes literary, artistic, dramatic and musical works, and other subject matter such as films, broadcasts, recordings

What is protected?

COPYRIGHT ACT 1968 (CTH)

TABLE 2.1 AN OVERVIEW OF AUSTRALIAN INTELLECTUAL PROPERTY LAWS

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Marketing and the Law

5

No

Registration; Policing infringement; Fighting revocation proceedings

The exclusive right to apply the design to the product in respect of which the design is registered

DESIGNS ACT 2003 (CTH)

No

Registration; Policing infringement; Fighting revocation proceedings

The right to stop others exploiting the invention or innovation (‘exploit’ includes to make, hire, sell, or otherwise dispose of the invention)

PATENTS ACT 1990 (CTH)

Yes

Protecting secrecy; Policing infringement;

The right to stop unauthorised disclosure or use of trade secrets (no power to stop independent discovery or reverse engineering)

CONFIDENTIAL INFORMATION

Yes

Registration; Policing infringement; Fighting revocation proceedings

The right to stop others using the mark or any other mark that is deceptively similar in relation to the exact or similar goods or services for which the mark is registered5

TRADE MARKS ACT 1995 (CTH)

No

Establishing reputation and misrepresentation; Defending reputation

The right to stop others using a similar designation or get-up in such a way as to indicate a false connection with the plaintiff

PASSING OFF

Or similar goods or closely-related services: Trade Marks Act 1995 s 120(2). In some cases this extends to unrelated goods or services: Trade Marks Act 1995 s 120(3).

No (exceptions exist for books, music CDs, computer programs, product labels, and packaging)

Are parallel imports allowed?

Establishing copyright; Policing infringement

Expense

The exclusive right to reproduce, publish, adapt, perform in public, and communicate to the public the copyright work (the rights vary according to the type of work)

What are the rights enjoyed by the owner?

COPYRIGHT ACT 1968 (CTH)

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Chapter 2: Protecting Inventive Ideas

51

Marketing and the Law

Introduction to Patents 2.3 The purpose of the law of patents is to protect inventive products or processes by giving the inventor exclusive rights over the invention for a period of time. In this way, inventors are given an economic incentive to use their creative talents, and investors are encouraged to risk their capital on new ideas. The protection, however, is limited in time and the inventor is required to publicly disclose the invention. Once the period of the patent has expired, the invention becomes public property and anyone can then utilise it without permission from the patentee. This should create an environment in which technological progress is stimulated. For instance, an invention once made public may suggest to other inventors further improvements or a better solution to a problem. To obtain protection under the Patents Act 1990 (Cth), inventions must be registered with the Patent Office at IP Australia, the Commonwealth government agency established to grant specialised intellectual property rights. Once registered, the patent owner obtains a monopoly to exploit the invention. From the marketer’s point of view, the essential feature to grasp from the law of patents is that the application for registration must be made at an early stage in the life of the invention. If the invention is used prior to lodging a patent application, the inventor may lose the right to register. In deciding whether to apply for a patent, the inventor must bear in mind that he or she is required to publicly disclose the invention. This is the trade-off required by the Patents Act. If the inventor chooses to bypass the patent process or fails to apply for registration in time, legal protection for the invention may still be possible if the inventor can keep the invention secret.

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Two types of patent 2.4 The Patents Act recognises two types of patents. TABLE 2.2 TYPES OF PATENT STANDARD PATENT

INNOVATION PATENT

20 year monopoly with no extensions (except for certain pharmaceutical inventions)

Eight year monopoly

Popular in industries where inventions are relatively cheap to imitate and maintaining secrecy is either impossible or difficult (eg, pharmaceuticals)

Useful for straightforward innovations that do not satisfy the more stringent test of inventiveness; also useful for inventions not expected to have a long commercial life

Obtaining a standard patent is often a complicated, expensive, and lengthy process due to the examination process

Obtaining an innovation patent is simpler, quicker, and cheaper because a full examination is not carried out before registration

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Chapter 2: Protecting Inventive Ideas

Patents in Practice 2.5 In 2018, almost 30,000 applications for standard patents were lodged at the Patent Office.6 More than 90% were lodged by overseas residents. Medical technology leads the area in which most patent applications were made in 2018 and applications in the fields of biotechnology and pharmaceuticals are also growing. As elsewhere in the world, applications in the field of civil engineering are decreasing. The protection provided by patents is more useful in some industries than in others. For example, chemical and pharmaceutical firms are large users of the patent system, partly because innovations within these industries tend to be relatively cheap to imitate. Firms within these industries see patent registration as an important part of maintaining competitive advantage. The innovation patent was introduced in 2001. Its predecessor, the petty patent system, was not extensively used. The government has accepted the recommendation of the Productivity Commission in its recent Inquiry into Intellectual Property Arrangements to abolish Australia’s innovation patent system on the basis that the majority of intended beneficiaries, small and medium enterprise businesses, do not obtain value from the system and that the costs of the innovation patent regime outweigh any benefits.7 At the time of writing there was a Bill before parliament8 containing provisions to achieve this.

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Standard Patents 2.6 Not all inventions can be patented. They must satisfy the test laid out in s 18(1) of the Patents Act for standard patents or s 18(1A) for innovation patents. Innovation patents are discussed at 2.31. This section discusses the standard patent. The Patents Act provides that an invention is a patentable invention if the invention, so far as claimed in any claim:9 (a) is a manner of manufacture within the meaning of section 6 of the Statute of Monopolies; and (b) when compared with the prior art base as it existed before the priority date of that claim: (i) is novel; and (ii) involves an inventive step; and 6 7 8 9

Australian Intellectual Property Report 2019, available at . Government response: Productivity Commission Inquiry into Intellectual Property Arrangements, August 2017, available at , p 10. Intellectual Property Laws Amendment (Productivity Commission Response Part 2 and Other Measures) Bill 2019. Patents Act 1990 s 18(1) (emphasis added).

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Marketing and the Law (c) is useful; and (d) was not secretly used in the patent area before the priority date of that claim by, or on behalf of, or with the authority of, the patentee or nominated person or the patentee’s or nominated person’s predecessor in title to the invention.

Is the invention a manner of manufacture? 2.7 Mathematical models, plans, or schemes are not patentable; nor are discoveries of pure knowledge. Uncovering the laws of nature is regarded as a discovery, rather than an invention. The first requirement of a patentable invention is that it be a ‘manner of manufacture within the meaning of section 6 of the Statute of Monopolies’. The Statute of Monopolies is a reference to the British Statute of Monopolies 1623, which referred to ‘any manner of new manufacture’. What kinds of invention can be said to be a manner of new manufacture? The phrase is to be given a fairly wide meaning and is by no means limited to what might commonly be understood as a manufacture. ‘A manner of manufacture’ includes any new product or any new process that achieves an economically useful result. National Research Development Corporation v Commissioner of Patents (1959) 102 CLR 252; 1A IPR 63; [1961] RPC 134

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2.7C

Facts: National Research Development Corporation (NRDC) invented a new procedure for applying known chemicals to the soil so as to kill weeds but not the crop. The chemicals, although known to science, were not known to be useful in the eradication of weeds. NRDC applied for a patent for the new process. The Commissioner of Patents objected that the NRDC invention was not a manner of manufacture because: • the invention was neither a new saleable product nor a new process for producing a saleable product; • the invention involved an agricultural process which could not be a manner of manufacture; and • the invention was merely a new use for an existing product. NRDC challenged the decision of the Commissioner. Decision: The High Court rejected the Commissioner’s arguments. Any new process which was capable of achieving an economically useful result in industry, including the agricultural industry, was a manner of manufacture for the purposes of the Patents Act. The NRDC achieved an economically useful result in that it artificially produced land that was free of weeds but with the crop undamaged. A process that achieved this kind of desirable commercial result was just as patentable as a process that produced some physical product. Although the chemicals were not new, the method of applying them to the soil to produce a commercially desirable result meant that there was a patentable process and not just a new use for an existing product.

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Chapter 2: Protecting Inventive Ideas

The National Research Development Corporation case is also the basis for holding that computer software is patentable.10 For example, in CCOM Pty Ltd v Jiejing Pty Ltd11 the Full Federal Court concluded that a method to assemble text in Chinese characters using word processing software was patentable.

A. Business method patents 2.8 To be a manner of manufacture (and therefore patentable), an invention must have a commercial or industrial application, as opposed to a purely artistic one. It must also be something more than a good commercial idea. There must be some connection with product or process development. For example, a bright new marketing idea would not normally be a ‘manner of manufacture’. However, a business system that utilises technology in a new way to achieve an economically desirable outcome may be patentable.12 Welcome Real-Time SA v Catuity Inc (2001) 51 IPR 327; [2001] FCA 445 Facts: Welcome Real-Time SA (Welcome) held a patent for a process or method of using smart cards as part of a customer loyalty program. The smart card enabled the card holder to access many different loyalty programs of different traders as well as different programs offered by the same trader. Each trader’s loyalty program(s) was added to the card the first time the customer used the point of sale terminal at that particular trader’s store. Data relating to the customer’s dealings with each trader was stored separately. The card was dynamic in that rewards (for example, discounts) earned with any particular trader were available immediately at the trader’s retail outlet.

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Catuity introduced a similar smart card system (CiT Transcard system) for use on buses and cabs and at retailers in Sydney. Welcome alleged infringement of its patent. Catuity denied infringement, and argued that the Welcome patent should be revoked, partly because it was not a manner of manufacture within the meaning of s 18 of the Patents Act. Decision: The Welcome patent was valid. In the opinion of Heerey J it produced an ‘artificial state of affairs’ and was ‘beneficial in a field of economic endeavour — namely retail trading — because it enables many traders (including small traders) to use loyalty programs and thereby compete more effectively for business. Such competition is in turn beneficial to consumers …’. This was a ‘physically observable effect’. The Catuity system infringed Welcome’s patent. The court granted an injunction and ordered an account of profits, but refused to make an order to deliver up the offending material because the material had other uses which were lawful.13

10 See International Business Machines Corp v Smith, Commissioner of Patents (1992) 105 ALR 388; 22 IPR 417. Original software is also protected by the provisions of the Copyright Act 1968: see Chapter 4. 11 (1994) 122 ALR 417; 28 IPR 48. 12 See Advisory Council on Intellectual Property, Report on a Review of the Patenting of Business Systems, Canberra, 2003. 13 (2001) AIPC 91-736; [2001] FCA 785 at 785.

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2.8C1

Marketing and the Law

The Patents Office rejected a patent application for a method for determining the pay-out figure for a ‘reverse mortgage’ where an aged person part-sells an interest in their home in return for a cash deposit. The Deputy Commissioner held that, to be a manner of manufacture, a new idea requires at least some material application of science or technology: Re Peter Szabo and Associates Pty Ltd.14 In Grant v Commissioner of Patents,15 Branson J held that a scheme for structuring a financial transaction (by use of a trust) so as to protect an individual’s assets (‘presumably against the lawful claims of the individual’s creditors’) was not a manner of manufacture. There needed to be an observable effect. The court said:16 It has long been accepted that ‘intellectual information’, a mathematical algorithm, mere working directions and a scheme without effect are not patentable. [Grant’s] claim is ‘intellectual information’, mere working directions and a scheme. It is necessary that there be some ‘useful product’, some physical phenomenon or effect resulting from the working of a method …

Research Affiliates LLC v Commissioner of Patents (2014) 316 ALR 135; 109 IPR 364; [2014] FCAFC 150 2.8C2

Facts: Research Affiliates was the owner of patent applications for a method for computerimplemented ‘passive and enhanced indexing categories of portfolio management’. The applications were rejected by the Commissioner of Patents on the grounds that the claims were not for a manner of manufacture. Research Affiliates appealed to the Federal Court. The primary judge dismissed the appeal. Research Affiliates was granted leave to appeal to the Full Federal Court.

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The issue was whether the invention was a manner of manufacture and therefore a patentable invention within the meaning of s 18 of the Patents Act. The question the Full Court had to determine was whether computer implementation of a business scheme (where the business scheme itself is unpatentable because it does not produce an artificial state of affairs) could give rise to a method patent as a result of that computer implementation. Decision: The inventions were not patentable. The specification described the index and the implementation of the scheme. It used a computer to implement that scheme. However, there was no claimed improvement in the computer technology itself. Kenny, Bennett, and Nicholas JJ said, ‘the claimed method in this case clearly involves what may well be an inventive idea but it is an abstract idea (which is therefore unpatentable). The specification makes it apparent that any inventive step arises in the creation of the index as information and as a scheme. There is no suggestion … that any part of the inventive step lies in the computer implementation’. Simply inputting code into a computer will not create an artificially created state of affairs. The appeal was dismissed.

14 (2005) 66 IPR 370; [2005] APO 24. 15 (2005) 67 IPR 1; [2005] FCA 1100. 16 A similar approach has now been taken in the US: see Bilski v Kappos 130 S Ct 3218 (2010), in which a method for hedging risks in commodities trading was rejected, but a majority agreed that in some circumstances business methods may be patentable.

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Chapter 2: Protecting Inventive Ideas

This case shows that mere computerisation of a business process will not make it a patentable invention. But as the Catuity case at 2.8C1 shows, this does not mean that a computer implemented business method is not patentable per se.

B. Product improvements 2.9 If the alleged invention is purely a new use for an existing product (for example, directions on how to use an existing product), it will not be patentable. This was made clear by the High Court in Commissioner of Patents v Microcell Ltd17 and more recently in NV Philips Gmb v Mirabella International.18 However, the invention of a new process which utilises existing products, as in National Research Development Corporation v Commissioner of Patents,19 is potentially patentable. This distinction can often be a fine one. The distinction has recently been an issue in what is colloquially called ‘evergreening’ of pharmaceutical patents. Evergreening occurs where the patent holder attempts to extend the life of a pharmaceutical patent by claiming a monopoly for new methods of administering the pharmaceutical. Thus, in Arrow Pharmaceuticals Ltd v Merck & Co Inc,20 the court ordered revocation of a pharmaceutical patent that amounted in reality to new directions for use, rather than a new invention. In contrast, in Bristol-Myers Squibb Co v F H Faulding & Co Ltd,21 the patent for administering a drug was revoked, but not because it was not a manner of manufacture.

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C. Methods for treating the human body 2.10 Human beings and the biological processes for their generation cannot be patented: Patents Act s 18(2). According to the Patent Office Manual, this includes foetuses and fertilised ova, methods of in vitro fertilisation, methods to clone human beings, and ‘processes beginning with fertilisation and ending with birth, which are wholly biological, and result in a human being’. However, methods of treating the human body are generally patentable, provided they satisfy the usual tests including ‘manner of manufacture’: Anaesthetic Supplies Pty Ltd v Rescare Ltd22 and Bristol-Myers Squibb Co v F H Faulding & Co Ltd.23 There was some doubt about this in Australia, particularly since some other jurisdictions have specifically excluded methods for the treatment of humans from patentability.24 The High Court had the opportunity to settle the matter in 2013. 17 18 19 20 21 22 23 24

(1959) 102 CLR 232; 1A IPR 52. (1995) 183 CLR 655; 132 ALR 117; 70 ALJR 13. (1959) 102 CLR 252; 1A IPR 63; [1961] RPC 134, see 2.7C. (2004) 213 ALR 182; 63 IPR 85; [2004] FCA 1282. (2000) 170 ALR 439; 46 IPR 553; [2000] FCA 316, see also 2.51C1. (1994) 122 ALR 141; 28 IPR 383, see 2.28C. (2000) 170 ALR 439; 46 IPR 553; [2000] FCA 316, see also 2.51C1. TRIPS Agreement art 27(3)(a). See, for example, Patents Act 1977 (UK) s 4(2).

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Apotex Pty Ltd v Sanofi-Aventis Australia Pty Ltd (2013) 304 ALR 1; 103 IPR 217; [2013] HCA 50 2.10C

Facts: Sanofi-Aventis is the registered owner of an Australian patent for a ‘method of preventing or treating a skin disorder … psoriasis, which comprises administering … [the compound Leflunomide]’. The priority date of the patent was March 1993. Sanofi-Aventis supplied Leflunomide in Australia under the brands ‘Arava’ and ‘Arabloc’. Apotex commenced preparations to supply generic versions of Leflunomide in 2008 as a treatment for psoriatic arthritis and rheumatoid arthritis. Sanofi-Aventis initiated proceedings alleging that Apotex’s supply of Leflunomide for the treatment of psoriatic arthritis would infringe its patent. Apotex cross-claimed for revocation of the patent, alleging that the invention was not a manner of manufacture. The primary judge dismissed the cross-claim. Apotex appealed to the Full Federal Court, The appeal was dismissed. Apotex was granted special leave to appeal to the High Court on the single ground of patent validity. The question was asked: is a method of medical treatment of human beings patentable subject matter? Decision: The patent was valid. A method for medical treatment of the human body which is a novel and inventive contribution to a useful art having economic utility, can be a manner of manufacture and therefore a patentable invention as defined in s 18 of the Patents Act. The High Court noted that, unlike some other jurisdictions, the Australian parliament had not excluded methods of medical treatment from patentability. While there are public policy arguments on whether such an exclusion might be appropriate, this is a difficult issue and how to resolve the debate is ‘best left to the legislature’.25 The High Court was not prepared to imply such an exclusion.

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With respect to infringement, although exploitation of Leflunomide for the treatment of psoriatic arthritis did not fall within the claim of the patent, it was infringement to supply a product which the supplier had reason to believe would be used for psoriasis which was covered by the patent claim.26

While the generation of human life is expressly excluded by the Patents Act, or indirectly excluded as contrary to law,27 other life forms are not excluded. Consequently, inventions that involve biological products and processes, and living organisms (other than human beings) are patentable.28 The same rules apply as for all inventions. New plant varieties may be patented as well as obtain registration under the Plant Breeder’s Rights Act 1994.

25 Apotex Pty Ltd v Sanofi-Aventis Australia Pty Ltd [2013] HCA 50 at [50]. 26 See 2.51. 27 A patent application can be rejected if its use would be contrary to law: Patents Act 1990 s 50(a). See, for example, Re Hwang [2004] APO 24, where an application for producing a human embryo was contrary to s 20 of the Prohibition of Human Cloning Act 2002 (Cth). 28 See also the Gene Technology Act 2000, which provides a regulatory scheme for the use of genetically modified organisms.

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D. Genes 2.11 It is possible to patent synthetically produced human DNA and human genetic material (genes and gene sequences), provided it is given a definite commercial use.29 On the whole, Australia takes a more permissive approach to biotechnology patenting than the European Union. This is a controversial area30 and has been vigorously challenged in both the US and Australia. In 2013, the US Supreme Court declared a number of patents held by Myriad Genetics relating to breast cancer gene mutations invalid,31 because the genes described in the patents and developed in the laboratory were in exactly the same form or sequence as they appeared in nature. Therefore, the patent related to a discovery of a law of nature, not to an invention merely because the DNA segment was isolated. In Australia, the High Court decision based on the equivalent Australian patent reached the same conclusion that the patent was invalid. D’Arcy v Myriad Genetics Inc (2015) 258 CLR 334; 115 IPR 1; [2015] HCA 35

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Facts: Myriad Genetics is the owner of an Australian patent for methods and materials used to isolate a breast and ovarian cancer susceptibility gene (BRCA1) and its use of the gene in screening methods for detecting a predisposition to these types of cancer. Cancer Voices Australia is an independent volunteer organisation for Australians affected by cancer. Cancer Voices and D’Arcy, a Brisbane woman who was treated for breast cancer, commenced a Federal Court action seeking to declare the patent invalid on the grounds that it did not satisfy the requirement that an invention be a new manner of manufacture. It was alleged that the patent claims were not materially different to the nucleic acid that occurs in nature. Myriad Genetics argued that it was patentable subject matter because it was an artificial state of affairs, was new, useful, and of economic significance. At first instance, Nicholas J found that, while naturally occurring DNA is not patentable, isolated genetic material may be. D’Arcy appealed to the Full Court. The Full Court found the patent valid on the basis that the isolation of the nucleic acid resulted in an artificially created state of affairs. The claims went beyond mere isolation. The claims defined specific mutations and indicated a predisposition to breast and ovarian cancer. D’Arcy appealed to the High Court. Decision: The patent was invalid. It did not concern a manner of manufacture. The information contained in the isolated gene was that same as that occurring naturally in the human body. In that sense, the information is not ‘made’ or artificially created as is required for something to be a manner of manufacture.

Subsequent to the High Court decision in Myriad Genetics, the Federal Court held that claims defining practical applications of gene sequences, including methods

29 Kirin-Amgen Inc v Board of Regents of University of Washington (1995) 33 IPR 557; (1996) AIPC 91-231. 30 See, for example, Australian Law Reform Commission, Gene Patenting and Human Health, Discussion Paper, 2004; Senate Standing Committee on Community Affairs, Inquiry into Gene Patents, Canberra, 2010. 31 Association of Molecular Pathology v Myriad Genetics Inc 569 US 12-398 (2013).

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2.11C

Marketing and the Law

of genetic screening in cows, disclosed patentable subject matter.32 In so deciding, Beach J noted that unlike the claims at issue in the Myriad Genetics case which the High Court found to be directed to purely genetic information, the claims of patent before him ‘are directed to methods and other embodiments involving the practical application of the identification of SNPs from a nucleic acid sample of the bovine subject and their association with a trait of interest. So, the claims are directed to artificial subject matter being the result of human action, rather than something that exists in nature per se.’33

E. Non-patentable inventions 2.12 The courts have the power to reject a patent on the grounds that it would be generally inconvenient. This was used in Rolls-Royce Ltd’s Application34 to reject a patent for a new take-off procedure used by jet aircraft to reduce noise at ground level. If a patent had been granted, it would have placed an intolerable burden on airport landing procedures.

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Is the invention novel? 2.13 The second requirement for a patentable invention is that the invention is novel. All patent applications are assessed for novelty against ‘the prior art base as it existed before the priority date’: Patents Act s 18(1)(b). Broadly speaking, the prior art base includes all information that is in the public domain, whether in Australia or overseas. The priority date is the date upon which the document specifying the invention (called the ‘specification’) is lodged with the Patent Office. The effect of this is that, if each and every essential feature of the invention was known publicly or was accessible to the public prior to the priority date, the invention is said to have been anticipated (ie, lack novelty). In order to determine whether the essential feature or features of the invention are novel — that is, not available to the public prior to the priority date of the patent — the courts apply the ‘reverse infringement test’. This is done by asking whether the alleged anticipation would, if the patent were valid, constitute an infringement: Meyers Taylor Pty Ltd v Vicarr Industries Ltd.35 For example, take the situation where it is argued that a patent is not novel because it was anticipated by a product already on the market. In order to succeed with this argument, it must be shown that the product was on the market prior to the priority date and that it disclosed all the essential features of the patent. The reverse infringement test requires the courts to imagine that the patent pre-dated the product and to ask whether the product infringed the patent. If the answer is yes, then the patent is not novel. 32 33 34 35

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Meat & Livestock Australia Ltd v Cargill, Inc [2018] FCA 51; (2018) 354 ALR 95; 129 IPR 278. Meat & Livestock Australia Ltd v Cargill, Inc [2018] FCA 51; (2018) 354 ALR 95; 129 IPR 278 at 453. [1963] RPC 251. (1977) 137 CLR 228.

Chapter 2: Protecting Inventive Ideas

An invention will not satisfy the requirement of novelty if, before the priority date, the invention had been disclosed: • in a prior patent application anywhere; or • in a document available to the public anywhere; or • by some act occurring anywhere.

A. Disclosure in a prior patent application 2.14 An earlier patent application will destroy novelty, even if that earlier application was made only minutes before the subject application. The reason for this is that all prior patent applications are part of the universal prior art base. It is irrelevant that the patent may be in another country or a foreign language: Dennison Manufacturing Co v Monarch Marketing Systems Inc.36

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B. Disclosure in a public document 2.15 An invention will lack novelty if, prior to the priority date, the invention has been published or revealed in a document (including electronic databases) anywhere in the world. It is irrelevant that the document was in a foreign language, understandable only to a few, in an obscure publication, or largely unread: Sunbeam Corp v Morphy-Richards (Aust) Pty Ltd.37 An invention has been published (and, therefore, lacks novelty) if it has been published in such a way and in such circumstances that a skilled person would at once understand and be capable of putting the invention into operation without further enquiry or experiment. Even publishing a photograph of the invention may destroy novelty if it is sufficiently detailed: see Windsurfing International Inc v Petit.38 A document published confidentially is not a public document: see Griffin v Isaacs.39 If the invention can only be understood by putting together a number of related documents, novelty will not be lost unless a person skilled in the area of expertise covered by the invention would treat the documents as a single source: Patents Act s 7(1)(b). For example, if two documents were cross-referenced, this may make them a single source.

C. Disclosure by doing an act 2.16 An invention will lack novelty if, prior to the priority date, the invention (that is, the essential features of the invention) has been made available to the public by some act or series of acts. In certain limited circumstances, however, the inventor is given extra time to register the patent: see 2.17. 36 37 38 39

(1983) 66 ALR 265; 1 IPR 431. (1961) 180 CLR 98; 1B IPR 625. [1984] 2 NSWLR 196, see 2.16C1. (1938) 12 ALJR 169; 1B IPR 619.

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Acts that will amount to public use and therefore destroy novelty include: • any sale or offer to sell the invention by anyone anywhere — thus, for example, even one sale or offer to sell by the inventor will destroy novelty unless the purchaser or prospective purchaser was under an obligation to keep the invention secret; • any use of the invention in public by anyone anywhere: see Windsurfing International Inc v Petit;40 Insta Image Pty Ltd v KD Kanopy Australasia Pty Ltd41 (use of a collapsible canopy at motocross meetings prior to the priority date destroyed novelty in a patent based on the collapsible canopy); • any explanation or demonstration of the invention to a public forum, such as a trade fair or an industry seminar; • an explanation or demonstration of the invention to even one person, unless that person was under an obligation to keep the invention secret: see Fomento Industrial SA & Biro Swan Ltd v Mentmore Manufacturing Co Ltd;42 and • making a gift of the invention, unless the person receiving the gift was under a duty not to disclose or publicly use the invention. Windsurfing International Inc v Petit [1984] 2 NSWLR 196

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2.16C1

Facts: Windsurfing International was the holder of an Australian patent for a ‘wind propelled apparatus’ (a sailboard or windsurfer), with a priority date of the patent of March 1968. The patent was a combination patent; that is, a combination of known integers being a surfboard, skeg, retractable fin, mast, triangular sail, wishbone boom, and universal-type joint. Petit imported sailboards and sold them in Australia. Windsurfer International alleged that its patent rights had been infringed. Petit denied any infringement and cross-claimed for revocation of the patent on a number of grounds including lack of novelty. Petit argued the claim for lack of novelty on two grounds: first, prior publication in a newspaper article (including a picture) in 1965 entitled ‘Sailboarding: Exciting New Water Sport’; and second, prior use by various persons including a person who had experimented with hand-held sails attached to canoes when he was a teenager in the 1940s. Decision: The patent was revoked for lack of novelty. The invention had been anticipated by the newspaper article. Although the sailboard described and pictured in the 1965 article was clearly inferior to the Windsurfer patent, it detailed the essential inventive step of the plaintiff’s patent, namely ‘the free-sail concept which is the essential difference between the patent and conventional vehicles propelled by sail which have a fixed rig’ (that is, yachts). All the improvements contained in the Windsurfer patent would have been obvious to any hypothetical skilled person reading the article. Therefore, the article amounted to prior publication. The invention had also been anticipated by the 1940s experiment with hand-held sails on a canoe. Although quite crude compared with the patented windsurfer, again it did incorporate the essential inventive step. The judge commented that allegations of prior public use must be strictly proved. 40 [1984] 2 NSWLR 196, see 2.16C1. 41 (2008) 78 IPR 20; [2008] FCAFC 139. 42 [1956] RPC 87, see 2.16C2.

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Fomento Industrial SA & Biro Swan Ltd v Mentmore Manufacturing Co Ltd [1956] RPC 87 Facts: Fomento was the holder of a patent for an improved ball-point pen. Mentmore copied the invention without permission and Fomento sued for infringement. In its defence, Mentmore claimed that the patent should be revoked because it lacked novelty. According to Mentmore, the invention lacked novelty because, prior to lodging an application for registration, Fomento had given one of the pens to a member of a government department without any requirement that the invention be kept confidential. Decision: The court held that the gift was sufficient to destroy novelty. If the invention is provided to a member of the public in such a way that he or she is free in law to do what they want with the invention, then the invention has been disclosed to the public and is no longer novel. The patent was revoked.

Thus, if the invention is to be disclosed or displayed to a person or group of persons, the inventor must insist on confidentiality. While the courts may imply a duty of confidentiality in appropriate circumstances, it is dangerous to rely on this. In fact, not only should the inventor get an express acknowledgement of confidentiality, it should be in writing, signed by the recipient, and kept so that it can be produced if challenged.

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D. Exceptions to the strict rules of non-disclosure or use — grace periods 2.17 The rule against public disclosure was considered to be a little extreme. Therefore, the Patents Act was amended to allow for certain exceptions: Patents Act s 24. Thus, novelty will not be lost where the invention (or other information made publicly available which might destroy novelty or inventive step) is made publicly available: • to the public without the consent of the patentee by a person who obtained the invention from the patentee; • in the circumstances prescribed in the Patent Regulations, in both of these cases the disclosure must be followed up with a patent application, within a set period, generally within 12 months of the disclosure; or • to certain public authorities. The circumstances set out in the Patent Regulations 1991 include:43 • publication or use of the invention within 12 months before the filing date of the complete application (this allows the applicant 12 months after disclosure to lodge an application); • showing or use at a recognised exhibition; • publication in a paper by a learned society; and

43 Regs 2.2–2.2D.

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• working the invention in public within the period of 12 months before the priority date of a claim for the invention: – for the purposes of reasonable trial; and – if, because of the nature of the invention, it is reasonably necessary for the working to be in public. ‘Reasonable trial’ means trial for the purposes of developing the product and not trial for the purposes of test marketing. What is reasonable will depend on the circumstances, including the nature of the invention. There are a number of reasons why a general grace period may not be as attractive as it appears. First, the grace period does not operate against independent invention by another person. Second, any person who makes use of information publicly disclosed before the priority date has a prior user defence under s 119 of the Patents Act. Third, the grace period does not apply to commercial usage. Fourth, grace periods are not universally available; for example, prior use could destroy any chance of having a patent accepted in Europe. The United States, Canada, and Japan, on the other hand, also allow for grace periods.

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Does the invention contain an inventive step? 2.18 The third requirement of a patentable invention is that it contains an inventive step. An invention which lacks an inventive step is said to be obvious. A patentable invention must expand the base of knowledge existing immediately prior to the time of the invention — ‘the prior art base’ — in a manner that goes beyond a mere technical innovation, workshop improvement, or obvious extension. Many innovative features will fail this test despite otherwise possessing commercial value. For this reason the innovation patent was introduced: see 2.31. Although a patentable product or process must contain an inventive step, it does not have to be an entirely original product or process. This would be completely impractical. Most inventions are built upon a base of knowledge which may itself have been the subject of a patent or patents. AstraZeneca AB v Apotex Pty Ltd (2015) 257 CLR 356; 114 IPR 445; [2015] HCA 30 2.18C

Facts: AstraZeneca owned patents for the use of rosuvastatin for the treatment of high cholesterol (marketed as ‘Crestor’). Apotex is a general pharmaceutical company wishing to sell rosuvastatin in Australia. AstraZeneca sought relief against infringement and Apotex sought revocation of the patents. The primary judge found that the patents were invalid. AstraZeneca appealed to the Full Court which dismissed the appeal on the basis that rosuvastatin was known in the prior art. The Full Court found that it would be obvious to treat high cholesterol with the dosage claimed in the patent and that the invention therefore did not involve an inventive step. AstraZeneca then appealed to the High Court. Decision: The appeal was dismissed. Inventiveness must be assessed in light of the common general knowledge of the hypothetical person skilled in the relevant art and imbued with the knowledge of the universal prior art base. The information contained in the specification

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Chapter 2: Protecting Inventive Ideas and the description of the problem in the specification is not necessarily part of the common general knowledge before the priority date. As a consequence, assessing inventive step by starting with the problem, where the problem is not part of the common general knowledge or prior art base, is not correct. On the facts of the case, the High Court agreed with the Full Court below that the claimed invention lacked inventive step in light of what was commonly known prior to the date of the patent, considered with either of two prior art documents. The High Court found that the skilled person would have been led directly as a matter of course to try rosuvastatin in the expectation that it might be a useful treatment for high cholesterol. This, combined with the fact that it would have been a routine step for a person skilled in the area of treating high cholesterol to test rosuvastatin in the dosage claimed in the patent, meant that the claimed invention did not involve an inventive step.

A. The non-inventive skilled person test

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2.19 If the claimed invention is obvious to the skilled person based on what is publicly available, it will not involve an inventive step and will not qualify for patent protection: see Pfizer Ltd’s Patent.44 Determining whether an invention contains an inventive step usually requires a great deal of expertise (normally in the form of expert evidence). The test applied by the courts is to ask whether a non-inventive person skilled in the relevant art would regard the invention as obvious: Minnesota Mining & Manufacturing Co v Beiersdorf (Australia) Ltd.45 If the hypothetical non-inventive, skilled person would have solved the problem that the invention supposedly solves by following the same course as the inventor as a matter of routine, then the invention is obvious.46 The test is often difficult to apply and will depend very heavily on the facts of each individual case. In applying this test, one must be careful not to fall into ‘the trap of hindsight’. Many inventive ideas look obvious once they have been revealed. Aktiebolaget Hassle v Alphapharm Pty Ltd (2002) 212 CLR 411; 194 ALR 485; [2002] HCA 59 Facts: Omeprazole is a drug useful in the treatment of gastric and duodenal ulcers. However, it has problems with storage and administration. After considerable trial and error, Aktiebolaget Hassle (Astra) discovered a method of combining two other ingredients with omeprazole in a capsule or tablet to make for a more effective product. Essentially, Astra coated the omeprazole with two other ingredients. The Astra capsule could then be stored for longer periods and was more effective in delivering the omeprazole to the required area of the intestine. Astra took

44 [2001] FSR 16. 45 (1980) 144 CLR 253; 29 ALR 29; 1A IPR 231, see 2.21C1. 46 The Patents Act 1990 s 7(2) states, ‘For the purposes of this Act, an invention is to be taken to involve an inventive step when compared with the prior art base unless the invention would have been obvious to a person skilled in the relevant art in the light of common general knowledge as it existed in the patent area before the priority date of the relevant claim whether that knowledge is considered separately or together with the information mentioned in subsection (3).’

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Marketing and the Law out a patent over the new product. This is a combination patent in that it combines known integers in a new way of producing a desired outcome. Alphapharm is a generic drug manufacturer. It threatened to import a drug similar to Astra’s patented drug. Astra sought an order for infringement. Alphapharm cross-claimed for revocation of Astra’s patent on the basis that it was obvious. The Federal Court agreed that the invention was obvious. Although it required trial and error to get the combination correct, ‘each of the integers was at least worthwhile trying; therefore the combination itself was “obvious”.’ Astra appealed to the High Court. Decision: The appeal was allowed. The High Court warned against ‘the seduction of hindsight’. The Federal Court approached the issue of obviousness in the wrong way. It was not appropriate to start with the end product and then to conclude that all integers which were ‘worthwhile trying’ in an attempt to achieve this end were obvious. The combination of integers was not obvious, although individually each may have been ‘worth a try’.

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B. Describing the non-inventive skilled person 2.20 What type of person is a non-inventive, skilled person? To begin with, he or she is skilled in the art or science to which the invention is relevant. He or she is aware of the state of common general knowledge in that particular field immediately prior to the invention. This standard was previously limited to knowledge in the field in Australia, but the common general knowledge is now assessed on a global basis.47 This position is consistent with other jurisdictions, such as the US and Europe. Common general knowledge is the background knowledge and experience which is known or used by those in the relevant trade. The non-inventive, skilled person is also aware of all relevant public documents and public acts, including dictionaries, manuals, and periodicals in the relevant field. An inventor may never look at any prior art, but he or she is to be treated as if he or she had done so. The prior art base for assessing the inventive step requirement for a standard patent has some overlap with that used for the purposes of novelty.48 Sources of prior art can also be combined, provided this would be obvious to the skilled person. Although the person is non-inventive, he or she is skilled and should be understood to make routine developments. Nor is he or she likely to be working alone. Increasingly under modern industrial conditions the inventor is part of a large knowledgeable team.

C. Factors relevant to assessing inventiveness 2.21 Because the concept of inventiveness is inherently elusive, the courts often look for pointers which might indicate that an inventive step has occurred. Factors 47 Intellectual Property Laws Amendment (Raising the Bar) Act 2012 which came into full effect on 15 April 2013. 48 Patents Act 1990 s 7.

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often considered relevant in determining whether the invention contains an inventive step are: • whether the invention has satisfied some ‘long felt want’, in that it provides a solution for an existing problem; • whether the problem has awaited solution for many years; • whether the invention was a commercial success: Elconnex Pty Ltd v Gerard Industries Pty Ltd;49 and • whether others have tried to copy the invention. If an invention satisfies these factors, it may be considered inventive. On the other hand, if it fails to satisfy the tests, it possibly lacks the necessary quality of inventiveness. However, it should be remembered that these factors are just guides to aid in the application of the general test. Minnesota Mining & Manufacturing Co v Beiersdorf (Australia) Ltd (1980) 144 CLR 253; 29 ALR 29; 1A IPR 231 Facts: Minnesota Mining & Manufacturing Co (MMM, the plaintiff) was the holder of a patent for a ‘breathable’ adhesive surgical tape. It was a combination patent, in that it was a new combination of known integers to produce a commercially desirable result. Beiersdorf produced a product that was similar to the plaintiff’s product in most respects. MMM sued for patent infringement. Beiersdorf countered by arguing that the plaintiff’s invention should not have been registered because it was obvious (ie, it lacked an inventive step).

2.21C1

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Decision: MMM’s patent was valid. The evidence showed that there had existed for some time a demand for ‘breathable’ adhesive surgical tape. The demand had not been satisfied by any product on the market. Medical journals and other publications had not suggested any solution. MMM’s product solved the problem and was eventually a commercial success. Although these factors do not in themselves prove inventiveness, they led inescapably in this case to the conclusion that MMM’s product was inventive. Beiersdorf’s product infringed MMM’s patent.

Lockwood Security Products Pty Ltd v Doric Products Pty Ltd (2007) 235 CLR 173; 235 ALR 202; 72 IPR 447; [2007] HCA 21 Facts: Existing deadlocks were a danger because of the need to use a key to unlock the door from the inside once the deadlock had been set. If the key was misplaced, the occupants could be trapped on the inside. Lockwood developed a new type of deadlock that overcame this problem and took out a patent. The patent was for a new combination of known integers: the existing Lockwood deadlock plus a release mechanism by which a key used on the outside lock deactivates the inside handle lock. This type of release mechanism had been used in certain storeroom locks before, but not in combination with a deadlock. Doric produced a lock based on a similar idea to the Lockwood patent. Lockwood claimed patent infringement. Doric cross-claimed to have the patent revoked on the basis of a variety

49 (1993) 25 IPR 173; [1992] FCA 556.

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Marketing and the Law of claims, including that the patent was not inventive (ie, it was obvious). The Federal Court agreed with Doric, and Lockwood appealed to the High Court. Decision: The High Court held that the patent was inventive. Care must be taken not to fall into the hindsight trap. The question is whether a skilled person would have regarded the idea at the time to be both technically possible and also practical. The court regarded the following factors as important in deciding that the invention was inventive: Lockwood’s invention solved a well-known and long-standing problem; others (including the other experts in the case) had tried and failed to solve the problem; the Lockwood invention was a commercial success; and Doric had sought to copy the invention.

By way of contrast, the invention of a sausage machine which combined the functions of mincing and filling (formerly these processes had been fulfilled by two separate machines), though useful, was held not to be sufficiently inventive, since it did not overcome any particular existing difficulty.50

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Is the invention useful? 2.22 The fourth requirement of a patentable invention is that it be useful: Patents Act s 18(1)(c). This means that an invention must do what its inventor claims it will do. When the specification is lodged, the applicant must also lodge a statement of claim or claims which define the invention. The invention is useful if the claim or claims made in the patent application can be achieved by following the instructions in the specification: see Windsurfing International Inc v Petit.51 For example, if an applicant obtains a patent for a new type of car and the car is incapable of selfpropulsion, the patent would be invalid on the grounds of inutility. An invention will not be considered useful unless it discloses a ‘specific, substantial and credible use’: Patents Act s 7A. While lack of utility can be raised as a ground of invalidity during examination, opposition, or revocation, it should be noted that it is not the responsibility of the Patent Office to test whether an invention works.

Has an invention been secretly used? 2.23 The final requirement for a patentable invention is that it was not secretly used before the application for the patent was lodged by or with the authority of the patentee. To permit secret use prior to the priority date would be contrary to the rationale of the Patents Act, in that the inventor would obtain a period of monopoly greater than 20 years. Secret use means a use that is unknown to the public and not discoverable by the public; for example, where the invention is a secret process used to produce products for sale. In such circumstances there is no reason why the 50 Williams v Nye (1890) 7 RPC 62. 51 [1984] 2 NSWLR 196, see 2.16C1.

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inventive element would become publicly known unless disclosed by the inventor. This distinguishes ‘secret use’ from anticipation (lack of novelty) which involves public use. Where the invention is revealed to a limited number of persons under the cloak of confidentiality, the issue will be one of potential secret use, not anticipation. Whether any activity amounts to ‘use’ depends on whether, in a practical sense, what occurred ‘amounted to a de facto extension of the patent term’: see Azuko Pty Ltd v Old Digger Pty Ltd.52 Thus, receiving orders and using the invention to manufacture products may or may not amount to ‘use’, depending on the circumstances. Contrast: Re Wheatley’s Patent Application (1984) 2 IPR 450 Facts: Wheatley developed a new kind of pull key to stop conveyor belts in coal pits. The invention was demonstrated to a member of the National Coal Board for the purpose of inducing orders. The National Coal Board member was required to acknowledge that the invention was secret. The National Coal Board was so impressed that it ordered 10 pull keys. Wheatley accepted the order and manufactured the keys. On the same day as the keys were delivered to the Coal Board, an application for patent registration was lodged at the Patent Office. The application was opposed on the grounds of prior use. The critical issue was the meaning of ‘use’.

2.23C1

Decision: The English Court of Appeal held that Wheatley, by soliciting sales orders and then manufacturing products to satisfy those orders before the patent application, had dealt commercially in the invention. This amounted to prior ‘use’. The patent was refused.

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Azuko Pty Ltd v Old Digger Pty Ltd (2001) 52 IPR 75; [2001] FCA 1079 Facts: Old Digger held the patent for a type of drill used in mining exploration. Some of Old Digger’s former employees set up a company called Azuko and commenced to manufacture a drill similar to Old Digger’s patented drill. Old Digger sued for infringement. Azuko denied infringement and cross-claimed for revocation of the patent on the basis of secret use. The secret use allegedly occurred in the following manner: of necessity, the drill was tested at a mine owned by a friend of the inventor; the mine owner, who was under an obligation of confidence, was impressed with the drill and told the inventor that he would be interested in purchasing a number of drills; subsequently, he placed an order with the inventor for six of the drills. The inventor did not solicit the order. Nor was the order filled until after the patent application was made. However, prior to the priority date, the inventor did make about 20 of the drills. Old Digger was successful at trial and Azuko appealed. Decision: Azuko had infringed Old Digger’s patent. By a majority, the claim for revocation was dismissed. Merely receiving a few unsolicited orders did not amount to ‘use’ for the purposes of s 18(1)(d). Nor in the circumstances did the manufacture of a few of the drills amount to such use because there was no attempt to extend the period of the patent.

52 (2001) 52 IPR 75; [2001] FCA 1079, see 2.23C2.

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Secret use is a ground for revocation of a patent and opposition to the granting of one, and can also be looked at during examination. Secret use for purposes of reasonable testing during the developmental stage is permitted: Patents Act s 9. See Grove Hill Pty Ltd v Great Western Corp Pty Ltd53 and Bradken Resources Pty Ltd v Lynx Engineering Consultants Pty Ltd.54 The grace period can also be used to prevent secret use from invalidating a patent within the 12-month period: Patents Act s 9.55

Applying for a Standard Patent56

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The application 2.24 Patent applications are very much a specialist area and therefore it is essential to get proper advice from a patent attorney. Only the applicant or a patent attorney may prepare the specification. An application for a patent is made to or filed with the Patent Office, which is part of IP Australia, by lodging a complete specification. The complete specification must include: • a full description of the invention such that a person skilled in the relevant area of technology with which the patent is concerned can make the invention; • a statement setting out the ‘best method’ known to the applicant of performing the invention; and • the claim or claims defining the invention: Patents Act s 40(2). The claims must be clear (not ambiguous) and ‘must be supported by matter disclosed in the specification’: Patents Act s 40(3). In other words, the claims must have sufficient unity with what appears in the description of the invention as set out in the specification. The claims are discussed at 2.27. The specification (including the claims) is of extreme importance. It is a public document that ultimately determines the monopoly rights granted to the inventor: see KimberlyClark Australia Pty Ltd v Arico Trading International Pty Ltd.57 Prior to lodging the complete specification, the applicant may lodge a provisional specification, but this is optional. The provisional specification need only describe the invention and is used where an early priority date is required. An early priority date may be required, for example, so that test marketing can be conducted.

53 54 55 56 57

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(2002) 55 IPR 257; [2002] FCAFC 183, see 2.50C. (2012) 97 IPR 424; [2012] FCA 944. Intellectual Property Laws Amendment (Raising the Bar) Act 2012 Sch 6 item 29. The process for an innovation patent is discussed at 2.33. (2001) 207 CLR 1; 177 ALR 460; 50 IPR 513; [2001] HCA 8.

Chapter 2: Protecting Inventive Ideas

The complete specification must be lodged within 12 months of the provisional application. For the provisional priority date to apply to the complete specification, the provisional specification must adequately disclose the invention claimed in the complete specification.

Examination by the Patents Office 2.25 Within 18 months of the application being made, details of the application are published in the Australian Official Journal of Patents. At this point the invention enters the public domain. Competitors are now able to examine the invention for possible weaknesses or ideas. After publication, the specification is examined by a Patent Office examiner, whose task it is to decide such matters as whether the specification fully describes the invention, whether the claims are clear and succinct, and whether the invention is a new and inventive manner of manufacture. Therefore, among other things, the examiner must investigate publicly available information in the relevant field so as to determine novelty and inventiveness. Formerly, the Patent Office gave the benefit of any doubt on the question of inventiveness and novelty to the applicant. This meant that a high percentage of patents were revoked when challenged. This has now been changed. The applicant must now satisfy the Patent Office that the patent is novel and inventive on the balance of probabilities. If the application is not approved, the applicant is given the opportunity for a hearing before the application is rejected. The applicant can choose to challenge the decision in the Federal Court. If the application is accepted, with or without amendments, the acceptance is notified in the Australian Official Journal of Patents.

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Opposing a patent 2.26 After its acceptance has been published, anyone may object to a patent being granted: Patents Act s 59. Third parties have three months58 in which to commence opposition proceedings, which must be based on one or more of the following grounds: • the invention is not a patentable invention (ie, it is not a manner of new manufacture which is both novel and inventive, it is not useful or it has been secretly used); • the applicant is not the inventor; or • the specification does not comply with the statutory requirements. If there are no objections or the Registrar decides any objections in favour of the applicant, the patent will be entered upon the Register of Patents. A certificate of grant (formerly described as letters patent) is then sent to the patentee.

58 Patents Regulations 1991 (Cth) reg 5.4(1).

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Marketing and the Law FIGURE 2.1 THE PATENT PROCEDURE

Application Complete specification

Priority date obtained

Publication in Official Journal

Examination by Patent Office

Patent accepted (with or without amendments)

Acceptance published in Official Journal

No opposition

Patent rejected Decision may be appealed Appeal successful Appeal unsuccessful Opposition proceedings

Patent sealed

Patent rejected

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What are the claims? 2.27 Ultimately it is the claims that determine the width of the monopoly granted to the inventor. If the claims are too wide, they will fail. If they are drafted too narrowly, the inventor’s monopoly will be unnecessarily restricted. The claims must be clear and succinct, supported by what is described in the specification: Patents Act s 40(3). Therefore, great care must be taken in drafting the claims.59

Importance of the priority date 2.28 The ‘priority date’ is important in that the novelty of the invention is judged from that date. Any publication of the invention after that date will be irrelevant for the purposes of the application. The priority date of an application is the date upon which the specification is filed. Thus, it will be the date of filing the complete specification or, if a provisional specification was filed, the date of filing the provisional specification, provided the provisional specification adequately discloses the invention claimed in the complete specification. 59 The rules for interpreting claims were set out in Decor Corporation Pty Ltd v Dart Industries Inc (1988) 13 IPR 385.

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Anaesthetic Supplies Pty Ltd v Rescare Ltd (1994) 122 ALR 141; 28 IPR 383 Facts: In April 1981, Rescare Ltd lodged a provisional specification for an invention said to cure snoring sickness (OSA). In April 1982, Rescare Ltd lodged the complete specification which contained some differences to the provisional specification. Between lodging the provisional specification and the complete specification, an article was published by the inventor in a British medical journal called The Lancet. The article explained the invention and how it worked. The patent was registered but, some years later, Anaesthetic Supplies released a product similar to the Rescare invention in the market. Rescare sued for patent infringement. Anaesthetic Supplies denied any infringement and sought revocation of the Rescare patent on the grounds that: • the Rescare patent was not a manner of manufacture as it involved a method of treating the human body; and • the Rescare patent had been anticipated by The Lancet article. Anaesthetic Supplies argued that Rescare could not rely on the provisional specification as the priority date because the provisional specification did not adequately describe the invention subsequently claimed in the complete specification. Decision: Although it was not necessary to decide the matter, the majority was of the opinion that medical treatments, including this one, were generally patentable.

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The date of lodging the provisional specification will only become the priority date if the provisional specification fairly and adequately discloses the invention claimed in the complete specification. This had not occurred in this case. Therefore, the provisional specification could not be relied upon. The priority date became the date of lodging the complete specification. However, this meant that the invention was not novel by virtue of the inventor’s own revelations in The Lancet. The court ordered that the patent be revoked.

The priority date for a later overseas application will be the earlier Australian date where an Australian applicant lodges the overseas application within 12 months of lodging the Australian application and the overseas country is a signatory of the Paris Convention. The same benefit applies to overseas applicants filing a later Australian application within 12 months of lodging an application in their home jurisdiction.60 The ‘priority date’ is also important because, once the patent is granted, the protection dates back to the priority date. Once the patent is granted, the patentee can bring an action for any infringements that have occurred since the priority date.

Duration of a standard patent 2.29 A standard patent will last for 20 years from the date of the patent (the priority date): Patents Act s 67. Pharmaceutical patents may be extended in certain circumstances. If the patentee fails to pay the required renewal fees, the patent will lapse. 60 See 2.62.

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Patents of addition 2.30 The proprietor of a standard patent may apply for a patent of addition where there have been improvements in, or modifications to, the main invention. The patent of addition lasts only as long as the main patent. Patents of addition do not apply to innovation patents.

Innovation Patents Purpose of the innovation patent 2.31 In 2001 Australia introduced the innovation patent to protect inventions that do not meet the inventive threshold required for standard patents. The innovation patent was designed to protect small or incremental advances to existing devices, substances, methods, or processes. The requirements for an innovation patent are the same as for a standard patent, except that innovation patents do not require an inventive step: Patents Act s 18(1A). Instead, an innovation patent must involve an innovative step when compared with the prior art base: Patents Act s 18(1A)(b)(ii). Otherwise the innovation patent must be a manner of manufacture, new, useful, and not secretly used. Plants and animals, and the biological processes for their generation (other than a microbiological process) are not patentable under the innovation patent system.

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What is an innovative step? 2.32 An invention is taken to involve an innovative step unless the invention varies from the prior art base in ways that make no substantial contribution to the working of the invention: Patents Act s 7(4). This is judged by the standard of a person skilled in the relevant art, in the light of common general knowledge and the prior art base immediately before the priority date. The onus of proving lack of an innovative step rests on the person challenging the patent. Thus, an invention involves an innovative step unless a person skilled in the relevant art would conclude: • that there is no difference between the so-called invention and existing technology; or • even if the invention does differ in some way from existing technology, the differences do not make any real contribution to the working of the invention.

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Dura-Post (Aust) Pty Ltd v Delnorth Pty Ltd (2009) 81 IPR 480; [2009] FCAFC 81 Facts: Delnorth had an innovation patent for roadside posts made of sheet spring steel. The posts, which were to be used on the edge or shoulder of roadways to delineate lanes and direct traffic, were designed to bend under pressure and then return to their starting point. The patent claims referred to a number of other features of the invention, such as a marker hole (to indicate how far to drive the post into the ground), a barb (to hold it firm), and a tapered end (to make it easier to drive the post into the ground to the correct depth). Delnorth sued DuraPost for infringement. Dura-Post counterclaimed that the Delnorth patent was invalid on the basis of two prior US patents. Delnorth’s patent claims differed from the US patents in respect of the other features described above.

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Decision: The court said that the test for innovativeness ‘requires a narrow comparison between the invention as claimed and the relevant prior disclosure, having regard to the fact that the threshold for an innovation patent is intended to be lower than for a standard patent’. There were a number of features of the Delnorth patent which made it different to the US patents. These differences contributed in a real way to the working of the Delnorth patent. Therefore, the Delnorth patent was innovative.61

In Product Management Group Pty Ltd v Blue Gentian LLC,62 Product Management Group (PMG) was sued for allegedly infringing two innovation patents which claimed an expandable garden hose which expanded in length when the tap to which it was affixed was turned on. The kink free hose claimed in the patents had an elastic inner tube that expanded with the pressure of water from a tap until the expansion reached the length and diameter limits of the outer inelastic tube. PMG in response argued that the Blue Gentian garden hose patents were invalid, including because they did not involve an innovative step. Blue Gentian won the case and PMG appealed to the Full Court which stated that ‘[t]he perceived advantages of garden hoses made in accordance with the Patents are that they have the ability to expand their length when in use without bursting, they are lightweight and easy and convenient to pack, transport and store, and do not kink in use’.63 The Full Federal Court affirmed the decision of the trial judge that the patents were valid and had been infringed by PMG.64

Innovation patent process 2.33 The procedure for obtaining registration of an innovation patent is different to the standard patent. An innovation patent is granted after a formality examination. 61 Special leave to appeal to the High Court in the Delnorth case was denied: Dura-Post (Aust) Pty Ltd v Delnorth Pty Ltd [2009] HCATrans 328. This decision was confirmed in SNF (Australia) Pty Ltd v Ciba Speciality Chemicals Water Treatments Ltd (2012) 96 IPR 365. Special leave to appeal was denied: SNF (Australia) Pty Ltd v Ciba Speciality Chemicals Water Treatment Ltd [2013] HCATrans 54. 62 (2105) 116 IPR 54; 240 FCR 85; [2015] FCAFC 179. 63 (2015) 116 IPR 54; 240 FCR 85 at [15]; [2015] FCAFC 179. 64 Special leave to appeal to the High Court was denied: Product Management Group Pty Ltd v Blue Gentian LLC [2016] HCASL 96.

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This means that there is no examination of substantive matters such as novelty. Consequently, the patent is quick and cheap to obtain. However, the patentee cannot commence infringement proceedings until a substantive examination has been conducted and the patent is certified by the Commissioner: Patents Act s 120(1A). Owners of innovation patents must therefore be careful not to overvalue their innovation patent. The fact that it is registered, does not mean that it will survive examination. To prove the point, one patent attorney (with a sense of humour) registered an innovation patent for a ‘circular transportation facilitation device’ (ie, a wheel). The inventor is limited to no more than five claims for an innovation patent. In contrast, the standard patent may contain as many claims as the invention will support.

Duration of an innovation patent 2.34 The monopoly created for an innovation patent lasts for eight years.

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Review of the innovation patent system 2.35 In 2011 the Advisory Council on Intellectual Property (ACIP) was asked to investigate the effectiveness of the innovation patent system in stimulating innovation by Australian small to medium enterprises. ACIP’s final report was released in 2014 and the government is currently considering its response. The key findings include raising the standard of the innovative step requirement, requiring examination after a certain period of time and reducing the scope of patentable subject matter for innovation patents to exclude methods, processes, and systems. Although it recommended making such changes, as to the central question itself, ACIP was ‘unable to obtain adequate empirical evidence as to whether the system does or does not stimulate innovation in Australian SMEs’.65 In 2016 the Productivity Commission finalised its enquiry into Australia’s intellectual property arrangements, finding that the majority of intended beneficiaries of the innovation patent, small and medium size enterprises, do not obtain value from the system and that the costs of the innovation patent regime outweigh any benefits.66 The government has accepted the recommendation of the Productivity Commission to abolish Australia’s innovation patent system. At the time of writing there was a Bill before parliament,67 containing provisions to achieve this.

65 Advisory Council on Intellectual Property, Review of the Innovation Patent System, Canberra, 2014, p 3. 66 Government response: Productivity Commission Inquiry into Intellectual Property Arrangements, above n 7, p 10. 67 Intellectual Property Laws Amendment (Productivity Commission Response Part 2 and Other Measures) Bill 2019.

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Ownership of Patents 2.36 In terms of s 15 of the Patents Act, a patent may be granted to: • the inventor; • a person who is entitled to have the patent assigned to him or her, should a successful application be made; • a person who derives title to the invention from either the inventor or the person entitled to the patent; or • the legal representative of a deceased inventor or assignee. There is no requirement for the applicant to be an Australian citizen. Over 90% of patents are granted to non-residents. Patents may be jointly owned, in which case each owner, subject to any agreement to the contrary, may exploit the invention without accounting to the other owners.

Who is the inventor? 2.37 A person has an entitlement to an invention (as the inventor or one of the inventors) if that person’s contribution, either solely or jointly with others, had a material effect on the invention (ie, the essential features of the invention): Row Weeder Pty Ltd v Nielsen.68 In Neobev Pty Ltd v Bacchus Distillery Pty Ltd (admins apptd) (No 3),69 Besanko J in the Federal Court held that to:70

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… claim inventorship is to claim at least some role in the final conception of that which is sought to be patented. Perhaps one need not be able to point to a specific component as one’s sole idea, but one must be able to say that without his contribution to the final conception, it would have been less — less efficient, less simple, less economical, less something of benefit.

Where there are joint inventors, the patent can be granted to all of them. An employee is not normally regarded as a joint inventor. A contractor engaged to carry out the inventor’s instructions is not normally regarded as one of the inventors. This is true even if the contractor suggests ways to aid in the invention’s design or operation. However, if the contractor’s suggestions give a result or advantage not contemplated by the original concept, the contractor may qualify as a joint inventor of the improved invention. Polwood Pty Ltd v Foxworth Pty Ltd (2008) 244 ALR 626; 75 IPR 1; [2008] FCAFC 9 Facts: Polwood developed a new process for producing an improved potting mix for growing plants from sawmill waste. Polwood explained the process to Foxworth in confidence. Foxworth

68 (1997) 39 IPR 400. 69 (2014) 104 IPR 249; [2014] FCA 4. 70 (2014) 104 IPR 249; [2014] FCA 4 at [106].

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Marketing and the Law then designed an apparatus (PSU/Mark II) that put the idea into practice. In designing and building the apparatus, Foxworth used inventive skill. Polwood applied for a patent in its own name. The patent claims covered both the process and the apparatus. Foxworth objected on the basis that it had designed the apparatus used to operate the process. Thus, Foxworth claimed to be a joint inventor. Polwood denied this and claimed that the invention was the whole concept and that it could not be broken into two parts; that is, the method and the apparatus for operating the method. Decision: The patent specified both a process and an apparatus for employing the process. The apparatus contained inventive elements that were due to the efforts of Foxworth. Therefore, the inventive concept or heart of the patent was not just the process — it was the process and the apparatus. Polwood and Foxworth were joint inventors and jointly entitled to the patent.

Employee inventions 2.38 Most ownership difficulties arise where the inventor created the invention while in the service of another person. Who owns the invention? The answer to this depends on two questions: 1. Was the inventor an employee or a consultant/contractor? 2. If the inventor was an employee, was the invention created in the course of the employment? Unlike the UK and some other countries, there is as yet no provision under the Australian Patents Act for employers and employees to share ownership or benefits (except by agreement). The patent is either owned by the employer or by the employee.

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A. Was the inventor an employee? 2.39 It is more likely that an invention will belong to the employer where the inventor is an employee rather than a consultant or contractor. The distinction between an employment relationship (contract of service) and a consultancy relationship (contract for services) is difficult to define and even more difficult to apply. Originally the courts applied a test based on control. Thus, if the employer was able to direct not only what was to be done, but also how it was to be done, then the relationship was one of employer/employee and the contract was a contract of service. If the employer had no control over how work was to be performed, the relationship was said to be a contract for services. However, this test proved inadequate. For example, resident doctors at hospitals are clearly employed by the hospital. Nevertheless, hospital administrators generally have no power to tell the employee doctors how to treat the patients. A similar situation prevails with scientists employed at sophisticated research laboratories, such as the CSIRO. The 78

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more complex and skilled the work performed by the worker, the less likely the employer has any real power to direct how that work is to be carried out. Therefore, in determining whether a person is an employee or a consultant, all the circumstances must be looked at. Control, insofar as scope for it exists, is certainly one of the factors to be taken into account. Other factors include: • the circumstances surrounding appointment; • the scope of the employer’s power of dismissal; • whether tax is deducted by the employer; • holiday entitlements; • hours of work; • the place where the work was conducted; and • whether equipment was supplied by the employer or the worker.71

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B. Was the invention created in the course of employment? 2.40 Having determined that the inventor is an employee, it is necessary to examine the circumstances surrounding the invention in order to determine whether the invention came about in the course of the inventor’s employment duties and, therefore, belongs to the employer, or whether it came about outside the scope of the employment duties and belongs to the employee. The critical question is: what was the employee paid to do? Once again, all the relevant factors must be looked at, including the following: • whether the employee was hired or directed to create the invention which is the subject of the patent — if the employee was hired to solve a problem and the solution involves the creation of a patentable invention, it would be very difficult for an employee to argue that the invention does not belong to the employer; • whether the employee used the employer’s materials and time in developing the invention — where the employer’s time and materials have been used in developing the invention the court will be more disposed to regard the invention as belonging to the employer; • whether the invention is related to the employer’s business — an employee who creates an invention that is unrelated to the employer’s business is likely to be regarded as the owner of that invention; • the position or status of the employee; and • the express terms of the contract. Employment contracts often contain an express provision that ownership of any inventions created by the employee belong to the employer. Such provisions, however, must be treated with some care. They are not always enforceable. If the provision is unreasonably wide in favour of the employer, it will be declared void as an unreasonable restraint of

71 Hollis v Vabu Pty Ltd (2001) 207 CLR 1; 181 ALR 263; [2001] HCA 44.

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trade. Courts will be hesitant about implying any term giving ownership to the employer: see University of Western Australia (UWA) v Gray (No 20).72 Spencer Industries Pty Ltd v Collins (2003) 58 IPR 425; [2003] FCA 542 2.40C1

Facts: Spencer Industries was a family business manufacturing equipment used in the tyre retreading business, particularly rasp blades, hubs and spacers, and pins for hubs. The driving force in the family business was Mr Pincott. In 1991 Collins was hired as sales manager working at the direction of Pincott. Collins was the only sales staff. At no stage was Collins instructed that it was part of his job to improve existing products or design new ones. There was no express agreement by which Collins agreed that all inventions and innovations belonged to Spencer Industries. Collins, in his own time, conceived and designed a more efficient and effective tooth for a rasp blade. The drawings were done by Collins in his own time using his own materials. He showed the drawings to Pincott and eventually Spencer Industries applied for a patent. Collins objected on the basis that Spencer Industries was not entitled to have the patent granted to it. The Patent Office decided that Collins had created the invention outside the course of his employment. Therefore, Spencer Industries was not entitled to a patent. Spencer Industries appealed.

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Decision: The issue was whether Collins had created the invention in the course and scope of his employment. This involved considering the nature and seniority of his position with the firm, the nature of his duties as sales manager and whether he received a specific directive relating to the invention. The invention was wholly created in his own time and fell outside the duties he was required to perform as sales staff. Although Collins clearly envisaged that the invention would be exploited by Spencer Industries, this did not mean that the invention was created within the scope of Collins’s employment. Collins expected to be adequately rewarded. The right to the patent belonged to Collins.

As a matter of prudent business, there is value in requiring staff to acknowledge that inventions created in the course of the employee carrying out his or her employment belong to the employer. However, such acknowledgements are of no effect if the invention was not created in the course of employment. Electrolux Ltd v Hudson [1977] FSR 312 2.40C2

Facts: Electrolux manufactured vacuum cleaners. Hudson was employed as a storekeeper. The job did not involve any responsibility for research and development. Hudson and his wife developed an adaptor to fit a bag to a vacuum cleaner. The work to develop the adaptor was done at the Hudsons’ house outside work hours and using their own materials. Electrolux claimed the invention on the basis of a term in Hudson’s employment contract which gave Electrolux ownership of any process, invention, or improvement relating to a wide variety of things including things which had no connection with Electrolux. Alternatively, Electrolux claimed ownership of the invention on the basis that Hudson had developed the invention in the course of his employment. 72 (2008) 246 ALR 603; 76 IPR 222; [2008] FCA 49.

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Chapter 2: Protecting Inventive Ideas Decision: The court rejected both arguments. The express term in the employment contract was too wide to protect Electrolux’s legitimate interests and was, therefore, void as an unreasonable restraint of trade. Although there was an implied term that inventions developed in the course of Hudson’s employment belonged to Electrolux, Hudson had not developed the adaptor in the course of his employment.

Even where an invention is not created in the course of the employment, the employer may still have beneficial rights if the employee acted in breach of a duty owed to the employer. Victoria University of Technology v Wilson (2004) 60 IPR 392; [2004] VSC 33 Facts: Wilson was head of department in Applied Economics at Victoria University and Feaver was a senior lecturer. They specialised in the area of international trade. As part of their employment they were required to do research. Astill, a former student, approached Wilson and Feaver with an idea for an online teaching program about the World Trade Organization. At the direction of Wilson as head of department, Feaver worked on the idea together with Astill. The commercial possibilities for the program were soon recognised. Wilson, Feaver, and Astill decided that they would develop the idea privately.

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They agreed on a split of 40% for each of Wilson and Feaver and 20% for Astill. Wilson and Feaver stopped working on the invention during Victoria University time and henceforth the work was done outside working hours. Wilson and Feaver transferred their interests to a company, IP3 Systems. IP3 Systems applied to patent the invention. Victoria University objected that the invention belonged to it. Who had the patent rights to the invention? Decision: Wilson and Feaver used Victoria University materials, but this does not mean that the invention belonged to Victoria University. In using the materials Wilson and Feaver may merely have been in breach of their contract. A part of Wilson and Feaver’s employment required them to do research. However, that did not automatically mean that all their research belonged to Victoria University. It depends on the scope of their employment from time to time. Each case will depend on its own circumstances. In this case, the research which was to lead to the invention arose in the course of employment because Wilson, who was head of department, had specifically directed Feaver to work on the invention. But, when Wilson directed Feaver not to work on the invention in Victoria University time, the research moved outside the course of employment. The final invention, upon which the patent application was based, was not created in the course of employment with Victoria University. Therefore, IP3 Systems, and not Victoria University, was entitled to the patent. Wilson and Feaver, however, owed fiduciary duties to Victoria University. All employees owe fiduciary duties to their employer not to profit from their position at the expense of their employer and to avoid conflicts of interest and duty. By moving the invention from Victoria University to the private concern in which they were partners (without disclosing the matter fully to Victoria University), Wilson and Feaver had acted in breach of their fiduciary duties. The court ordered that Victoria University was entitled to the shares owned by Wilson and Feaver in IP3 Systems.

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Patent Rights Nature of patent rights 2.41 The patentee acquires a monopoly in the invention the subject of the patent. This means that the patentee has the exclusive right to exploit the invention. ‘Exploit’ means to make, use, hire, sell, or otherwise dispose of the invention, offer to make, sell, hire or otherwise dispose of it, use or import it, or keep it for the purpose of doing any of those things; or where the invention is a method or process — use the method or process or do any aforementioned act in respect of a product resulting from such use: Patents Act Sch 1. The patentee also has the exclusive right to authorise others to exploit the invention. Where the patent is jointly owned, each owner, subject to any agreement to the contrary, may exploit the invention without accounting to the other owners, although no owner may license or assign the invention without the approval of all owners. As this is a monopoly, the patentee is protected not only against copying, but also against independent creation.

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Assigning or licensing patent rights 2.42 Patent rights may be sold (assigned), licensed, mortgaged, given away, or left in a will. An assignment must be in writing and signed by the assignor and assignee: Patents Act s 14. A licence is a contract, either express or implied, in which the patent-holder (licensor) permits another person (licensee) to make use of the invention subject to conditions. The licence does not have to be in writing or signed. The licence conditions can take many forms and will depend on the circumstances of the case. Great care must be taken in drafting the terms of the licence so that both parties are protected. A licensee could register this as a security interest on the national Personal Property Securities Register.73 A licence may be exclusive or non-exclusive. An exclusive licence gives the licensee the sole right to exploit the invention the subject of the patent. A licence may be limited geographically. For example, one licensee may be given the right to exploit the invention in Victoria and another the right in New South Wales. The fee paid for the use of a licence is called a royalty payment. Where a patent is jointly owned, each owner may exploit the patent, but no owner may assign or license the patent rights without the consent of all owners. The following matters would normally appear in a patent licence: • identity of the patent; • territory of the licence; 73 Personal Property Securities Act 2009 (Cth) commenced on 30 January 2012.

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• restrictions on the licence; • duration; • fee; • termination of licence and reversionary rights; • licensor and licensee obligations to protect and maintain patent; • reporting and record keeping (and licensor’s right of audit); • confidentiality; and • indemnities. In order to protect and fully exploit the commercial value of a licence, the patentholder may also include a number of restrictive covenants in the licence. Many of these conditions are perfectly legitimate. Some, however, are regarded as unjustifiable exploitation and are prohibited either by the Patents Act (‘Abuse of patent rights’, see 2.43), or by the law on covenants in restraint of trade,74 or by Pt IV of the Competition and Consumer Act 2010 (Cth).75

Abuse of patent rights 2.43 The patentee must not abuse the monopoly rights given by the patent. A patentee may be tempted to exploit the leverage created by the patent to force buyers of the patented product or licensees of the patent to acquire goods or services other than the patented goods. This may amount to an unjustified extension of the monopoly. A term in an assignment or a licence that imposes such exclusive dealing conditions upon the assignee or licensee may be void.

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Compulsory licences 2.44 Three years after a patent is granted an interested person may apply to the court for an order that the patentee grant a compulsory licence on such terms as the court thinks just: Patents Act s 133. The grounds for such an application are that the person applying for a compulsory licence has unsuccessfully tried for a reasonable period to obtain from the patentee permission to use the invention on reasonable terms and conditions; reasonable requirements of the public with respect to the patented invention have not been satisfied and the patentee is unable to give a satisfactory explanation: Patents Act s 133(2)(a); or that the patentee is engaging in anti-competitive conduct in contravention of Pt IV of the Competition and Consumer Act 2010 (Cth): s 133(2)(b). Section 135 of the Patents Act sets out certain circumstances in which the reasonable requirements of the public are not being met. The compulsory licensing system has not been widely used in Australia.

74 For a discussion on the law governing covenants in restraint of trade, see 3.31–3.38. 75 Part IV of the Competition and Consumer Act 2010 prohibits certain anti-competitive activities. These are discussed in Chapters 14 and 17.

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Purchasers of patented products 2.45 A person who purchases a product that is the subject of a patent is not permitted to make copies of the product, but is permitted to use the product freely including: • selling or hiring the product: National Phonograph Company of Australia Ltd v Menck;76 and • repairing the product or having it repaired by a third person: Solar Thompson Engineering Co Ltd v Barton.77

Infringement of Patents

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Rules relating to infringement 2.46 Infringement is not actually defined in the Patents Act. It occurs when a patent is exploited, without authority, in the patent area (Australia), as disclosed in the claims. Schedule 1 to the Patents Act provides that the exclusive right to ‘exploit’ the invention includes the right to: (a) where the invention is a product — make, hire, sell or otherwise dispose of the product, offer to make, sell, hire or otherwise dispose of it, use or import it, or keep it for the purpose of doing any of those things; or (b) where the invention is a method or process — use the method or process or do any act mentioned in paragraph (a) in respect of a product resulting from such use. In determining whether a patent right has been infringed, it is therefore necessary to determine: • whether the alleged infringer is doing something within the exclusive rights of the patentee; • the scope of the claims; • whether the essential elements of the claims have been taken; and • whether any exceptions or defences to infringement apply.

Determining the scope of the claims 2.47 Determining the scope of the claims is not an easy matter. The rules for interpreting claims are set out in Decor Corporation Pty Ltd v Dart Industries Inc.78 Basically, the courts look for the essential elements of each claim as might be

76 (1911) 12 CLR 15; [1911] AC 336; 28 RPC 229. 77 [1977] RPC 537. 78 (1988) 13 IPR 385.

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determined by a person skilled in the relevant art.79 In determining the essential elements, the courts adopt a purposive interpretation of the claims, rather than a literal one: Populin v HB Nominees Pty Ltd; Populin v Binder;80 Decor Corporation v Dart Industries Inc.81 Thus, in Catnic Components Ltd v Hill & Smith Ltd,82 the patent claim referred to a ‘vertical’ back plate in respect of a novel lintel for use above doors and windows. The defendant’s product used a back plate that was slightly inclined to the vertical. The House of Lords held that the patent could not be read too literally. The defendant had taken the essential elements of the patent.

Determining whether the essential elements of the claims have been taken 2.48 Once the essential elements of a claim have been determined, it is necessary to examine whether the defendant has taken (ie, adopted or used) each and every one of those essential elements: Rhone-Poulenc Agrochimie SA v UIM Chemical Services Pty Ltd;83 Welcome Real-Time SA v Catuity Inc.84 If all the essential integers are taken, there is an infringement. In such cases it does not affect the infringement that the defendant has replaced one or more of the inessential elements with some functional or mechanical equivalent: Populin v HB Nominees Pty Ltd; Populin v Binder.85 Kimberly-Clark Australia Pty Ltd v Multigate Medical Products Pty Ltd (2011) 92 IPR 21; [2011] FCAFC 86

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Facts: Kimberly-Clark is a multinational company with consumer brands such as ‘Kleenex’ and ‘Huggies’. It owns patents for a ‘single step sterilisation wrap system’. The claims comprised use of a sterilisation wrap made up of an ‘inner wrap sheet’ and an ‘outer wrap sheet’. Images of two separate sheets accompanied the description. Multigate proposed to promote and sell a sterile wrap product in Australia. Kimberly-Clark commenced infringement proceedings. Multigate denied infringement and cross-claimed that the patents were invalid. The primary judge held that Multigate did not infringe the patents. Kimberly-Clark appealed to the Full Court. Decision: The patents were valid, but they were not infringed by Multigate. Multigate’s product was made by folding one single sheet over rather than using two separate sheets. If the defendant has not taken all of the essential features there will be no finding of infringement. Since Multigate’s product did not use two separate sheets it did not take all of the essential features of the Kimberly-Clark patents.

79 Minnesota Mining & Manufacturing Co v Beiersdorf (Australia) Ltd (1980) 144 CLR 253; 29 ALR 29; 1A IPR 231, see 2.21C1. 80 (1982) 41 ALR 471. 81 (1988) 13 IPR 385. 82 [1981] FSR 60. 83 (1986) 12 FCR 477; 68 ALR 77. 84 (2001) 51 IPR 327; [2001] FCA 445, see 2.8C1. 85 [1981] FSR 60.

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Determining whether any exceptions or defences to infringement apply 2.49 The Patents Act includes some exceptions to infringement of a patent. These include use by the Crown, use in or on foreign vessels, aircraft, or vehicles temporarily in the patent area, experimental use, prior use (see 2.52), and ‘springboarding’ (acts required to obtain regulatory approval from a state or Commonwealth government or law of another country): Patents Act ss 118–119C.

Practical aspects of protecting patent rights

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2.50 The costs (in both money and time) of proving infringement can be extremely high. Patent litigation is very complex and requires experts and other specialists. This creates real problems, particularly for small and medium-sized enterprises (SMEs). Defendants often challenge the validity of the patent as a defence strategy. Thus, the patentee is forced to defend the patent’s right to remain on the register. This could mean a fight on the grounds of novelty, inventiveness, utility, secret use, etc. Indeed, large organisations can use the high cost of litigation as a strategy to deter SMEs from protecting their patent rights. For this reason, the Productivity Commission recommended that the Federal Circuit Court introduce a specialist intellectual property section with strict case management rules to fast track cases and minimise legal costs so as to improve access to the courts and enforcement of IP rights, particularly for smaller businesses.86 The Federal Circuit Court’s IP section was established following this recommendation, however it does not currently apply to patent cases. At the time of writing, expansion of the court’s jurisdiction to include patent proceedings was on hold. It is to be hoped this lower cost, faster court option will be available to patent litigants in the future.

2.50C

Grove Hill Pty Ltd v Great Western Corp Pty Ltd (2002) 55 IPR 257; [2002] FCAFC 183 Facts: Mansur invented a row cultivator for use in farming. Prior to applying for a patent, he trialled various combinations of the integers (blades etc) that made up the cultivator over a period of 14 months, which covered two growing seasons. Eventually a patent was granted for the cultivator. The first group of claims made in the patent referred to ‘a pair of plates’ to which cutting blades were attached. The patent holder was Great Western Corporation (GW), which acquired the rights from Mansur. Grove Hill supplies agricultural equipment. GW alleged that products supplied by Grove Hill infringed GW’s patent rights. The alleged infringing products used two pairs of plates to which cutting blades were attached. Grove Hill denied infringement and counter-claimed

86 Productivity Commission, Inquiry Report, Intellectual Property Arrangements, No 78, 23 September 2016, available at .

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Chapter 2: Protecting Inventive Ideas for revocation of the GW patent on a variety of grounds including lack of novelty, lack of inventiveness, and prior secret use. At trial GW succeeded and Grove Hill appealed. Decision: First, the court examined Grove Hill’s argument that the patent should be revoked. In the court’s opinion, the invention as claimed was both inventive and novel. This left the question whether Mansur’s prior use invalidated the patent, which in turn depended on whether the prior use was for the purposes of reasonable trial or experiment (s 9). Dowsett J said: In assessing what might be reasonable for present purposes, it is necessary to keep in mind the nature of the equipment in question, the tasks for which it was designed, and the conditions under which it is to be used. Clearly, a row cultivator or a tool for a row cultivator will have to be very robust to enable it to resist the rough nature of its likely employment. It will be expected to perform in a wide variety of conditions, both of weather and terrain. It is easy to accept that such a piece of equipment could not be subjected to reasonable trials in anything less than a year, particularly given the seasonal nature of its employment. Therefore, the use was reasonable and there had been no secret use. The patent was valid. However, there had been no infringement. The patent claims referred to ‘a pair of plates’. This could not be reinterpreted to include ‘two pairs of plates’ simply because that was a possible construction of the invention as described in the specification. Gyles J said: A patentee cannot eat the cake and have it too by persuading a court to construe a claim more widely than the patentee was prepared to risk when framing the claims under the guise of purposive construction. If an essential integer of the claimed monopoly is not present, it is not to the point that the absence of it can be explained as a conscious attempt to engineer around the claim. There is no doctrine of functional or mechanical equivalence applicable in such a case.

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Contributory infringement 2.51 The Patents Act provides that if the use of a product by a person would infringe a patent, the supply of that product by one person to another is an infringement of the patent by the supplier: Patents Act s 117. For example, if X supplies a product knowing that B will use it in infringement of C’s patent, the supply by X is itself a contributory infringement. This includes supplying a product to B with instructions for use, which was considered by the court in the following case. AstraZeneca AB v Apotex Pty Ltd (2014) 312 ALR 1; 107 IPR 177; [2014] FCAFC 99 Facts: The pharmaceutical patent concerned a low dosage of the active ingredient, rosuvastatin. AstraZeneca argued that the supply of 5 mg, 10 mg, 20 mg and 40 mg dosages of rosuvastatin together with information about the fact that they could be split to provide two doses (eg, breaking a 20 mg tablet in half to provide two lots of 10 mg doses) constituted patent infringement under s 117(2)(c). Decision: The Full Court decided that the terms of infringement under s 117(2)(c) were met. The product information statement provided by the supplier Watson to customers along with

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Marketing and the Law the 20 mg tablet dosage gave a clear inducement to the customers to cut the tablets in two so as to result in two lower doses of rosuvastatin that would, if the patent had been found valid, have infringed the claims of the patent under s 117(1) and s 117(2)(c). Further, the court found that the suppliers had reason to believe that consumers would use the supplier product information to engage in infringing use by cutting the tablets in half to get multiples of a smaller dosage.

Danisco A/S v Novozymes A/S (No 2) (2011) 91 IPR 209; [2011] FCA 282 2.51C2

Facts: Danisco owned a patent for preparing food by including the use of an enzyme. Novozymes supplied an enzyme for use in the production of baked goods. Danisco sued for contributory infringement under s 117. Decision: There was contributory infringement. The enzyme was used by the customer in baked goods, which infringed the patent. The only reasonable use of the enzyme was in baking. Novozymes promoted the use of the enzyme in baking in its advertisements and instruction sheets and had a reason to believe it would be used for baking. Section 117 applied and the supply by Novozymes amounted to contributory infringement.

The circumstances leading to contributory infringement may also amount to misleading or deceptive conduct under s 18 of the Australian Consumer Law.87 Promoting supply of a product for a purpose that is likely to infringe a patent without warning customers of this possibility has been held to be misleading conduct: Advanced Building Systems Pty Ltd v Ramset Fasteners (Aust) Pty Ltd.88

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Prior user rights 2.52 The Patents Act protects those who were using the invention prior to and at the priority date: Patents Act s 119. The use will be secret use because, if the use was public, the invention would not be novel or inventive. Therefore, s 119 only applies where the invention is being secretly used by another person prior to the priority date. The person cannot have obtained the invention from the inventor.

Remedies for Infringement 2.53 If the patentee is able to prove that the defendant has, without authority, used the ‘essential elements’ contained in the claims, then the patentee may seek a variety of remedies.

87 The Australian Consumer Law is included as Sch 2 to the Competition and Consumer Act 2010. 88 [1999] FCA 898.

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Damages or an account of profits 2.54 The patentee is entitled to claim such damages by way of compensation as would be necessary to put the patentee in the position he or she would have been in if the patent had not been infringed: Patents Act s 122(1). The method of calculating the damages will depend on a number of factors including whether the patentee was exploiting or planning to exploit the patent himself or whether he was more likely to license others to exploit it. Damages may be based on lost manufacturing profits, or lost licensing royalties, or such other basis as is appropriate in the circumstances. The court also has a discretion to award additional damages under s 122(1A), which are designed to be punitive in nature and to deter flagrant and knowing patent infringement. Damages may not be awarded in so-called innocent infringement cases; that is, where the defendant neither knew nor had reason to believe that a patent existed: Patents Act s 123(1). The vital question in such a case will be whether it was reasonable for the defendant not to conduct a patent search that disclosed the patent. As an alternative remedy to damages, the plaintiff may seek an account of profits: Patents Act s 122(1). Although cogent reasons may exist for seeking an account of profits, damages are normally the remedy of choice because of the difficulty and unpredictability of calculating the profits made by the defendant.

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Injunctions 2.55 The plaintiff may apply for an interim as well as a permanent injunction: Patents Act s 122(1). An interim injunction may be granted at the court’s discretion if the plaintiff is able to establish a prima facie case and the balance of convenience favours the granting of the injunction. An interim injunction will not be granted if there is significant doubt as to the validity of the patent. In determining the balance of convenience, the court will take into account matters such as whether damages would be an adequate remedy, whether the patentee has delayed in bringing the action, and whether the defendant was aware of the patentee’s rights and deliberately took the risk.89 Interim orders, such as an Anton Piller order and a Mareva injunction, may be awarded in appropriate circumstances.

A. Anton Piller order 2.56 An Anton Piller order is somewhat like a search and seize order. It enables the plaintiff to enter the defendant’s property and to seize relevant evidence, such as pirated recordings, which might otherwise be destroyed. Application for an Anton Piller order is made ex parte; that is, without notification to the defendant. An Anton Piller order will even be granted where the name of the defendant is 89 See Beecham Group Ltd v Bristol Laboratories Pty Ltd (1968) 118 CLR 618; [1968] RPC 301.

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not yet known. This entitles the plaintiff to search for and seize goods (evidence) from transient traders, such as street and flea market vendors. This kind of order is commonly referred to as a ‘John or Jane Doe Order’.90

B. Mareva injunction 2.57 A Mareva injunction is an interlocutory order preventing the defendant from removing assets from the jurisdiction pending the hearing of a case.91 An alleged infringer may wish to remove assets from Australia so as to defeat any court order, for example, damages, made against it were the matter to come to trial. As with the Anton Piller order, the Mareva injunction is made ex parte. Because of the potential for injustice, the courts are wary about granting Anton Piller orders and Mareva injunctions.

Other orders 2.58 In appropriate circumstances, the court has the power to order the delivery up for destruction of products. The basis of delivery up is to remove a source of temptation from the infringer. Delivery up will not be ordered if the infringing items have a legitimate use.

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Making Unjustified Threats 2.59 Care must be taken when threatening another with an action for infringement of a patent. If the threats are not justified, the person threatened may claim compensatory damages and, at the discretion of the court, also additional punitive damages: Patents Act s 128. This provides a deterrent against unjustifiable intimidation which might have the effect of preventing competition or discouraging the use of skills. Unfortunately, the provision appears also to have some unintended consequences. There is evidence that the provisions relating to unjustified threats deter some small enterprises from taking even basic steps to protect their patents for fear of provoking a costly and uncontrollable legal action. However, the mere notification of the existence of a patent or patent application is not to be construed as an unjustified threat: Patents Act s 131.

90 See Fila Canada Inc v Jane Doe & John Doe (1966) 35 IPR 104. 91 Mareva Compania Naviera SA v International Bulkcarriers SA (The Mareva) [1980] 1 All ER 213.

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Revocation of Patents 2.60 Even though a patent has been granted, this is no guarantee of the validity of the patent: Patents Act s 20. A granted patent may be revoked by order of the Commissioner of Patents: Patents Act s 101; or a court: Patents Act s 138. For example, in the US, Amazon was initially successful in patenting its one click online ordering process. The one click online process enables shoppers to call up their personal details (credit card and shipping information) with a single mouse click when making purchases. The patent was widely criticised. Amazon used the patent to successfully sue Barnes and Noble, another online book retailer. In 2005, upon application by a New Zealander, the US Patents Office announced that it would re-examine the patent. Eventually the patent was allowed to remain on the register, but only after Amazon had made some amendments. The patent remained controversial and has since expired. Revocation is necessary where the court finds that the patent has been invalidly registered. That this occurs is not surprising, given that a document published earlier anywhere in the world can destroy the novelty of an invention and given the small likelihood that every possible document will come to the attention of the Patent Office during examination. Revocation proceedings are typically commenced when a person is sued for infringement of a patent and then crossclaims for rectification of the register on the basis that the patent ought not to have been granted in the first place: see Bristol-Myers Squibb Co v F H Faulding & Co Ltd.92 The grounds upon which a patent may be revoked include the following: • the invention is not a manner of manufacture; • the invention is not novel; • the invention is obvious (not inventive) or, in the case of an innovation patent, not innovative; • the invention is not useful; • the invention was secretly used prior to the priority date; • the patentee is not entitled to the patent; • the patent or any amendment thereto was obtained by fraud, false suggestion, or misrepresentation; and • the requirements of s 40(2) and (3) of the Patents Act have not been satisfied. Even if one of these grounds is made out, the court must not revoke the patent unless it is ‘satisfied that in all the circumstances, it is just and equitable to do so’: Patents Act s 138(4). The court may decide to revoke some of the claims or the whole patent. The register may also have to be rectified where the patent is registered in the wrong name. For example, where an employee takes out a patent which really 92 (2000) 170 ALR 439; 46 IPR 553; [2000] FCA 316.

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belongs to the employer, the court will declare that the employee holds the patent in trust for the employer and order that the register be altered to show that the employer is the patentee.

International Aspects of Patents 2.61 There is no international patent. It is up to each country to decide whether to grant a patent in any given circumstance. An inventor desiring international protection must be prepared to seek registration in all countries in which protection is required. While there is no international patent, there are a number of international treaties and conventions which help the inventor seeking to protect her invention in more than one jurisdiction.

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Paris Convention 2.62 Over 170 countries are signatories to the Paris Convention for the Protection of Industrial Property. The Convention was formed in 1883 and Australia — formerly the various colonies — has been covered by the Convention ever since. The Convention requires a member state to grant the same industrial property rights to nationals of other Convention states as it grants to its own nationals. This means that member states must not discriminate against inventors on the basis that they are foreign nationals provided the inventor is from a Convention country. Convention countries also agree to give priority to patent applications from other Convention states. This means that, if a patent specification is given a certain priority date in Australia, the inventor has the right to the same priority date in any Convention country provided the application in that Convention country is made within 12 months of the date of first filing in Australia. The Paris Convention does not otherwise impose many requirements on the member countries. For example, there is no requirement that member states apply the same definition to the meaning of an invention.

TRIPS Agreement 2.63 Australia is a signatory to the GATT-WTO Agreements. One of the GATTWTO Agreements is the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). TRIPS covers the full range of intellectual property matters and, as far as patents are concerned, requires signatory countries to provide protection for industrial products and processes which are new and involve an inventive step. Protection is to be for 20 years. TRIPS does not try to harmonise the

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patent systems in the various member countries; it merely sets down a minimum standard of protection.

Patent Cooperation Treaty 2.64 The Patent Cooperation Treaty provides for cooperation among countries with respect to lodging patent applications. Thus, the Australian Patent Office acts as a recipient for applications for other members of the treaty. This can significantly reduce the expense of making multi-country applications. It also means that it is only necessary to prepare an application in English. Over 150 countries are signatories to the Patent Cooperation Treaty. Due to the complexities of the patent system of each country and the existence of various filing options, it is advisable for an intending applicant to consult a registered patent attorney before attempting to file an application in (or with effect in) any foreign country.

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European Patent Convention 2.65 The European Patent Convention allows inventors to make a central patent application to the European Patent Office (EPO) and thereby seek patent protection in 44 member countries. There is a central uniform examination undertaken by the EPO and then granted European patents must be validated and maintained individually in each member country where the patent grant takes effect. This means for example, paying renewal fees to each individual country where the patent is granted and complying with the patent laws of each member country. The EPO is at the time of writing also introducing what is called a unitary patent, which as the name suggests, will grant uniform patent protection in up to 26 EU member states. This has the advantage over a European patent in that not only is all filing and examination done centrally by the EPO, but also all maintenance functions. This will do away with the need for patentees to subsequently deal with individual country patent offices, for example, when paying renewal fees.93 Perhaps more importantly, however, the unitary patent will confer truly uniform patent protection. The Agreement on the Unified Patent Court means that patent rights and remedies have been harmonised across the member states. Needless to say, this should result in considerable cost savings for patentees and make unitary patents easier and more cost effective to administer, maintain and defend in any infringement actions.

93 See further ‘Unitary Patent’ at .

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Advantages and Disadvantages of a Patent Disadvantages of a patent 2.66 There is no law that compels an inventor to apply for a patent. In fact, there may be cogent reasons why it would be better to keep an invention secret, including the following. 1) A patent monopoly only lasts for 20 years. After 20 years the patent holder must expect his or her competitors to be in a position to utilise the invention. 2) The nature of the patent invention must be made public. Anyone may inspect the register of patents. In fact, the register of patents is a rich source of information for firms. Therefore, even prior to the termination of the monopoly, the patent owner can expect competitors to have fully analysed the nature of the invention and to have sought improvements. 3) Patent application and maintenance is expensive. The initial costs may be beyond small inventors. This is particularly so where international protection is required. The costs of fighting off potential infringers may be prohibitive for all but those with the deepest pockets. 4) Inventors ought to be aware of how patents tend to fare when subjected to court scrutiny. A study has shown that in 38% of patent infringement actions where there was a cross claim for revocation, the court found the patent valid and subsequently that infringement had been made out.94

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Advantages of a patent 2.67 The advantages of patenting and the disadvantages of alternative forms of protection must be weighed against the disadvantages of patenting. For a new and creative industrial product or process the only real alternatives to a patent are secrecy and better marketing. • Patent registration creates a monopoly in that the patentee is protected against reverse engineering and even independent creation of the same invention. While the law will protect trade secrets in certain circumstances, the trade secrets protection will not stop another inventor from reverse engineering, or independently developing, the same invention, or from accidental disclosure of the invention. • As a patent becomes part of public information, there are no costs associated with maintaining secrecy. The essence of an injunction or other remedy under the law of trade secrets is that the invention be a secret and that adequate steps 94 Kimberlee G Weatherall and Paul H Jensen, ‘An Empirical Investigation into Patent Enforcement in Australian Courts’ [2005] FedLawRw 9; (2005) 33(2) Federal Law Review 239.

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have been taken to keep it that way. This can be a very expensive exercise. As one would expect, smaller firms are more likely to rely on trade secrets than larger firms. This is not just a matter of the cost of the patent, but also a reflection of the fact that a small firm probably has more chance of retaining a secret than a large firm does. • A major factor in favour of the patent process is the importance that it can play in initiating and simplifying technology financing and transfer. A patent is a property right. The law of trade secrets creates no such right. Consequently, the firm seeking to license the use of an invention or to raise operating funds to work the invention has a more attractive commodity if it has a patent. Subject to the validity of the patent, the rights attaching to a patent are clear. The same can never be said about a trade secret until it is tested in court. For those involved in licensing technology abroad, a patent is probably the best protection that can be had other than developing a good relationship with the licensee.

Conclusion

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2.68 Whether to take out a patent or rely on secrecy is not an easy issue. There are so many factors to be taken into account that a general conclusion is impossible. Perhaps the most important thing to remember is that the decision has to be taken at an early stage in the life of the product or process. Once the invention loses novelty there is no longer any choice. Of course, patents and trade secrets should not necessarily be seen as alternatives. A proper intellectual property strategy may require use of both the patent system and the law of trade secrets. Thus, for instance, an invention may have information associated with it that is not capable of being protected under the Patents Act but does fall into the category of confidential information.

Plant Breeder’s Rights 2.69 The Plant Breeder’s Rights Act 1994 (Cth) is a system for conferring exclusive rights on the breeder of a new variety of plant. Protection is obtained through registration. Before registration, the new variety must undergo an examination process. On registration, the breeder obtains the exclusive commercial rights to market the new variety or its reproductive material. This includes the right to direct the production, sale, and distribution (including imports and exports) of the new variety, receive royalties from the sale of plants, or sell the rights. Protection lasts for up to 25 years for trees or vines and 20 years for other species. To be eligible for protection the plant breeder must demonstrate: 95

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• that the claimed new variety is distinct, as well as being uniform and stable; and • by means of a comparative trial, that the variety is clearly distinguishable from any other variety, the existence of which is a matter of common knowledge. There is an exemption for farmers saving seeds.

Marketing Advice

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2.70 Remember that, if an idea is good, it will be copied. So if it is your idea, you should at least consider protecting it. Legal protection is not automatic. • You should be prepared to consult the necessary experts, such as a patent attorney, at an early stage. This will involve a cost-benefit analysis to determine whether patenting is likely to be worthwhile. It may be better to rely on your ability to keep the information secret, or superior marketing skills and the first to market advantage. • Until you have made the decision whether to patent or not, you should not publish details of the idea or use or discuss the idea in public. • Remember that a patent is never a substitute for good marketing.

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Protecting Commercial Secrets

13

Introduction to Breach of Confidence............................................. 3.2 Elements of Breach of Confidence................................................... 3.3 Step 1: Is the information of a confidential nature?.................. 3.4 A. Has the information become part of public property or knowledge?........................................................................ 3.5 B. Does the information have commercial value?................. 3.6 C. Has the information been treated as confidential?........... 3.7 D. Does the information go beyond employee know-how?............................................................................. 3.8 E. Common examples of trade secrets................................... 3.9 i. Research and development material............................ 3.10 ii. Industrial products and processes.................................. 3.11 iii. New product ideas.......................................................... 3.12 iv. Marketing information.................................................... 3.13 v. Customer lists.................................................................. 3.14 F. Privacy and breach of confidence....................................... 3.15 Step 2: Was there an obligation of confidence?....................... 3.16 A. Consultants and advisors..................................................... 3.17 B. Employees............................................................................. 3.18 C. Ex-employees........................................................................ 3.19 D. Company directors............................................................... 3.20 E. Joint venturers....................................................................... 3.21 F. Licensees................................................................................ 3.22 G. Assignors............................................................................... 3.23 H. Potential licensees and assignees...................................... 3.24 I. Industrial fraud or theft...................................................... 3.25 97

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Step 3: Has there been unauthorised use of the information?........................................................................ Defence of Public Interest............................................................... Remedies for Breach of Confidence............................................... Trade Secrets and Third Parties...................................................... Comparing Patents and Trade Secrets........................................... Restraint of Trade Clauses............................................................... When is a restraint clause valid?................................................. Contracts where restraint clauses are found............................. A. Sale of business agreements.............................................. B. Employment agreements.................................................... Consequences of an invalid restraint clause............................. Use of multiple descending restraint clauses........................... Summary of common law restraint of trade............................ Employees’ Duties During and After Employment...................... Marketing Advice...............................................................................

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3.26 3.27 3.28 3.29 3.30 3.31 3.32 3.33 3.34 3.35 3.36 3.37 3.38 3.39 3.40

Chapter 3: Protecting Commercial Secrets

3.1 This chapter examines the following two ways of protecting valuable commercial information: 1. the action for breach of confidence; and 2. the use of restraint of trade clauses, particularly in employment situations. Restraint of trade clauses are also used to provide some protection from competition by former business owners, former partners and, importantly, ex-employees.

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Introduction to Breach of Confidence 3.2 Chapter 2 examined how inventions, as the application of new commercial ideas and information, may be protected using the patent system. However, not all commercially valuable ideas are patentable. For example, the idea may not be a ‘manner of manufacture’, or it may not be novel, or it may not be sufficiently inventive (standard patent) or innovative (innovation patent). Even where an idea is patentable, the firm may choose to rely on secrecy rather than the patent system. There may be a number of reasons for this: 1. Some ideas lend themselves to secrecy. In fact, secrecy may add greater value to the idea than a patent would because the protection offered by a patent is limited in time, while a secret lasts as long as it is kept. For example, a product or process which cannot be discovered by reverse engineering or by chemical analysis, such as the Coca-Cola recipe, may have a commercial lifespan exceeding the 20 years provided by the Patents Act 1990 (Cth). 2. A product or process which cannot be discovered by reverse engineering or by chemical analysis may, if made the subject of a patent registration, suggest improvements and innovations to competitors which are beyond the patent monopoly. If secrecy had been maintained, rather than the essential elements being publicly disclosed in a patent application, perhaps competitors would not have been in a position to make those improvements or innovations. 3. The cost factor. Applying for a patent is not cheap. The costs of performing a worldwide search to establish novelty are very high. For many small firms without deep pockets secrecy is an attractive alternative to the patent process. Of course, maintaining a secret is also not free of cost. At the very least, extra vigilance is required. 4. The great majority of patents do not become commercially viable. The difficulty with secrets is keeping them secret. The potential for leakage of commercial secrets is great. In the course of the life of an average trade secret, it may have to be disclosed to employees, agents, licensees, franchisees, assignees, buyers, suppliers, and joint venturers. The vital question is whether the law can help the firm to keep its secrets. The answer is a qualified yes. Copyright 99

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and registered designs law are probably not suitable because they do not protect ideas or information per se, only the form in which they are expressed. However, in certain circumstances, the law will impose a duty upon persons not to disclose secrets without authorisation. This area of the law is called the law relating to confidential information. The law of confidential information covers both private and business secrets. This chapter is only concerned with business or trade secrets.

Elements of Breach of Confidence 3.3 The initial step in an action for breach of confidence is to establish the information in question with some degree of specificity. It is not sufficient simply to claim that some unspecified information is confidential: Smith Kline & French Laboratories (Australia) Ltd v Secretary, Department of Community Services and Health.1 Once the information has been specified, there are three elements that must be proved in order to succeed in an action for breach of confidence: see Coco v A N Clark (Engineers) Ltd.2 1. Is the information of a confidential nature? 2. Was the recipient under an obligation not to disclose or use the information? 3. Has the recipient used or disclosed the information without permission or is there a real likelihood of that occurring?

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Step 1: Is the information of a confidential nature? 3.4 The first requirement set out in Coco v A N Clark (Engineers) Ltd3 is that the information must be of a confidential or secret nature. This means that: • the information must be secret in the sense of not being ‘public property or public knowledge’; • the information must have some commercial importance or value; • the plaintiff must have treated the information as confidential; and • the information must go beyond what the law regards as employee know-how. Provided these elements are satisfied, it is not necessary that the information relate to any particular matter, or be fully developed, or take any particular form.4 The information may be in written form or it may be merely oral: see Fraser v Thames Television Ltd.5 Unlike patents, which apply only to certain inventions, all secrets

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[1989] FCA 384. (1968) 1A IPR 587; [1969] RPC 41, see 3.28C. (1968) 1A IPR 587; [1969] RPC 41, see 3.28C. Talbot v General Television Corporation Pty Ltd [1980] VR 224; [1981] RPC 1. [1984] QB 44; [1983] 2 All ER 101, see 3.12C.

Chapter 3: Protecting Commercial Secrets

with a commercial value, including discoveries of pure knowledge, may be protected as confidential information.

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A. Has the information become part of public property or knowledge? 3.5 The test for whether information is public property or public knowledge is not as stringent as the test for novelty under patent law. The mere fact that information has appeared in some publication somewhere in the world will not necessarily destroy confidentiality, although it will destroy novelty for a patent. The key question is whether the information is known within the relevant trade or industry. The relevant trade or industry includes all those persons from whom the plaintiff is most likely to wish to withhold access to the information. If the information is known to the relevant trade or industry, then it is publicly known, even if the public at large remains in ignorance. Normally information contained in a patent application is not confidential: Maggbury Pty Ltd v Hafele Australia Pty Ltd. 6 Conversely, if the information is not known within the relevant trade or industry, then it may be confidential even though it is known to other persons within the wider community. In Australian Football League v The Age Co Ltd7 the names of AFL players who had tested positive for illicit drugs were held to be confidential even though the players’ names had been published on the internet. In appropriate circumstances the law may protect information based on publicly available data, provided the plaintiff has spent time, money, and effort in collecting, collating, and packaging the data. The confidentiality lies not in the raw data, but in the selection and compilation of information. This means that information may still be confidential even though the information is available from public sources, provided that a person wishing to duplicate the information would have to expend considerable time and expense in locating, selecting, and collating the raw data: see Saltman Engineering Co Ltd v Campbell Engineering Co Ltd.8

B. Does the information have commercial value? 3.6 The information must have some commercial value. The courts will not grant an injunction to protect trivial matters. However, the value does not have to be great. Many innovations which lack the necessary level of ingenuity and creativity to qualify as patentable inventions are sufficiently original to sustain an action for a breach of trade secrets. It has been intimated that a breach of confidence action could lie in the publication of unauthorised photographs of a celebrity.9 A trade 6 7 8 9

(2001) 210 CLR 181; 185 ALR 152; 53 IPR 1; [2001] HCA 70. See also O’Mustad & Son v S Allcock & Co Ltd [1963] 3 All ER 416; [1963] RPC 41. (2007) 15 VR 419. [1963] 3 All ER 413, see 3.11C. Candy v Bauer Media Ltd [2013] NSWSC 979.

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secret may lie in merely a ‘significant twist or slant to a well-known concept’.10 However, a mere flight of fantasy or a matter of trivia will not be sufficient.

C. Has the information been treated as confidential? 3.7 The plaintiff must be able to demonstrate that the confidentiality of the information was important to them: Thomas Marshall (Exports) Ltd v Guinle.11 This is done by establishing that procedures were in place to protect the secrecy of the information. If a plaintiff fails to take steps to protect information, a court may conclude that the information was not confidential because the plaintiff did not appear to treat it as important or confidential: see Faccenda Chicken Ltd v Fowler12 and Fractionated Cane Technology Ltd v Ruiz-Avila.13 A plaintiff will be more likely to convince a court that the information is of a confidential nature if: • the information is marked ‘confidential’; • access to the information is restricted and those made privy to the information are put under an express obligation of confidence; and • individuals dealing with the information have been warned that the information must be kept secret.

D. Does the information go beyond employee know-how?

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3.8 It is necessary to distinguish between information which forms part of the employee’s stock of general information, skill, and experience (known as ‘subjective knowledge’) and information which an employee of ordinary honesty and intelligence would regard as the property of the employer (‘objective knowledge’). Employee know-how (subjective knowledge) will not be protected as confidential information by the courts. That is, the ex-employee can use subjective knowledge, but objective knowledge remains the ‘property’ of the employer. The distinction between a trade secret and know-how is further discussed in 3.20. Ansell Rubber Co Pty Ltd v Allied Rubber Industries Pty Ltd [1967] VLR 37 3.8C1

Facts: Ansell produced rubber gloves using technology which had been partly revealed in a patent specification and partly kept secret. The information kept secret was based on known engineering principles. Ansell ensured that its employees were aware of the confidentiality of the machinery. It also restricted access to its factory to authorised personnel only. Two employees — an engineer and a fitter — left Ansell and set up in competition using machinery built by themselves from their own skills, but also utilising the technology they had learnt while in the employ of the plaintiff. Ansell sought an injunction for breach of confidential information.

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Talbot v General Television Corporation Pty Ltd [1980] VR 224; [1981] RPC 1. [1979] Ch 227; [1978] 3 All ER 193, see 3.13C1. [1987] Ch 117; (1985) 6 IPR 155; [1986] 1 All ER 617, see 3.19C2. [1988] 2 Qd R 610; (1988) 13 IPR 609.

Chapter 3: Protecting Commercial Secrets Decision: It is necessary to distinguish between the employee’s subjective knowledge and objective knowledge which remains the property of the employer. Objective knowledge may be anything that is not publicly known or, at least, not known fully. Gowans J listed the following factors (not being an exhaustive list) as being important in determining whether information has the necessary quality of confidence: • the extent to which information is known outside of the employer’s business; • the extent to which it is known by employees and others involved in the business; • the extent of measures taken by the employer to guard the secrecy of the information; • the value of the information to the employer and to competitors; • the amount of effort or money expended by the employer in developing the information; and • the ease or difficulty with which the information could be properly acquired or duplicated by others. The design, construction and operation of Ansell’s machinery were not known in full. That secrecy gave the plaintiff a commercial advantage. The secret information went beyond the employee’s subjective knowledge and, therefore, the court awarded an injunction.

Leica Geosystems Pty Ltd v Koudstaal (No 3) (2014) 109 IPR 1; [2014] FCA 1129 Facts: Leica sells software products and services to the mining industry. Koudstaal was employed by Leica as a software engineer until 3 November 2011. On 7 November 2011 he commenced employment with a competitor company. Shortly before he left Leica, Koudstaal copied material, including software source code and lists of which version of software each customer was using for each Leica product, to an external hard drive. Leica sued for copyright infringement and breach of confidence.

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Decision: The material was of a confidential nature and Koudstaal was subject to a duty of confidence with respect to his access of it. The volume and complexity of the material taken negated a finding that it was employee knowhow or part of his general knowledge. This was supported by the fact that it was downloaded during Koudstaal’s final days of employment. The court granted an injunction requiring Koudstaal to deliver up the confidential material in his possession.

E. Common examples of trade secrets 3.9 As a trade secret may relate to anything of commercial value, it is not possible to draw up an exhaustive list. Nevertheless, some of the more common materials that have been held to be trade secrets include: • research and development material; • industrial products and processes; • new product ideas; • marketing information; and • customer lists. 103

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i. Research and development material 3.10 By its very nature, research and development will generate new ideas, new solutions, and new ways of utilising data. Some of these ideas may crystallise into patentable inventions, but much of the information generated by research and development remains part of the background mosaic upon which new products and processes are built. This information is valuable and the courts will protect its secrecy, provided it goes beyond an employee’s subjective knowledge.

ii. Industrial products and processes 3.11 There are many cases where the courts have protected the design of a product, provided the product was not available to the public. Tools, dies, and machines designed to produce other products are obvious examples of potentially confidential information: see also Mense & Ampere Electrical Manufacturing Co Pty Ltd v Milenkovic.14 Saltman Engineering Co Ltd v Campbell Engineering Co Ltd [1963] 3 All ER 413

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3.11C

Facts: Saltman was the owner of certain drawings of tools for the manufacture of leather punches. Campbell was a manufacturing company. During negotiations between the parties, the drawings were delivered to Campbell. Although no contract eventuated, Campbell retained the drawings and used them to make tools for the manufacture of punches. Saltman sued for a breach of confidence. Decision: The court decided that this was a case where an obligation of confidence arose and should be enforced. It was true that the defendant could perhaps have developed the tools by having an engineer look at the punches. This, however, did not justify the defendant dispensing with the need to spend the necessary time, money, and effort required for such independent development by copying the plaintiff’s drawings. Campbell ‘knew that those drawings had been placed in their possession for a limited purpose, namely, the purpose only of making certain tools in accordance with them, the tools being tools required for the purpose of manufacturing leather punches’. The court granted an injunction.

Industrial processes have also been the subject of many successful applications. In Cranleigh Precision Engineering Ltd v Bryant,15 an injunction was granted to prevent the plaintiff’s former managing director utilising the plaintiff’s process for erecting above-ground swimming pools. Recipes and formulae have also been protected.16 However, if a local patent application has been made in respect of the new product or process, the idea is generally no longer confidential, as details of the

14 [1973] VR 784, see 3.17C2. 15 [1964] 3 All ER 289; [1965] 1 WLR 1293; [1966] RPC 81, see 3.19C3. 16 Weston v Hemmons (1876) 2 VLR (E) 121; Crowder v Hilton [1902] SALR 82.

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product or process are publicly disclosed in the patent application: Maggbury Pty Ltd v Hafele Australia Pty Ltd.17

iii. New product ideas 3.12 Until a new product actually appears in the market, there is value in keeping it a secret. This applies from the time the new product is first thought of, to the time that it is ready for release. In appropriate circumstances, the courts will protect new product ideas even though the idea is still at an evolutionary stage: see Krueger Transport Equipment Pty Ltd v Glen Cameron Storage & Distribution Pty Ltd.18 Any injunction granted will probably be limited to the period prior to release. Fraser v Thames Television Ltd [1984] QB 44; [1983] 2 All ER 10119 Facts: In 1973 three female actors formed a rock group. Fraser was their manager and song writer. Together they conceived the idea for a TV show based partly on fact and partly on fiction. They took the idea to Thames Television and eventually signed a contract. The idea for the TV show was never written down and at all relevant times remained purely oral. Thames utilised a term in the contract to exclude Fraser and the other three plaintiffs, and hired four new actors to play the parts in the TV show which was called The Rock Follies. The show was reasonably successful. Fraser and the others sued for breach of contract and breach of confidence. Decision: An oral idea may qualify as a trade secret, provided the plaintiff can establish that the occasion of communication was confidential and the content of the idea was clearly identifiable, original, of potential commercial attractiveness, and capable of being realised in actuality. Thames Television was held to be in breach of confidence.

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iv. Marketing information 3.13 A new advertising concept could amount to a trade secret, although the secret would be lost once the idea was put into practice.20 The results of a questionnaire or survey could amount to a trade secret.21 Information concerning new product releases, product prices, product performance, details of contractual negotiations, and even details of suppliers, is capable of amounting to confidential information in appropriate circumstances.

17 18 19 20

(2001) 210 CLR 181; 185 ALR 152; 53 IPR 1; [2001] HCA 70. (2008) 78 IPR 262; [2008] FCA 803, see 4.18C1. See also Talbot v General Television Corporation Pty Ltd [1980] VR 224; [1981] RPC 1. Wheatley v Bell [1982] 2 NSWLR 544; (1982) 1A IPR 613 (a case involving a teledex which listed local tradespeople). 21 Interfirm Comparison (Australia) Pty Ltd v Law Society of NSW [1975] 2 NSWLR 104; (1975) 5 ALR 527; [1977] RPC 137.

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Thomas Marshall (Exports) Ltd v Guinle [1979] Ch 227; [1978] 3 All ER 193 3.13C1

Facts: Thomas Marshall (Exports) Ltd imported goods from communist Eastern Europe and from South East Asia. Guinle used contacts in Eastern Europe and Asia, which he had acquired as managing director of Thomas Marshall, to build up his own business. Thomas Marshall complained that Guinle had utilised its trade secrets and sought an injunction. Decision: Megarry VC said: Even in the Eastern European countries with state monopolies, a knowledge of the particular officials with whom business can most satisfactorily be done may be an important and confidential matter; and in the Far East, with many rival sources of supply, a detailed knowledge of the cheapest, most reliable and most efficient sources must be something that a skilled buyer would firmly keep to himself as a valuable asset. The court granted an interim injunction.

Contrast: Moorgate Tobacco Co Ltd v Philip Morris Ltd (No 2) (1984) 156 CLR 414; 56 ALR 193; 3 IPR 545

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3.13C2

Facts: Philip Morris (PM) held the Australian licence to produce Kent cigarettes. It also held the licence to produce one of Kent’s competitors, Marlboro cigarettes. The licensor discussed with PM the introduction of a new mild cigarette to be called Kent Golden Lights, which were already on the market in the US. In 1977, PM’s licence came to an end and was not renewed because the licensor was about to sell its tobacco business to Moorgate, which was a competitor of PM. Moorgate wished to market the Kent brand in Australia itself. PM already marketed another cigarette in Australia called Marlboro Lights. There were a number of tobacco products using the name ‘Golden’. PM registered the name ‘Golden Lights’ under the Trade Marks Act and commenced to use it for Marlboro cigarettes. Moorgate claimed that it owned the Australian rights to the name ‘Kent Golden Lights’ and, therefore, had a right to stop PM using the name ‘Golden Lights’. Moorgate claimed an injunction against PM on a number of grounds, including breach of confidence. Decision: The High Court refused to grant an injunction. According to the court ‘there was nothing in the evidence nor in the nature of that information that established that it was regarded by [the licensor] as confidential or that it was, in fact, confidential’. It was the type of general information that a licensor would make known to a potential licensee, even where, as in this case, the licensee produced a competing product.

In Faccenda Chicken Ltd v Fowler,22 the court refused to stop the plaintiff’s former manager from utilising the plaintiff’s successful marketing strategy for selling fresh chickens or from approaching the plaintiff’s customers.

v. Customer lists 3.14 One of the most commonly litigated types of confidential information deals with customer lists and business connections. Generally speaking, customer lists 22 [1987] Ch 117; (1985) 6 IPR 155; [1986] 1 All ER 617, see 3.19C2.

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will fall into the category of employee know-how and can only be protected by a valid restraint of trade clause: see 3.31–3.38; Metrans Pty Ltd v Courtney-Smith.23 However, if the customer list lies at the heart of the business and was difficult to acquire, or the list of potential customers is very small, it may amount to a trade secret. For this to be the case, the list has to be more than just a list of names and addresses. It must contain some special element that a reasonable person would recognise as belonging to the employer. Information that has been ‘constructed solely from materials in the public domain’, to which ‘the skill and ingenuity of the human brain’ has been applied can be treated as confidential.24

F. Privacy and breach of confidence 3.15 There is a strong connection between the action for breach of confidence and notions of privacy. Because Australian law has generally been reluctant to recognise a tort of privacy, the action for breach of confidence is often a plaintiff’s best option. However, breach of confidence and breach of privacy are not exactly the same. A matter may be public knowledge, even though its publication amounts to what most people would regard as an invasion of privacy. For example, in the UK the actor Gordon Kaye, who had been seriously injured and disfigured in a car accident, was not able to stop the unscrupulous publication of photographs taken of him in his hospital bed.25 The High Court considered the issue of information privacy in the following case.

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Australian Broadcasting Corp v Lenah Game Meats Pty Ltd (2001) 208 CLR 199; 185 ALR 1; [2001] HCA 63 Facts: Lenah Game Meats (Lenah) operated an abattoir in Tasmania. Lenah had a licence from the Tasmanian Government to kill and skin possums for export. An animal rights group infiltrated the abattoir and filmed the operation. The film was then provided anonymously to the ABC. The ABC was not connected with the unlawful entry to Lenah’s property, although it was clear in the circumstances that the film had probably been illegally taken. The ABC intended to use the film as part of its current affairs program. Lenah objected and sought an injunction to prevent the ABC using the film. The problem for Lenah was on what grounds could it be entitled to an injunction? Amongst other arguments, including confidential information, Lenah claimed that, by showing the film, the ABC would be breaching Lenah’s right to privacy. The matter was heard by the High Court. Decision: The High Court considered whether there exists a tort of invasion of privacy under Australian law, but ultimately rejected the arguments made by Lenah. There was no cause of action and if Australia did have a tort of privacy this was not an example. The information, though shocking in visual form, was hardly a trade secret. The fact that Lenah was killing possums was public knowledge.

23 (1983) 1 IPR 185. 24 Del Casale v Artedomus (Aust) Pty Ltd (2007) 73 IPR 326 at 346. 25 Kaye v Robertson [1991] FSR 62.

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Step 2: Was there an obligation of confidence? 3.16 In order to satisfy the second element of the test laid down in Coco v A N Clark (Engineers) Ltd,26 the information must be revealed or learnt in circumstances which impose a duty upon the recipient not to disclose or otherwise use the information. This means that the information must have been disclosed or acquired in confidence or good faith. The duty may have been expressly created or implied from the circumstances of the case. According to the court in Coco v A N Clark (Engineers) Ltd, if a reasonable person standing in the shoes of the recipient would have realised that the information was being given in confidence, then the recipient is under a duty not to disclose or use that information without permission. A reasonable person is a person of ordinary intelligence and honesty: see Deta Nominees Pty Ltd v Viscount Plastic Products Pty Ltd.27 Some understanding of the creation of the duty not to disclose or use confidential information can be gleaned by looking at examples of typical situations in which the duty is created. The following persons are often under a duty of confidence: • consultants and professional advisers; • employees and agents; • ex-employees; • directors; • joint venturers, including partners; • licensees; and • assignors. An obligation of confidence also arises where the information is acquired through industrial espionage.

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A. Consultants and advisors 3.17 The distinction between an employee and a consultant was discussed in the context of patents: see 2.39. The same principles apply here. As with patentable inventions, the initial question to decide is whether the right to control dissemination of the information lies with the employer or the consultant — who ‘owns’ the information?28 Where the idea or information clearly emanates from the employer, the employer is undoubtedly the ‘owner’. But what happens when the idea comes from the consultant in the course of discharging his or her duties under the consultancy agreement?

26 (1968) 1A IPR 587; [1969] RPC 41, see 3.28C. 27 [1979] VR 167, see 3.17C1. 28 It is not strictly correct to talk about owning information. No one can own information, except in the limited sense of the Patents Act. The law of confidential information does not protect information per se, but rather the plaintiff’s right to keep it secret.

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Deta Nominees Pty Ltd v Viscount Plastic Products Pty Ltd [1979] VR 167 Facts: Deta Nominees Pty Ltd (Deta) designed, manufactured, and sold furniture. It had put considerable research into developing a strong but cheap plastic drawer for use in massproduced furniture. Viscount was a professional tool designer. Deta hired Viscount to make a tool (a pair of dies) for the production of drawers. As Deta’s idea was new, no such tool existed. Comprehensive discussions took place between the parties. Viscount contributed some novel suggestions which were incorporated into the ultimate design. Viscount then produced the necessary dies. The consultancy contract stipulated that Viscount was not to design or build a similar tool for anyone else within certain tolerances. A dispute arose and the question to be answered by the court was whether Deta or Viscount owned the concept. Without advising Deta, Viscount had taken out a patent over the tool.

3.17C1

Decision: The court decided in favour of Deta. Viscount was in the business of designing tools under contract and had been specifically hired to produce the tool in question. Although the contribution made by Viscount contained an ingenious or inventive step, Viscount had been adequately remunerated under the agreement. The idea belonged to Deta. The court decided that Viscount held the patent in trust for Deta.

Once it is clear that the information is of a confidential nature and ‘belongs’ to the employer, the consultant or contractor is under an obligation not to disclose that information without authority. The courts are quite prepared to imply the obligation if the agreement is silent on the point. Mense & Ampere Electrical Manufacturing Co Pty Ltd v Milenkovic [1973] VR 784

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Facts: The defendant, Milenkovic, was hired to produce a die for making the plaintiff’s nylon electrical plugs. The plaintiff already had a die it had designed itself, but it was unsatisfactory in that it did not automatically eject the finished plugs. In the course of producing the new die, the defendant was shown the design of the original die and had the process of manufacturing the plugs fully explained to him, including the type of nylon used. Without permission, the defendant took this information and started producing plugs in competition with the plaintiff. Decision: The court granted an injunction. The information had the necessary level of confidentiality about it, although it would not be sufficient for a patent. There was an implied term in the contract between the parties that Milenkovic would not use the plaintiff’s trade secrets for his own advantage.

The wise manager should require all consultants and contractors who are likely to receive confidential information to sign a document acknowledging that the information is confidential and not to be disclosed without authority. Professional advisers, such as lawyers, accountants, bankers, and stockbrokers, also owe a duty of confidence.

B. Employees 3.18 The majority of cases involving trade secrets have involved leakage or use by employees or ex-employees. It is inevitable that some employees will become 109

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privy to their employer’s secrets. The employee may even have been instrumental in the creation of the secret information. While still in employment, employees owe a duty of good faith to their employer. The duty is fairly strict. The employee is not permitted to act to the detriment of the employer’s interests, unless it is in the public interest. This means that employees are not permitted to solicit the employer’s customers or to deliberately disclose, copy, use, or memorise for later use the employer’s secrets, whether or not the secrets would be regarded as trade secrets for the purpose of the law of confidential information. Hivac Ltd v Park Royal Scientific Instruments Ltd [1946] Ch 169; [1946] 1 All ER 350 3.18C1

Facts: Hivac manufactured valves for hearing aids. The defendant, Park Royal, secretly set up in competition with Hivac, using the skills and knowledge of some of Hivac’s employees who worked for Park Royal in their spare time. Hivac sought an injunction against the employees and Park Royal to stop the employees working for Park Royal. Decision: The court granted an interim injunction. Although the employees had not used Hivac’s confidential information and although they were acting in their spare time, they had breached their duty of good faith because they knew or ought to have known that their activities were likely to damage Hivac’s business. (The normal remedy in a case such as this would be dismissal of the employee and damages. However, the matter occurred during wartime and dismissal was not an option.)

Robb v Green [1895] 2 QB 315

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3.18C2

Facts: Green was employed as the manager of Robb’s business. During the course of his employment, he surreptitiously copied a list of Robb’s customers for the purpose of using the information after he left Robb’s employment. Robb sought damages and an injunction to prevent Green from using the list. Decision: Green’s actions were a breach of his contractual duty of good faith. The court ordered damages, delivery up of the infringing list, and an injunction to prevent Green from making use of the information on the list.

As subsequent cases have shown, Green could probably have successfully defended an application for an injunction if he had waited until after the termination of his employment and then made the list from memory.29 If an employee has breached the obligation of good faith, the law is quite severe in its remedies. Any employee who makes a personal profit by taking advantage of information properly belonging 29 This point was made by Maugham LJ in Wessex Dairies Ltd v Smith [1935] 2 KB 80. There are, however, exceptions for highly specialised technical information: see, for example, Nexus Adhesives Pty Ltd v RLA Polymers Pty Ltd (2012) 97 IPR 160; [2012] FCAFC 135.

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to the employer can be ordered to pay those profits to the employer, even if the employer has not lost anything by the employee’s actions.30 This remedy is known as an account of profits and can also be sought where there has been infringement under intellectual property statute.31 The Corporations Act 2001 (Cth) imposes similar obligations on employees of corporations. They must not improperly use any information acquired in their capacity as an employee to gain a personal advantage or cause detriment to the corporation: see ss 182 and 183.

C. Ex-employees 3.19 Once the employment has terminated, the ex-employee is not under the same strict duty of good faith. However, even after the termination of employment, the ex-employee is not permitted to: • divulge or utilise the employer’s confidential information (trade secrets); or • exploit know-how which is protected by a valid restraint of trade clause: see 3.37. The employer’s confidential information — objective knowledge (see 3.8) — cannot be used by the ex-employee without permission. Know-how — subjective knowledge — can be used by the ex-employee unless it is the subject of a valid restraint of trade clause (see 3.31–3.39). How do the employer and the employee distinguish between objective and subjective knowledge?

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Printers & Finishers Ltd v Holloway (No 2) [1964] 3 All ER 731; [1965] RPC 239 Facts: Holloway was the manager of the plaintiff’s printing factory. By virtue of his position in the company, Holloway was necessarily privy to certain secret processes that the company used in its business. Before leaving his employment to take up work with a competitor of the plaintiff, Holloway made copies of certain secret information for later use in the competitor’s business. The plaintiff sought an injunction to prevent Holloway disclosing or using the information. Decision: During his employment Holloway had clearly breached his employment contract by acting contrary to the plaintiff’s interests. Although Holloway no longer worked for the plaintiff, the court was prepared to grant an injunction to prevent him disclosing his exemployer’s secret processes because those secret processes went beyond what an employee could treat as know-how. If the information in question can be fairly regarded as a separate part of the employee’s stock of knowledge, which a man of ordinary honesty and intelligence would regard to be the property of his old employer and not his own to do with as he likes, then the court, if it thinks that there is a danger of the information being used or disclosed by the ex-employee to the detriment of the previous employer, will do what it can to prevent that result by granting an injunction.

30 Green & Clara Pty Ltd v Bestobell Industries (1982) 1 ACLC 1. 31 Copyright Act 1968 s 115(2), see 4.69; Designs Act 2003 s 75, see 5.26; Patents Act 1990 s 122(1), see 2.54.

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Contrast: Faccenda Chicken Ltd v Fowler [1987] Ch 117; (1985) 6 IPR 155; [1986] 1 All ER 617 3.19C2

Facts: Faccenda operated a business selling fresh chickens. Fowler, the sales manager of Faccenda, implemented a successful marketing scheme whereby the chickens were sold from refrigerated vans, each travelling a defined route and servicing particular customers. As a result, each driver acquired extensive knowledge of his customers, including the amount and quality of the chickens purchased and the prices paid. Fowler quit Faccenda and went into operation for himself. He used the same scheme as he had developed at Faccenda, including the same areas, customers, and so on. He also hired eight former employees of Faccenda, including five drivers. Fowler had not signed any restraint of trade covenant. The evidence suggested that Faccenda had not taken any great steps to keep the information confidential. Faccenda sued for breach of contract.

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Decision: The court found in favour of the defendant, Fowler. Fowler was free to compete with Faccenda Chicken Ltd and to solicit its customers. In doing so, he was permitted to use his ‘own knowledge of the whereabouts and requirements of those customers, the prices they have been paying, and the routes by which they are conveniently visited’. In the circumstances, this information fell into the category of know-how, rather than confidential information.

A former employee can be prevented from soliciting the ex-employer’s customers by requiring the employee, at the time of hiring, to sign a non-solicitation agreement.32 It is often difficult to distinguish between know-how and trade secrets. In deciding any given case, the court will look at all relevant evidence, including: • the nature of the information — the courts have shown a willingness to protect certain types of information imparted to employees, such as details of inventions: see Ansell Rubber Co Pty Ltd v Allied Rubber Industries Pty Ltd33 and Cranleigh Precision Engineering Ltd v Bryant;34 and a reluctance to protect other types of information imparted to employees, such as customer lists: see Faccenda Chicken Ltd v Fowler;35 • the commercial importance of the information; and • the extent to which the employer seeks to keep the information secret by, for example, restricting access to files,36 marking files ‘confidential’, restricting access to machinery (Ansell Rubber Co Pty Ltd v Alllied Rubber Industries Pty Ltd),37 and requiring employees to sign ‘acknowledgments of confidentiality’. If the information is a trade secret, an employee is not relieved of the obligation of confidence merely because the employee created the secret. 32 33 34 35 36 37

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Barrett v Ecco Personnel Pty Ltd [1998] NSWCA 30. [1967] VLR 37, see 3.8C1. [1964] 3 All ER 289; [1965] 1 WLR 1293; [1966] RPC 81, see 3.19C3. [1987] Ch 117; (1985) 6 IPR 155; [1986] 1 All ER 617, see 3.19C2. Warman International Ltd v Envirotech Australia Pty Ltd (1986) 67 ALR 253; 6 IPR 578; (1986) ATPR 40-714. [1967] VLR 37, see 3.8C1.

Chapter 3: Protecting Commercial Secrets

Cranleigh Precision Engineering Ltd v Bryant [1964] 3 All ER 289; [1965] 1 WLR 1293; [1966] RPC 81 Facts: While acting as managing director of Cranleigh Precision Engineering Ltd (Cranleigh), Bryant learnt about a Belgian patent for constructing swimming pools. He also developed two innovations which greatly improved the Belgian invention. Following a dispute, Bryant left Cranleigh and set up his own business. He acquired the British rights to the Belgian patent and commenced marketing the Belgian product, incorporating his own innovations. Cranleigh sought an injunction on the basis of a breach of confidence. Decision: The court held that both the information concerning the Belgian patent and the two innovations created by Bryant were trade secrets of Cranleigh. Bryant was under a duty not to use or disclose this information. The court granted a number of injunctions restraining Bryant from using or disclosing the confidential information.

D. Company directors 3.20 A non-executive director of a company is not an employee of the company, but nevertheless owes a duty of good faith to the company as a result of the fiduciary relationship between the director and the company. A director, therefore, owes a duty not to use the company’s trade secrets for his or her own profit.38 The duty is quite strict. This duty is also imposed by the Corporations Act 2001 (Cth).39 A director who makes a personal profit by taking advantage of information properly belonging to the company can be ordered to pay those profits to the company, even if the company has not lost anything by the director’s actions.40

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E. Joint venturers 3.21 A joint venture is a contractual arrangement, whether a partnership or not, by which two parties agree to perform some commercial undertaking together. Obviously such an arrangement depends on the respective parties exhibiting a high level of good faith and fairness. Joint venturers owe a duty of good faith to one another. Therefore, where a trade secret is learnt within the confines of a joint venture relationship, the courts will readily imply a duty on the recipient not to disclose or use the information without permission: see Coco v A N Clark (Engineers) Ltd.41

F. Licensees 3.22 The ‘owner’ of confidential information may license others to use it. Once the licence is granted, the licensor still has a vested interest in ensuring that the 38 Cook v Deeks [1916] 1 AC 554; [1916–17] All ER Rep 285; Thomas Marshall (Exports) Ltd v Guinle [1979] Ch 227; [1978] 3 All ER 193, see 3.13C1; Boston Deep Sea Fishing & Ice Co v Ansell (1888) 39 Ch D 339; [1886–90] All ER Rep 65. 39 Corporations Act 2001 s 183. 40 Green v Bestobell Industries Pty Ltd (1982) 1 ACLC 1. 41 (1968) 1A IPR 587; [1969] RPC 41, see 3.28C.

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licensee treats the confidential information strictly according to the terms of the licence. The licence must be carefully drawn to protect the licensor’s interests.

G. Assignors 3.23 An assignment presents slightly different problems to a licence. Once the information has been assigned, it is the assignee that has an interest in ensuring that the assignor does not reveal or use the confidential information to the detriment of the assignee. Many a sale of business will involve a transfer of confidential information as part of the transfer of goodwill. The value in the information will be lost if the assignor is permitted to make unauthorised use of it. Therefore, as a matter of good practice, every assignment ought to include a clause restraining the assignor from using or disclosing the trade secrets without authority. Even if the assignment does not contain an express duty of confidence, the courts will probably imply one as a matter of business efficacy. If the assignor breaches this express or implied duty, the assignee will be entitled to damages, and an injunction to prevent further disclosure, and also an injunction preventing any third party deriving the information from the assignor from using such information.

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H. Potential licensees and assignees 3.24 It is obvious that a potential assignee or licensee of a trade secret will want to know the nature and content of the secret prior to concluding any agreement. The ‘owner’ of the trade secret thus runs the risk that the potential assignee or licensee will misuse the information. Assignors and licensors must be careful to ensure that the recipients of confidential information are aware that they are receiving matter of a confidential nature and that use and dissemination of the information is strictly controlled. The best way to achieve this result is to require the recipients to sign an ‘acknowledgment of confidentiality’ before receiving the information. Although the acknowledgment may not have any contractual force, it will aid the plaintiff in convincing a court that the recipient was under a duty not to disclose. Even if the potential assignee or licensee does not sign anything, a duty of confidence may arise in any event by way of implication. Ultimately the question is whether a person of reasonable honesty and intelligence would have recognised the subject matter as being confidential information belonging to the plaintiff. This does not mean that the recipient must deliberately ‘steal’ the information — the copying could be accidental or subconscious.42

42 Talbot v General Television Corporation Pty Ltd [1980] VR 224; [1981] RPC 1.

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Seager v Copydex Ltd [1967] 2 All ER 415; [1967] 1 WLR 923; [1967] RPC 349 Facts: Seager was an inventor who invented and patented a carpet grip called ‘Klent’. He also invented, but did not patent, an alternative carpet grip called ‘Invisigrip’. The defendant company wished to market the ‘Klent’ grip. During negotiations between the plaintiff and two officers of the defendant corporation, the plaintiff explained the ‘Invisigrip’. When negotiations broke down, the defendant produced a carpet grip which was remarkably similar to the plaintiff’s unpatented grip. The defendant called the grip ‘Invisigrip’. The defendant claimed that its grip was the result of its own ideas and was not derived from any information given to it by Seager. Seager sought an injunction and other remedies.

3.24C

Decision: At first instance the judge dismissed the plaintiff’s application. On appeal the English Court of Appeal accepted that the defendant believed the idea was its own, but held that it must have subconsciously copied from Seager — the coincidences were too great to permit of any other explanation. Judgment was granted in favour of the plaintiff. However, the court refused to grant an injunction or an account of profits. Instead damages were awarded as the appropriate remedy. The damages were to be assessed on the basis of reasonable compensation for the use of the confidential information that was given to the defendant.

Saltman Engineering Co Ltd v Campbell Engineering Co Ltd43 highlights the dangers faced by those forced to rely, at least partially, on others to exploit their unpatented inventions and innovations.

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I. Industrial fraud or theft 3.25 There is still some lingering doubt as to whether a person who obtains confidential information by fraud or theft is subject to the law of confidential information. The reason for this doubt is that the information was never disclosed in a situation of confidence. However, it would be absurd for the law to refuse a remedy in such circumstances. Consequently, it would appear that the owner of confidential information that is the subject of industrial espionage may obtain an injunction to prevent the use or disclosure of that information. Franklin v Giddins [1978] Qd R 72; (1978) 1B IPR 807 Facts: The plaintiff developed a new type of nectarine. The defendant entered the plaintiff’s orchard surreptitiously and took cuttings from the plaintiff’s trees. The cuttings were used by the defendant to produce the new variety that he then commenced to sell. When the plaintiff realised what had happened, he sought an injunction against the defendant on the grounds of a breach of confidential information. Decision: Dunn J granted the injunction, stating that: I find myself quite unable to accept that a thief who steals a trade secret, knowing it to be a trade secret, with the intention of using it in commercial competition with its owner, to 43 [1963] 3 All ER 413, see 3.11C.

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Marketing and the Law the detriment of the latter, and so uses it, is less unconscionable than a traitorous servant. The thief is unconscionable because he plans to use and does use his own wrong conduct to better his position in competition with the owner, and to place himself in a better position than that of a person who deals consensually with the owner.

Step 3: Has there been unauthorised use of the information? 3.26 To satisfy the third element of the test laid down in Coco v A N Clark (Engineers) Ltd,44 there must be an unauthorised disclosure or use of the information to the detriment of the ‘owner’. It is irrelevant that the particular person disclosing or using the information was not aware that he or she was not permitted to use the information: Seager v Copydex Ltd.45 A person obtaining confidential information is not allowed to use it as a springboard or head-start for activities detrimental to the owner of such information. For instance, a person will not be permitted to make use of a former employer’s trade secrets to get an unfair advantage in setting up a business in competition with the ex-employer.46 For an example of the defendant subconsciously copying the plaintiff’s secrets and thus obtaining a ‘springboard’, see Seager v Copydex Ltd,47 in which Lord Denning MR explained that it was not permissible to take information given in confidence and use it as a springboard to get a start over others in the market.

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Defence of Public Interest 3.27 It is a recognised defence to an accusation of breach of confidential information that disclosure of the information was in the public interest. As it is a defence, the onus of establishing it is upon the defendant. It should be noted that there is a difference between a matter of public interest and a matter interesting to the public. The latter is not a defence. Only serious matters such as fraud,48 medical safety, breaches of national security, and breaches of the law49 are covered by the defence. It is not sufficient to argue that the public has an interest in the truth being told.50

44 (1968) 1A IPR 587; [1969] RPC 41, see 3.28C. 45 [1967] 2 All ER 415; [1967] 1 WLR 923; [1967] RPC 349, see 3.24C. 46 Terrapin Ltd v Builders’ Supply Company (Hayes) Ltd (1959) 1B IPR 777; [1960] RPC 128. See also Cranleigh Precision Engineering Ltd v Bryant [1964] 3 All ER 289; [1965] 1 WLR 1293; [1966] RPC 81, see 3.19C3. 47 [1967] 2 All ER 415; [1967] 1 WLR 923; [1967] RPC 349, see 3.24C. 48 Gartside v Outram (1856) 26 LJ Ch 113; 5 WR 35. 49 Initial Services Ltd v Putterill [1968] 1 QB 396; [1967] 3 All ER 145, in which a former employee was justified in disclosing breaches of the Restrictive Trade Practices Act 1956 (UK). 50 Castrol Australia Pty Ltd v Emtech Associates Pty Ltd (1980) 33 ALR 31; (1980) ATPR 40-183.

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Lion Laboratories Ltd v Evans [1985] QB 526; (1984) 3 IPR 276; [1984] 2 All ER 417 Facts: The plaintiff, Lion Laboratories, manufactured breathalysers under licence from the British Home Office. A newspaper planned to print unauthorised copies of the plaintiff’s internal correspondence, which the newspaper had acquired from two ex-employees of the plaintiff. The correspondence was of a sensitive nature because it cast doubts on the reliability and accuracy of the breathalysers. The plaintiff sought an injunction to prevent publication of the correspondence. Decision: The Court of Appeal refused to grant an injunction. The Court considered that even though the information was confidential, it came within the defence of public interest. It was in the public interest that the confidential correspondence be released because the consequences were so serious if the breathalysers were inaccurate — citizens could be fined or imprisoned on the evidence of faulty breathalysers.

Remedies for Breach of Confidence

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3.28 In the majority of cases where disclosure of a trade secret is threatened, the plaintiff must move quickly to seek an injunction. This is the main remedy for breach of confidence, unless the information has become public knowledge. Where the defendant has used confidential information to obtain a ‘head-start’ and the information has subsequently become public knowledge, the courts are prepared to grant a limited injunction: Deta Nominees Pty Ltd v Viscount Plastic Products Pty Ltd.51 Other orders include: • damages, or an account of profits;52 • delivery up or destruction of documents (where appropriate); and • destruction of products (although this would be an extreme case).53 Damages or an account of profits awarded where a defendant used confidential information to develop a competing product will be based on the estimated time of the ‘head-start’: Nexus Adhesives Pty Ltd v RLA Polymers Pty Ltd.54 Where the plaintiff is not really in a position to exploit the secret and would probably have licensed it anyway, the court will normally refuse an injunction: see Coco v A N Clark (Engineers) Ltd55 and Seager v Copydex Ltd.56

51 [1979] VR 167, see 3.17C1. 52 Optus Networks Pty Ltd v Telstra Corporation Ltd (2010) 265 ALR 281; [2010] FCAFC 21. 53 Ansell Rubber Co Pty Ltd v Allied Rubber Industries Pty Ltd [1967] VLR 37, see 3.8C1; Ormonoid Roofing & Asphalts v Bitumenoids Ltd (1930) 31 SR (NSW) 347; 48 WN (NSW) 66. 54 (2012) 97 IPR 160; [2012] FCAFC 135. 55 (1968) 1A IPR 587; [1969] RPC 41, see 3.28C. 56 [1967] 2 All ER 415; [1967] 1 WLR 923; [1967] RPC 349, see 3.24C.

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Coco v A N Clark (Engineers) Ltd (1968) 1A IPR 587; [1969] RPC 41 3.28C

Facts: This was a hearing for an interim injunction. Coco designed a moped, which is a type of motor scooter. He then entered into negotiations for the production of the moped with an engineering company called A N Clark (Engineers). During negotiations Coco revealed the design to A N Clark. When negotiations broke down, A N Clark produced a moped which incorporated some of Coco’s ideas, although it also included some of its own developments. Coco claimed breach of confidential information and sought an interim and permanent injunction. Decision: Having set out the three elements for the action of breach of confidence, Megarry J decided that, while Coco had an arguable case for breach of confidence, an interim injunction should be refused because either damages or an account of profits would be sufficient compensation. A N Clark gave an undertaking to the court to pay a royalty per machine into a joint bank account pending the hearing of the case.

The courts will not grant an injunction if no useful purpose would be served by such an order. For example, no useful purpose would be served by granting an injunction where the trade secret has become public knowledge subsequent to the breach of confidence. However, the court may grant a temporary injunction, even where information has become, or is about to become, public knowledge, if the recipient would derive an unfair advantage, such as obviating the need to test a prototype.

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Trade Secrets and Third Parties 3.29 If some third person who is not a party to the confidential relationship receives confidential information, then that person may also be restrained by injunction from using the information or from disclosing it to another.57 Whether an injunction will be granted will depend on a variety of factors, including the extent to which the third party knew, or should have known, about the interest of the plaintiff, and whether the third party has provided any consideration for the information: Retractable Technologies Inc v Occupational and Medical Innovations Ltd.58 It is unlikely that damages will be awarded without notice against a bona fide purchaser for value. For example, where a third party obtains the confidential information without realising that the information belongs to another, the courts are highly unlikely to award damages against the third party. Although the court will probably not award damages, it may grant an injunction if appropriate.

57 Talbot v General Television Corporation Pty Ltd [1980] VR 224; [1981] RPC 1; Streetscape Projects (Australia) Pty Ltd v City of Sydney (2013) 295 ALR 760; 92 ACSR 417; [2013] NSWCA 2. 58 (2007) 72 IPR 58; [2007] FCA 545.

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In situations where an individual takes confidential information from a former employer and provides this to a subsequent employer who makes use of it, the new employer can also be liable for the breach of confidence.59

Comparing Patents and Trade Secrets 3.30 There are three principal differences between inventions that are the subject of a patent and those that are the subject of a trade secret: 1. Novelty, inventiveness or innovativeness, and lack of secret use are not necessary for trade secrets, as they are for a patent. 2. Trade secrets are protected not because of any public policy in encouraging inventions and innovations, but because of the desirability of preventing competitors from obtaining and using another’s secret information in circumstances where those secrets were disclosed in confidence. 3. Unlike patents, the law of trade secrets does not create a monopoly. Trade secrets cannot be used to prevent independent creation or reverse engineering. There has been a growing use of secrecy as an alternative to the patent system, mainly by firms involved in process innovation, rather than product innovation. This has been driven by the high costs of patenting (particularly the cost of conducting worldwide novelty searches) and by the need under patent law to make public disclosure. If the firm is reasonably confident that secrecy can be maintained, then ignoring the patent system makes sense. However, the firm should remember that if the matter comes before the courts, fighting a trade secrets case is still an expensive exercise.

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TABLE 3.1 COMPARISON BETWEEN PATENTS AND TRADE SECRETS60 PATENT

TRADE SECRET

Subject matter

Specific and limited by statute (includes machines, articles of manufacture, processes, and composition of matter)

Applies to a broad range of ideas and information

Requirements

Manner of manufacture Novel and inventive or innovative Useful Not secretly used

Must have some value Must not be generally known Must go beyond ‘know-how’

Public disclosure

Required

Any disclosure must be limited and controlled

59 Lifeplan Australia Friendly Society Ltd v Ancient Order of Foresters in Victoria Friendly Society Ltd [2017] FCAFC 74. 60 Adapted from J Pooley, Trade Secrets, Osborne/McGraw Hill, US, 1987, p 24.

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TRADE SECRET

Protection

Statutory monopoly Monopoly depends on ambit of claims made Can prohibit use by anyone else (including reverse engineering and parallel imports)

Varies depending on situation No protection against those who reverse-engineer or independently discover the secret Does not protect against parallel imports

Duration

Twenty years (standard patent) Eight years (innovation patent)

Unlimited — governed by ability to retain secrecy

Expense

Procuring registration Policing infringement

Protecting from unauthorised disclosure or use

Risk

Invalidity of patent May suggest ideas to competitors

Independent discovery or inadvertent disclosure

Marketability

Licensing relatively simple

Licensing more difficult and requires policing of licensee

Patents and trade secrets should not always be seen as alternatives — in many cases they have a complementary role to play. For example, patentable inventions often evolve out of a stratum of research which is best protected by secrecy, at least until the innovative ideas reach patentable form. Even where the research crystallises into a patentable invention, it will not be necessary to disclose all the research in the patent application.

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Restraint of Trade Clauses 3.31 A restraint of trade clause is a term in a contract by which a person agrees to refrain from some activity which he or she would otherwise be free to engage in: for examples see Nordenfelt v Maxim Nordenfelt Guns & Ammunition Co Ltd61 and Rentokil Pty Ltd v Lee.62 Such clauses are particularly common in many employment contracts.

When is a restraint clause valid? 3.32 In Nordenfelt v Maxim Nordenfelt Guns & Ammunition Co Ltd,63 the House of Lords held that a restraint of trade clause was only lawful if it was reasonable in all the circumstances. This is quite different to other contractual terms, which do not have to be reasonable to be enforceable. For example, there is no rule that a buyer has to pay a reasonable price for a product.

61 [1894] AC 535; [1891–4] All ER Rep 1, see 3.34C. 62 (1996) ATPR 41-451, see 3.35C1. 63 [1894] AC 535; [1891–4] All ER Rep 1, see 3.34C.

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Effectively the courts have only been prepared to accept restraint of trade clauses provided that the restraint is, in all the circumstances of the case, no more than is reasonably necessary to protect a legitimate interest of the person benefiting from the restraint. Normally this means that a restraint of trade clause must be strictly limited in aspects such as time, geographical area, and the range of activities restrained.

Contracts where restraint clauses are found 3.33 Restraint of trade clauses appear in all sorts of contracts, including: • sale of business agreements; • employment contracts; • consultancy agreements; • joint venture contracts; • licensing agreements; • contracts for the supply of goods and services; • leases; and • partnership agreements.

A. Sale of business agreements

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3.34 When a business is sold, the purchaser must take care to ensure that the vendor does not undermine the value of the goodwill sold by setting up a new business in competition. Therefore, it is quite common to find restraint clauses in a sale of business agreement. The clauses must be no wider than is reasonably necessary to protect the goodwill sold. Nordenfelt v Maxim Nordenfelt Guns & Ammunition Co Ltd [1894] AC 535; [1891–4] All ER Rep 1 Facts: Nordenfelt owned a business which manufactured guns, ammunition, and similar products. The business operated worldwide. Nordenfelt sold the business to the Maxim Nordenfelt Guns & Ammunition Co. The sale of business agreement contained the following clause: The said Thorsten Nordenfelt shall not during the term of twenty five years … . engage, except on behalf of the company, either directly or indirectly in the trade or business of a manufacturer of guns, gun mountings or carriages, gunpowder, explosives or ammunition, or in any business competing or liable to compete in any way with that for the time being carried on by the company, provided that such restriction shall not apply to explosives other than gunpowder … . Provided also that the said Thorsten Nordenfelt shall not be released from this restriction by the company ceasing to carry on business merely for the purpose of reconstitution or with a view to the transfer of the business thereof to another company so long as such other company taking a transfer thereof shall continue to carry on the same.

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Marketing and the Law Within the period of restraint Nordenfelt commenced a business of the same nature as the business sold. The covenantor brought an action for breach of contract. The case revolved around the issue of whether the restraint clause was valid. Decision: Covenants in restraint of trade are prima facie unenforceable. This is because the public has an interest in every person carrying on his or her trade freely. A covenant in restraint of trade would only be enforceable if it were reasonable as between the parties (that is, no wider than is reasonably necessary to protect the legitimate interests of the covenantee), and in the interests of the public. On the facts of this case, the restraint was valid, as it was reasonably necessary to protect the business the purchaser had acquired from Nordenfelt for an extremely large sum of money.

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B. Employment agreements 3.35 Employers must be careful not to make the restraint any wider than is strictly necessary to protect the employer’s legitimate interests. The employer has no legitimate interest per se in preventing an employee from competing with the employer. The employer, however, does have a legitimate interest in protecting trade secrets. Therefore, a clause that prevents the employee from using or disclosing the employer’s trade secrets is normally valid. An employer is also said to have a legitimate interest in protecting its goodwill, in the sense of its trade connections: Rentokil Pty Ltd v Lee.64 As with the action for breach of confidence, the difficulty is in distinguishing between employee know-how and the employer’s trade secrets. Know-how by itself cannot be protected by a restraint of trade clause. Therefore, an ex-employee would in most cases be entitled to use information regarding his or her ex-employer’s customers because that sort of information is normally regarded as know-how: see Digital Pulse Pty Ltd v Harris65 and Twenty-First Australia Inc v Shade.66 An employer cannot change know-how information into a trade secret merely by getting the employee to agree that it is a trade secret: IF Asia Pacific Pty Ltd v Galbally.67 Because it is difficult to distinguish between know-how and trade secrets, and because the employer should have some opportunity to protect itself against irreparable harm that could be done by a former employee, the courts generally permit limited ‘non-compete’ clauses; that is, restraint clauses where the employee agrees not to work in a similar capacity for a competitor of the employer after termination of his or her employment for a limited period of time within a limited geographical area. The courts also permit reasonable non-solicitation clauses. These rules are based on the proposition that employers may legitimately seek 64 65 66 67

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(1996) ATPR 41-451, see 3.35C1. (2002) 40 ACSR 487; [2002] NSWSC 33, see 3.39. [1998] NSWSC 325. [2003] VSC 192.

Chapter 3: Protecting Commercial Secrets

protection ‘for their business connection against the possibility of its being affected by the personal knowledge of, and influence over, the customers which the [employees] might acquire in their employment’.68 Rentokil Pty Ltd v Lee (1996) ATPR 41-451 Facts: Lee was employed by Rentokil in a marketing capacity. Her job involved contacting Rentokil’s existing sanitary hygiene and healthcare customers within a designated area and in establishing new customers. At all times Rentokil treated its customer information as highly confidential. Lee signed a ‘Non-competition Deed’ in which she agreed that upon termination of her employment she would not ‘carry on, be associated with or engaged or interested in’ any sanitary hygiene or healthcare business for a period of 12 months in South Australia (where she worked for Rentokil). She also agreed that she would not solicit any of Rentokil’s customers. Lee quit her employment with Rentokil and went to work with one of Rentokil’s main rivals, where she solicited Rentokil’s customers. Rentokil sought an injunction for breach of the Deed.

3.35C1

Decision: The restraint not to solicit Rentokil’s customers was unlimited as to time and, therefore, void. However, the restraint not to be involved in a competing business for 12 months in South Australia was valid. The 12-month period was valid because most of Rentokil’s customers were on two-year contracts and it took Lee about 12 months to visit each of Rentokil’s customers in her area. In all the circumstances, therefore, the restraint was reasonable.

Contrast:

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Transpacific Industries Pty Ltd v Whelan [2008] VSC 403 Facts: Whelan was employed by Transpacific Industries (TPI) as a landfill manager in its waste management business in Melbourne. TPI was also involved in waste management in other states of Australia, as well as in a wide range of other businesses, including importation and distribution of trucks and bus chassis, industrial cleaning, and facilities management. It also had energy and manufacturing divisions, which Whelan had never been involved in. Following a dispute, TPI and Whelan agreed that Whelan would leave TPI on agreed terms. One of the terms was that Whelan would agree to a restraint clause, in terms of which Whelan agreed, among other things, not to ‘undertake, carry on or be engaged in or concerned with or interested in any business which is directly or indirectly competitive with the Current Employer’s (and its Related Body Corporates’) businesses’ within Australia for a period of six months after termination. There were non-solicit and procuring clauses to similar effect. Whelan went to work for the Hi-Quality Group, which operates waste management businesses in various Australian states. TPI sought to enforce the restraint clause. Failing which, TPI sought an injunction against Whelan on the basis that there was a real threat or danger that he would misuse or reveal TPI’s confidential information. Decision: The clause was unreasonable. The restraint was too wide in that it ‘exceed[s] what is necessary to protect the legitimate business interests of TPI because it purports to protect

68 IF Asia Pacific Pty Ltd v Galbally [2003] VSC 192 at [101].

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3.35C2

Marketing and the Law businesses with which Mr Whelan has had no relevant connection’. There was no need to consider the duration or geographic width of the clause. As Whelan admitted to having disclosed certain confidential information, the court considered that it was appropriate to grant a permanent injunction restraining Whelan from disclosing or using confidential information in relation to TPI’s plans and strategies concerning the HiQuality Group.

Normally a non-solicitation clause would only be valid if the employee was one of those persons whom the customers regarded as the face of the employer’s business. Therefore, a non-solicitation clause is more likely to be reasonable if the employee has frequent face to face contact with the customers, or the employee alone knows the customers and their requirements and particularly where contact with the customers takes place away from the employers’ premises: see Rentokil Pty Ltd v Lee69 and Twenty-First Australia Inc v Shade.70

Consequences of an invalid restraint clause

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3.36 If a restraint of trade clause is invalid it will be severed from the agreement. If the restraint clause is invalid in part only, the court will sever the invalid part and, if the remainder is reasonable, the court will enforce it. The court has no power to write a new clause.71 The position in New South Wales is somewhat different because of the Restraints of Trade Act 1976 (NSW). Section 4(1) of the Act provides that a clause in restraint of trade is valid to the extent to which it is not contrary to public policy whether it is expressed in severable terms or not. This seems to mean that the court has limited power to write down the restraint clause.

Use of multiple descending restraint clauses 3.37 Because the court has no power (or in New South Wales72 limited power) to rewrite a restraint clause, a party seeking to rely on the restraint clause must ensure that the contract contains at least some valid promises, otherwise there will be very little protection. The method used to secure as wide a restraint as possible while ensuring some protection is the waterfall (or cascading) clause. The waterfall clause starts out by claiming a very wide restraint; if that restraint should happen to be invalid, a slightly narrower restraint is claimed; if that should also be invalid,

69 (1996) ATPR 41-451, see 3.35C1. 70 [1998] NSWSC 325. 71 See Attwood v Lamont [1920] All ER Rep 55; Butt v Long (1953) 88 CLR 476; 27 ALJR 576; Peters Ice Cream (Vic) Ltd v Todd [1961] VR 485. 72 Contracts Review Act 1980 (NSW).

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a still narrower restraint is claimed. The restraint continues to get narrower and narrower until eventually one of the clauses is valid.

Summary of common law restraint of trade 3.38 If a firm wishes to enforce a restraint of trade clause, it should apply the following questions to see whether the restraint is unlawful at common law: • What legitimate interest does the restraint seek to protect? • Is the restraint no wider than is reasonably necessary to protect that interest? • If the restraint is unreasonable, can the unreasonable parts be severed? • If severance is possible, is the restraint after severance reasonable? • If it is reasonable, has the covenantor breached the restraint clause? When formulating a restraint clause, the same process should be applied.

Employees’ Duties During and After Employment 3.39 In Digital Pulse Pty Ltd v Harris,73 Palmer J74 provided a useful summary of the duties owed by the employee under the general law. These duties now sit alongside the duties owed under the Corporations Act.

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An employee has a duty to act in the interests of the employer with good faith and fidelity. That duty is implied in every contract of employment if it is not otherwise imposed by an express term. In addition, the duty is imposed upon every employee by the law of fiduciaries, the relationship of employer and employee being recognised as a paradigmatic fiduciary relationship. The obligations imposed by the duty are not coterminous with the employee’s normal working hours: they govern all the activities of the employee, whenever undertaken, which are within the sphere of the employer’s business operations and which could materially affect the employer’s business interests. Whether a particular activity could materially affect the employer’s business interests is a question of fact and degree. The duty of loyalty requires that an employee not place himself or herself in a position in which the employee’s own interest in a transaction within the sphere of the employer’s business operations conflicts with the employee’s duty to act solely in the employer’s interest in relation to that transaction. A fortiori, an employee may not take for himself or herself an opportunity within the sphere of the employee’s business operations without the employer’s fully informed consent.

73 (2002) 40 ACSR 487; [2002] NSWSC 33. 74 At [20]–[25].

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Marketing and the Law When the employment ceases, the employee is free to compete with the employer unless subject to a valid contractual restraint on competition. The employee may take away and utilise the benefit of personal relationships built up with particular customers of the former employer and may solicit any customer whom the employee can recall without the aid of a list taken from the former employer and without deliberate memorisation of a customer list. The employee may not, however, use for his or her own benefit confidential information of the former employer, whether to solicit business from the former employer’s customers or to carry out work for such customers even if unsolicited. The remedy for breach of the contractual duty of loyalty is damages. The remedy for breach of the fiduciary duty of loyalty is either an account of the profits derived by the employee from the breach or equitable compensation. The employer need not elect between these remedies until the time at which judgment is to be entered. Where the employee who is in breach of the fiduciary duty of loyalty incorporates a company in order to take the benefits of the breach, then the company itself will be held to have participated in the breach so that it will be liable to the employer to the same extent as the employee.

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Marketing Advice 3.40 The following is a useful guide to protecting trade secrets: • Identify the information (or idea) that is confidential. • Mark such information as confidential. • Do not mark as confidential information that is not confidential or that is clearly no longer secret. • Identify those to whom the information must be disclosed and restrict disclosure to these persons. • Ensure that these persons are aware the information is to be treated as confidential. This can be done by a combination of: – marking documents ‘confidential’; – requiring recipients to acknowledge confidentiality of documents; – making employees aware of the types of information that they cannot disclose to others; and – reaching agreement with potential licensees, assignees, and joint venturers on a procedure for dealing with confidential matters prior to disclosing those matters, including entering into a confidentiality agreement. • Remain alert to the possibility that someone may use the confidential information. • Seek legal advice immediately after you become aware of the threat of disclosure — delays may result in the court refusing to grant an injunction. 126

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Protecting Copyright Material

4

Introduction to Copyright ................................................................ 4.2 Works — Basic Concepts ................................................................... 4.3 Qualified person ............................................................................. 4.4 Copyright protects the expression, not the idea ...................... 4.5 Distinguishing between physical property in a good and the intellectual property .................................................... 4.6 Material form .................................................................................. 4.7 Originality ........................................................................................ 4.8 Original Literary Works ..................................................................... 4.9 Compilations of data ................................................................... 4.10 Advertising material and trade names ....................................... 4.11 Computer software ...................................................................... 4.12 Original Dramatic Works ................................................................ 4.13 Original Musical Works ................................................................... 4.14 Original Artistic Works .................................................................... 4.15 Copyright in photographs ........................................................... 4.16 Copyright in logos and simple marketing designs ................... 4.17 Copyright in product designs, production moulds, and prototypes .......................................................................... 4.18 Copyright in buildings and models for buildings ..................... 4.19 Works of artistic craftsmanship ................................................. 4.20 Subject Matter other than Works — Pt IV Material ................... 4.21 The Rights .......................................................................................... 4.22 Works ............................................................................................. 4.23 Subject matter other than works ............................................... 4.24 Moral Rights ...................................................................................... 4.25 Author’s right of integrity ........................................................... 4.26 127

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Marketing and the Law

Defences to an action for infringement of moral rights ............................................................................... 4.27 Determining Ownership of Copyright .......................................... 4.28 Works ...............................................................................................4.28 Employees ...................................................................................... 4.29 Journalists ...................................................................................... 4.30 Photographs, portraits, and engravings .................................... 4.31 Equitable (beneficial) ownership of copyright ......................... 4.32 Joint authorship of works............................................................. 4.33 Subject Matter other than Works/Pt IV material .................... 4.34 Assignment of Copyright ................................................................ 4.35 Licences .............................................................................................. 4.36 How Long Does Copyright Last? ................................................... 4.37 Direct Infringement of Copyright — Original Works ................. 4.38 What is a ‘substantial part of the work’? .................................. 4.39 Unlawful reproduction of a copyright work ............................. 4.40 A. Unlawful reproduction of databases ................................ 4.41 B. Unlawful reproduction of themes, characters, and settings .......................................................................... 4.42 C. Unlawful reproduction of computer programs .............. 4.43 D. Unlawful reproduction of artistic works .......................... 4.44 E. Unlawful reproduction of musical works ........................ 4.45 Unlawful performance of a work in public ............................... 4.46 Unlawful communication of a work to the public .................. 4.47 Direct Infringement of Copyright — Pt IV SMOTW ................... 4.48 Defences ............................................................................................ 4.49 Fair dealing .................................................................................... 4.50 Dealing with computer programs .............................................. 4.51 Making copies for personal use .................................................. 4.52 Copying industrial products ....................................................... 4.53 A. Where a corresponding design is registered under the Designs Act ........................................................ 4.54 B. Where a corresponding design is not registered under the Designs Act and the design has been applied industrially ............................................................. 4.55 C. Where a corresponding design is not registered under the Designs Act and the design appears in a patent specification or a design application ............ 4.56 Indirect Infringement of Copyright — Authorising Infringement .................................................................................. 4.57 Libraries .......................................................................................... 4.58 Clubs and other live music venues ............................................. 4.59 Hardware and modern software technology ........................... 4.60 Software ......................................................................................... 4.61 Website linking .............................................................................. 4.62 128

Chapter 4: Protecting Copyright Material

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ISPs .................................................................................................. 4.63 Safe Harbour Defences for Online Intermediaries....................... 4.64 Indirect Infringement — Importing and Dealing ......................... 4.65 Parallel importing of copyright material .................................. 4.66 Parallel importing — accessories to imported articles ............ 4.67 Remedies, Orders and Other Matters ........................................... 4.68 Damages or an account of profits .............................................. 4.69 Other remedial powers, including interlocutory orders ......... 4.70 Injunctions against online sites providing access to overseas online copyright infringing locations...................... 4.71 Criminal penalties and seizure powers ...................................... 4.72 Making unjustified threats .......................................................... 4.73 Circumvention devices ................................................................ 4.74 International Aspects of Copyright ............................................... 4.75 Marketing Advice .............................................................................. 4.76

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4.1 Whereas patents and confidential information protect ideas, the purpose of copyright is to protect the way in which ideas are presented. In other words, copyright is said to protect the expression of an idea, not the idea itself.

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Introduction to Copyright 4.2 Australian copyright law is to be found in the Copyright Act 1968 (Cth). Contrary to popular belief, there is no system of registration for copyright in Australia.1 In fact, there are no administrative requirements for the creation of copyright.2 Copyright either subsists or it does not. The symbol © and expressions such as ‘all rights reserved’ have limited relevance in Australia in determining the existence of copyright,3 although they have other useful purposes, primarily as a simple indicator that the person using the symbol or expression is claiming copyright. The symbol © is admissible as prima facie evidence that the user is the owner of the copyright. The Copyright Act provides that copyright will subsist in any original literary, dramatic, musical or artistic work, and in such subject matter as cinematographic films, sound recordings, television and radio broadcasts, and published editions of works. The copyright owner has the exclusive right to do certain acts in respect of the copyright material. For example, only the copyright owner can copy, adapt or publicly perform the copyright work. The duration of copyright is quite long — generally 70 years in the case of films and sound recordings, and even longer for such things as books, music, and art works. The Copyright Act provides that copyright subsists in two categories of subject matter: • Works: – original literary works; – original dramatic works; – original musical works; and – original artistic works. • Subject matter other than works: – sound recordings;

1 2

3

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Some countries have registration systems. For example, in the United States registration is not necessary to establish copyright, but is required if you wish to seek damages for infringement. This applies to all countries which are signatories to the Berne Convention for the Protection of Literary and Artistic Works. The Berne Convention is an international agreement to provide reciprocal copyright protection. Most of the industrialised countries are now signatories. Until relatively recently it was necessary, in order to attract copyright protection in the United States, to attach to all copies of the copyright work the word ‘Copyright’ or the symbol © followed by the name of the copyright owner and the year of publication. This was allowed under the provisions of the Universal Copyright Convention. Since the United States joined the Berne Convention this is no longer necessary.

Chapter 4: Protecting Copyright Material

– films; – television and sound broadcasts; and – published editions of works.

Works — Basic Concepts 4.3 The Copyright Act provides that copyright subsists in an original literary, dramatic, musical, or artistic work where the creator is a qualified person: Copyright Act s 32. Before examining each of these works, there are a number of critical concepts that underpin copyright law.

Qualified person

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4.4 The Copyright Act requires a connection between the work or other subject matter and Australia. This applies for both ‘works’ and ‘subject matter other than works’. For example, in the case of works, the work must have some connection with Australia: Copyright Act s 32. In many cases, the connecting factor with Australia is that the author is a qualified person: Copyright Act s 32(4). A qualified person means an Australian citizen, or a person resident in Australia. By virtue of the Copyright (International Protection) Regulations 1969 (Cth) as amended, the Copyright Act applies to most foreigners in the same way as it applies to qualified persons. This is to ensure Australia complies with its obligations under various international conventions, including the Berne Convention, the Rome Convention, the Universal Copyright Convention, and the Agreement establishing the World Trade Organization.

Copyright protects the expression, not the idea 4.5 Fundamental to the law of copyright is the notion that copyright is not designed to protect ideas, but rather the way in which those ideas are expressed in some material form. This concept must be grasped if copyright law is to be understood. Ideas per se, whilst not protected by copyright law, can potentially be protected under the law relating to confidential information and, to a lesser extent, under patents law. Donoghue v Allied Newspapers Ltd [1938] Ch 106; [1937] 3 All ER 503 Facts: Steve Donoghue was a famous English jockey. In 1931 an English newspaper printed a series of articles based on the recollections of Donoghue as told to a journalist by the name of Felstead. The articles were not dictated by Donoghue, but rather created by Felstead from the notes he made of his conversations with the jockey. Donoghue was paid £2000 for his contribution. In 1936 Felstead convinced the defendant to publish a story based on the same

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Marketing and the Law material as the earlier article. Donoghue refused to give permission and, when the story appeared, he sued for copyright infringement. Decision: Farwell J rejected Donoghue’s claim. Copyright belongs to the creator. Donoghue was not the creator. His Honour said: [T]here is no copyright in an idea, or in ideas … [Copyright] exists in the particular form of language by which is conveyed the information which is to be conveyed. If the idea, however brilliant and however clever it may be, is nothing more than an idea, and is not put into any form of words, or any form of expression such as a picture or a play, then there is no such thing as copyright at all. It is not until it is (if I may put it in that way) reduced into writing, or into some tangible form, that you get any right to copyright at all, and the copyright exists in the particular form of language in which, or, in the case of a picture, in the particular form of the picture by which, the information or the idea is conveyed to those who are intended to read it or to look at it.

If, therefore, the important thing is the idea and not the way it is recorded, then reliance should not be placed on copyright for legal protection. Many creative ideas cannot be protected by law, for example, a style of painting: see Cummins v Vella.4 If the idea is secret and of a type that the law recognises as a trade secret, then an injunction may be issued irrespective of the form in which the secret is clothed. If the idea is a patentable invention, then registration under the Patents Act 1990 (Cth)5 should be sought. If the idea involves a product design, then registration under the Designs Act 2003 (Cth) is usually the appropriate course.6

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Distinguishing between physical property in a good and the intellectual property 4.6 Copyright is a property right, but it must be distinguished from other forms of property that may exist in an object. For example, when you buy a book, what rights do you acquire? It is certainly legitimate for a buyer to say ‘I own this book’. But what the buyer means is that he or she owns the physical property in the book. Merely buying a book does not mean that the buyer acquires the copyright. The buyer cannot make copies of the book and sell those copies. This would be an infringement of copyright. On the other hand, the buyer is certainly entitled to sell or otherwise dispose of his or her copy of the book itself.

Material form 4.7 For copyright to subsist in a literary, dramatic, musical, or artistic work, the work must be in a material form. Material form in relation to a work or an adaptation of a work includes any form (whether visible or not) of storage of the 4 5 6

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[2002] FCAFC 218, see 4.40C. The Patents Act 1990 is discussed in Chapter 2. The Designs Act 2003 is discussed in Chapter 5.

Chapter 4: Protecting Copyright Material

work or adaptation, or a substantial part of the work or adaptation (whether or not the work or adaptation, or a substantial part of the work or adaptation, can be reproduced): Copyright Act s 10. As a consequence, copyright will not attach to a speech unless it is put in writing or recorded in some way. Until this occurs, there is no copyright. Facial makeup applied by the rock singer Adam Ant before each concert did not attract copyright as an artistic work (a painting) because it was not in a material form: Merchandising Corp of America Inc v Harpbond Ltd.7 The makeup had not been reduced to any permanent or fixed surface, which is the essence of a painting. Although a photograph of the same performer wearing the makeup would have copyright (because a photograph is an artistic work), this would not protect the way in which the makeup was applied.

Originality

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4.8 Copyright only subsists in original works. Originality means that the work must originate from the author and not be copied. It does not mean that the work has to be meritorious or contain a new or inventive idea. Except for works of artistic craftsmanship, it is not necessary that a work exhibit any artistic, literary, dramatic, or musical merit. Copyright subsists in a terrible book as much as in a first-rate book, in a poor painting as well as in a masterpiece. Copyright protects the skill, judgment and independent intellectual effort involved in the production of the work rather than any intrinsic creative merit.8 In University of London Press Ltd v University Tutorial Press Ltd,9 a case dealing with copyright in university examination papers, Petersen J said: The word ‘original’ does not in this connection mean that the work must be the expression of original or inventive thought. Copyright Acts are not concerned with the originality of ideas, but with the expression of thought and, in the case of ‘literary works’ with the expression of thought in print or writing. The originality which is required relates to the expression of the thought. But the Act does not require that the expression must be in an original or novel form, but that the work must not be copied from another work — that it should originate from the author.

Authorship is thus important for the notion of originality. As the High Court indicated in IceTV Pty Ltd v Nine Network Australia Pty Ltd,10 for copyright to subsist in a work, the work must originate with the author in the sense of involving some ‘independent intellectual effort’, although literary merit (or novelty or inventiveness as required for patents) is not required. 7 8

[1983] FSR 32. IceTV Pty Ltd v Nine Network Australia Pty Ltd (2009) 239 CLR 458; 254 ALR 386; 80 IPR 451; [2009] HCA 14, see 4.41C. 9 [1916] 2 Ch 601; (1916) 1B IPR 186. 10 (2009) 239 CLR 458; 254 ALR 386; 80 IPR 451; [2009] HCA 14, see 4.41C.

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It is also important for the work to originate from a human author (or authors)11 and not from a computerised process: Telstra Corporation Ltd v Phone Directories Company Pty Ltd.12 This can have application outside the context of technology. In 2011 a photographer left his camera unattended while in a national park in Indonesia. A monkey used the camera to take some photographs, including a self-portrait or ‘selfie’. The picture was eventually posted on Wikipedia and the photographer demanded it be taken down. Wikipedia refused to do so on the grounds that the photographer was not the author of the photograph.13 This would be consistent with the legal position in Australia. Without a human author, no copyright would subsist in the photograph.

Original Literary Works 4.9 The lack of any requirement as to creative merit means that the law of copyright has an application well beyond the ambit of the fine arts. Thus, business letters, manuals of instructions, business and financial reports, advertising brochures or circulars, catalogues, the lyrics of advertising jingles, and product labels may all be literary works in appropriate circumstances: see Budget Eyewear Australia Pty Ltd v Specsavers Pty Ltd.14 Literary works also include a computer program or compilation of computer programs. Copyright can subsist in quite plain or ordinary material, for example, a bookkeeping system: Kalamazoo (Australia) Pty Ltd v Compact Business Systems Pty Ltd.15

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Compilations of data 4.10 The Copyright Act provides that a literary work includes a table or compilation, expressed in words, figures, or symbols: s 10. Thus, a collection of factual data may have copyright, provided it is original. This is an important issue for the protection of databases. In what sense can it be said that a database has originality (so that it will attract copyright)? In Desktop Marketing Systems Pty Ltd v Telstra Corporation Ltd,16 the Federal Court gave a broad interpretation to the issue of originality — a compilation of data was original, provided sufficient time, energy, and expense was involved in its creation. This is the so-called ‘sweat of the brow’ theory of originality. On this 11 Acohs Pty Ltd v Ucorp Pty Ltd (2010) 86 IPR 492; [2010] FCA 577, upheld on appeal, special leave denied, where it was held that the source code for electronic material safety data sheets was not a work of joint authorship, so was not an original literary work. 12 (2010) 273 ALR 725; 90 IPR 1; [2010] FCAFC 149, see 4.10C. 13 See ‘Monkey Selfie’, January 2014, available at . 14 (2010) 86 IPR 479; [2010] FCA 507. 15 (1985) 5 IPR 213. 16 (2002) 192 ALR 433; 55 IPR 1; [2002] FCAFC 112.

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theory, copyright could be used to protect telephone directories, football fixtures, and television guides. This approach, however, was implicitly rejected by the High Court in IceTV Pty Ltd v Nine Network Australia Pty Ltd,17 a case concerning schedules for television programs, where it was suggested that for copyright to subsist in a compilation of data, there must be something more than just labour and expense involved in the creation of the database. The High Court decision in IceTV Pty Ltd v Nine Network Australia Pty Ltd was applied in the following case. Telstra Corporation Ltd v Phone Directories Company Pty Ltd (2010) 273 ALR 725; 90 IPR 1; [2010] FCAFC 149 Facts: Telstra produced the White Pages and the Yellow Pages telephone directories for geographic areas across Australia. Substantial labour and expense went into collecting, verifying, recording, assembling, and producing the directories. The data contained in the directories was reproduced by PDC without permission from Telstra. Telstra argued that this amounted to an infringement of copyright. Telstra was unsuccessful at first instance and appealed to the Full Court. Telstra submitted that its employees applied intellectual effort at ‘every stage of the process’ from collection to publication. Decision: The court held that copyright did not subsist in Telstra’s White Pages or Yellow Pages. To be original, a literary work (including compilations of data) must involve ‘sufficient independent intellectual effort’. This independent intellectual effort must be directed to reducing the work to its material form. The requisite effort of Telstra’s employees was not directed to the final phase of the work and so was not relevant for determining originality. The work was ultimately created through a highly sophisticated computerised process and was not the work of a human author.

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Telstra’s application for special leave to appeal the decision to the High Court was denied.

Many databases will therefore not attract copyright protection in Australia. This is in contrast to Europe where there is a special law protecting databases.18

Advertising material and trade names 4.11 Copyright could subsist in advertising material such as the lyrics of jingles and advertising copy. Copyright could even subsist in an advertising slogan, although a compilation of commonplace sentences commonly in use will not be original: see Kirk v J & R Fleming Ltd.19 Copyright is unlikely to subsist in a trade name because to be a literary work, the trade name must be sufficiently substantial.

17 (2009) 239 CLR 458; 254 ALR 386; 80 IPR 451; [2009] HCA 14, see 4.41C. 18 1996 Directive on the Legal Protection of Databases 96/9/EC. 19 [1928–35] Macg Cop Cas 44.

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Marketing and the Law

4.11C

Exxon Corporation v Exxon Insurance Consultants Ltd [1982] Ch 119; [1981] 3 All ER 241 Facts: The plaintiff was a multinational oil corporation. It spent considerable time and research in creating and adopting the word ‘Exxon’ as its corporate name. The name was chosen because it satisfied the three criteria set out by the company: • It was capable of being readily identified with the plaintiff and its associates and their goods and services. • It was an invented word and devoid of any meaning in English or any other language spoken in any place where the plaintiff’s goods or services were marketed or likely to be marketed. • It was short, distinctive, and easily memorised. The name was widely registered as a trade mark. The defendant insurance company used the name Exxon without the plaintiff’s permission. The plaintiff sued for passing off and copyright infringement.

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Decision: The plaintiff was successful in passing off but failed to establish copyright infringement. The court held that a literary work is something that provides either information or instruction or pleasure in the form of literary enjoyment. Exxon does not perform any of those functions and, indeed, has no meaning except where used with other words or in a particular juxtaposition as, for example, on goods. The court also suggested that a single word is too insubstantial to amount to a literary work.

Applying the Exxon principle, courts have refused to recognise copyright in single words such as ‘Wombles’,20 ‘Kojak’21 (both of which were the names of successful television programs), and ‘Smartfax’.22 For similar reasons copyright did not subsist in the slogan ‘Somewhere in the Whitsundays’: Sullivan v FNH Investments Pty Ltd;23 or in the words ‘The Man who Broke the Bank at Monte Carlo’: Francis Day & Hunter Ltd v Twentieth Century Fox Corp Ltd;24 or in the phrase ‘Beauty is a social necessity, not a luxury’: Sinanide v La Maison Kosmeo.25 Copyright was held not to subsist in the words ‘Help-Help-Driver-in-Danger-Call-police-Ph.000’: State of Victoria v Pacific Technologies (Australia) Pty Ltd (No 2).26 Any legal protection would have to come from trade marks law, the law of passing off, or the Australian Consumer Law.27 It is unlikely, therefore, that advertisers will often be able to rely on copyright to protect product or trade names or slogans. Perhaps, if the name or slogan is given sufficiently original artistic content, some limited form of copyright protection may be available as an original artistic work: see 4.11. In Elwood Clothing Pty Ltd 20 Wombles Ltd v Wombles Skips Ltd [1977] RPC 99. The more appropriate avenue for protection in a case such as this is the Trade Marks Act 1995 (Cth). 21 Taverner Rutledge Ltd v Trexapalm Ltd [1977] RPC 275. 22 Brodel v Telstra Corp Ltd [2004] FCA 505. 23 (2003) 57 IPR 63; [2003] FCA 323, see 4.69C. 24 [1939] 4 All ER 192. 25 (1928) 44 TLR 574. 26 (2009) 81 IPR 525; [2009] FCA 737. 27 Competition and Consumer Act 2010 (Cth) Sch 2.

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v Cotton On Clothing Pty Ltd,28 the court protected t-shirt designs as artistic works, but held that the words and numbers were too insubstantial to be a literary work. Copyright only protects the original part of the work. If the originality is limited, the monopoly provided by the Copyright Act will be limited correspondingly.

Computer software 4.12 As originally enacted, the Copyright Act made no mention of computer software. Therefore it was interpreted in the same way as any other work. In Computer Edge Pty Ltd v Apple Computer Inc,29 the High Court (applying the principle from Exxon) held that copyright could subsist in the source code of a computer program (which could be read by a programmer), but not in the object code (which only a machine could read). As a result, the law was quickly changed. A ‘computer program’ is now defined to mean a set of statements or instructions to be used directly or indirectly in a computer in order to bring about a certain result: Copyright Act s 10. This means that the object code can also be protected. This is now fairly universally established, ‘notwithstanding any incongruity in treating computer programs as literary works’: Stevens v Kabushiki Kaisha Sony Computer Entertainment.30 Computer programs may also be protected by the Patents Act. Patents law, however, requires a relatively high level of originality and creativity. Procedurally, patenting is unattractive to the software industry because of its registration and public disclosure requirements.31

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Original Dramatic Works 4.13 Part III of the Copyright Act protects original dramatic works. Dramatic works include plays, film scripts, and choreographic shows, although this is not an exhaustive list. There is considerable overlap between dramatic works and literary works. Generally a dramatic work is distinguished by the fact that it is designed to be performed. In Banner Universal Motion Pictures Ltd v Endemol Shine Group Ltd,32 the High Court of England and Wales held that TV show formats could be eligible for copyright protection as dramatic works. On the facts of that case it was held that the format in question was too commonplace as to be original and lacked sufficient organisation and coherence so as to be capable of reproduction, in the case, by way of performance. 28 29 30 31

(2008) 172 FCR 580; 80 IPR 566; [2008] FCAFC 197, see 4.44C. (1986) 161 CLR 171; 65 ALR 33; 6 IPR 1; [1986] HCA 19. (2005) 221 ALR 448; 65 IPR 513; [2005] HCA 58. See, for example, Advisory Council on Intellectual Property, Review of the Innovation Patent System, Canberra, 2014. A number of submissions claimed that patents undermine innovation in the software industry. 32 [2017] EWHC 2600 Ch; [2017] WLR(D) 686.

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Original Musical Works 4.14 Part III of the Copyright Act protects original musical works. An original musical work is a reference to the musical score or notation. Provided the test for originality is satisfied, copyright will subsist in the score for an opera, a popular song, or an advertising jingle; see, for example, Larrikin Music Publishing Pty Ltd v EMI Songs Pty Ltd;33 Larrikin Music Publishing Pty Ltd v EMI Songs Australia Pty Ltd (No 2).34 The words or lyrics to a song do not form part of the musical work. They are protected as literary works. Therefore, obtaining permission to use a song in an advertisement could involve seeking authorisation from at least two copyright holders.

Original Artistic Works 4.15 The Copyright Act protects original artistic works. Section 10 provides that an artistic work includes original paintings, sculptures, drawings, engravings, or photographs, buildings, or models of buildings, whether of artistic quality or not. It also provides that artistic works include works of artistic craftsmanship. Works of artistic craftsmanship differ from all other works in that they require some element of artistic quality. A piece of modern sculpture, for example, may attract copyright both as a sculpture and as a work of artistic craftsmanship. As with literary, dramatic, and musical works, the level of originality required for an artistic work is not great.

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Copyright in photographs 4.16 Copyright will normally subsist in a photograph, even a simple snapshot. Therefore, care must be taken to get copyright permission where a photograph is being reproduced.35

Copyright in logos and simple marketing designs 4.17 Provided it can be said that sufficient skill, judgment and independent intellectual effort has gone into its creation, a logo or other distinguishing mark may attract copyright protection as an artistic work.36 Thus, a graphic bar containing the words ‘Opera in the Outback’ done in stylistic fashion used on the cover of a brochure for a concert was sufficiently original to attract copyright, 33 (2010) 263 ALR 155; 83 IPR 582; [2010] FCA 29, see 4.45C. 34 (2010) 270 ALR 481; 87 IPR 357; [2010] FCA 698, see 4.45C. 35 Care should also be taken when the photograph is of a work. Some exceptions apply; for example, a photograph of a sculpture in a public place: Copyright Act 1968 s 65. 36 For this analysis it does not matter whether the logo is registered as a trade mark under the Trade Marks Act: Catnic Components Ltd v Hill & Smith Ltd [1978] FSR 405; [1982] RPC 183.

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even though the choice of font style was made from a computer program and the whole design was put together quickly: Lott v JBW & Friends Pty Ltd.37 The particular way in which the Chinese characters that made up the masthead of a Chinese language newspaper were written (the calligraphy) was held to be an artistic work in Melbourne Chinese Press Pty Ltd v Australian Chinese Newspapers Pty Ltd.38 Copyright in the form of an artistic work has been held to subsist in the look and feel of a design for clothing that consisted mainly of words and numbers: see Elwood Clothing Pty Ltd v Cotton On Clothing Pty Ltd.39

Roland Corporation v Lorenzo & Sons Pty Ltd40

Australian Home Loans v Phillips41

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However, not every doodle or scrawl is an artistic work. Some things are too trivial or commonplace to attract copyright. There is no sufficient measure of skill, judgment or intellectual effort involved.42 In Cortis Exhaust Systems Pty Ltd v Kitten Software Pty Ltd,43 Tamberlin J held that a digitally produced product logo simply using the letters ‘SIM’ was too trivial to attract copyright. In Merchandising Corp of America Inc v Harpbond Ltd44 Lawton LJ, commenting on whether Adam Ant’s facial makeup could be an artistic work, said, ‘Two straight lines drawn with greasepaint with another line in between them drawn with some other colouring matter, in my judgment, by itself could not possibly attract copyright.’

Copyright in product designs, production moulds, and prototypes 4.18 Copyright subsists in original drawings, original sculptures, and original engravings. As no artistic merit is required, drawings for industrial products will often be artistic works. Thus, copyright has been held to subsist in engineering

37 38 39 40 41 42 43 44

(2000) 76 SASR 105; [2000] SASC 3. (2004) 63 IPR 38; [2004] FCAFC 201. (2008) 172 FCR 580; 80 IPR 566; [2008] FCAFC 197, see 4.44C. (1991) 105 ALR 623; 22 IPR 245. (1998) ATPR 41-626. Re Karo Step Trade Mark [1977] RPC 255. (2001) ATPR 41-837; [2001] FCA 1189. [1983] FSR 32, see 4.7.

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drawings of expansion joints for bridges,45 industrial pumps,46 a hot water system,47 and an exhaust system for a Leyland motor car.48 Copyright may subsist in the drawings for a yacht,49 and in dressmaking designs and patterns.50

4.18C1

Krueger Transport Equipment Pty Ltd v Glen Cameron Storage & Distribution Pty Ltd (2008) 78 IPR 262; [2008] FCA 803 Facts: Krueger design and build trailers for the Australian transport industry. Amcor, a very large cardboard packaging company, called for tenders for a cartage contract. It invited Camerons, a transport and logistics group involved in transporting goods in Australia, to tender. If successful, Camerons would need to acquire about 20 new trailers. Camerons sought quotes from Krueger, Vawdrey (a competitor of Krueger), and two others. At a meeting between Camerons and Krueger, Krueger showed Camerons a special ‘load restraint system’ it had designed for carting cardboard. This was ideal for the Amcor contract. At the meeting, Camerons agreed that the information would be kept confidential. Krueger supplied Camerons with sketches and drawings showing the trailers with the new ‘load restraint system’. Krueger had not taken out a design registration. Nor at that stage had it applied for a patent. Further, there was no written evidence that Camerons had promised to keep the information confidential. After the meeting, Camerons described the new system to Vawdrey, which then prepared design drawings based on that description. Amcor awarded the tender to Camerons, which then awarded the contract to Vawdrey. Krueger claimed breach of confidence and copyright infringement.

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Decision: The information supplied by Krueger had the necessary element of confidentiality. Although nothing was put in writing at the time of the meeting, Camerons was clearly under an express obligation not to use the information without permission. Camerons had breached that confidence. The drawings were an original artistic work and therefore attracted copyright protection. Vawdrey had prepared its drawings based on a description of the Krueger drawings. The Vawdrey drawings reproduced a substantial part of the originality contained in the Krueger drawings. Therefore, copyright was infringed. Vawdrey had been encouraged to produce the infringing drawings by Camerons. Therefore, Camerons was liable for authorising the infringement. The issue of remedies was set aside to be heard separately. (Vawdrey’s appeal was dismissed: Vawdrey Australia Pty Ltd v Krueger Transport Equipment Pty Ltd.51)

45 Compagnie Industrielle de Precontrainte et D’Equipment des Constructions SA v First Melbourne Securities Pty Ltd (1999) 44 IPR 512; [1999] FCA 660. 46 Amalgamated Mining Services Pty Ltd v Warman International Ltd (1992) 111 ALR 269; 24 IPR 461; Warman International Ltd v Envirotech Australia Pty Ltd (1986) 67 ALR 253; 6 IPR 578; (1986) ATPR 40-714. 47 SW Hart & Co Pty Ltd v Edwards Hot Water Systems (1985) 159 CLR 466; 61 ALR 251; 5 IPR 13; [1985] HCA 59. 48 British Leyland Corp v Armstrong Patents Co Ltd [1986] AC 577; 6 IPR 102; [1986] 1 All ER 850; [1986] 2 WLR 400. 49 Dorling v Honnor Marine Ltd [1965] Ch 1; [1964] 1 All ER 241; Swarbrick v Burge (2004) 208 ALR 19; 61 IPR 543; [2004] FCA 813. 50 Muscat v Le (2003) 204 ALR 335; 60 IPR 276; [2003] FCA 1540. 51 [2009] FCAFC 156.

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The benefit of claiming copyright in product drawings is that copyright will protect three-dimensional products that correspond to the drawings52 and the protection will last much longer than for a registered design.53 To prevent misuse of copyright designed to protect artistic works, the Copyright Act provides a special defence to an action for copyright infringement where a design corresponding to the copyright work (an artistic work) has been registered under the Designs Act or applied industrially: see Greenfield Products Pty Ltd v Rover-Scott Bonnar Ltd.54 This defence is discussed at 4.53–4.56. Product development may also involve the creation of models, prototypes, and moulds. From time to time, copyright has been claimed in all these various stages of the evolution of an industrial product. In Lincoln Industries Ltd v Wham-O Manufacturing Co,55 copyright was claimed in various aspects of the development of a flying disc toy called a ‘Frisbee’, including the original drawings, the original wooden model (as a sculpture), the mould or die (as an engraving), and the final product produced by an injection moulding process (as a sculpture or an engraving). The New Zealand Court of Appeal accepted most of these submissions, although it rejected the idea that a product made from an injection moulding process was a sculpture. Other jurisdictions will not necessarily take such an expansive approach. In the United Kingdom, the Stormtrooper helmet used in the Star Wars films was held not to be a sculpture; agreeing with the lower courts, the Supreme Court said the helmet was a mixture of costume and prop and its primary function was utilitarian: Lucasfilm Ltd v Ainsworth.56 It is likely that a similar result would occur in Australia.

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Greenfield Products Pty Ltd v Rover-Scott Bonnar Ltd (1990) 95 ALR 275; (1990) 17 IPR 417 Facts: Both the applicant and the defendant manufactured ride-on motor mowers. The applicant developed a new drive mechanism which had substantial advantages over existing technology. However, the applicant failed either to take out a patent covering the inventive elements of the drive mechanism or to register the design of the drive mechanism under the Designs Act. When the product was released on to the market, the defendant examined and then imitated the drive mechanism, making some modifications and improvements. The applicant sued for copyright infringement, claiming that the original drawings for the drive mechanism and the final product were artistic works. Decision: The court held that utilitarian products made from a moulding process were not ‘sculptures’. The court also rejected the notion that a sculpture included machinery. In contrast to the Frisbee case, the court rejected the argument that a mould or die for producing machinery 52 Copyright Act 1968 s 21(3). See King Features Syndicate Inc v O & M Kleeman Ltd [1941] AC 417; (1941) 1B IPR 215; [1941] 2 All ER 403 (‘Popeye the Sailor’ case). 53 A design monopoly lasts 10 years: see Chapter 5. 54 (1990) 95 ALR 275; 17 IPR 417, see 4.18C2. 55 [1984] 1 NZLR 641; (1984) 3 IPR 115; [1985] RPC 127. 56 [2012] 1 AC 208; (2011) 92 IPR 647; [2011] 4 All ER 817; [2011] UKSC 39.

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Marketing and the Law was an engraving. Although copyright subsisted in the drawings, it was unenforceable against the defendant because of the defence provided by s 77 of the Copyright Act that the artistic work had been applied industrially.

Copyright in buildings and models for buildings 4.19 Copyright clearly subsists in the floorplan for a house as a drawing, provided the drawing is original.57 Copyright also subsists in the building itself and in a model of the building. A building is a structure of any kind: Copyright Act s 10. In Half Court Tennis Pty Ltd v Seymour,58 copyright was held to subsist in a mini tennis court as a building. The Copyright Act specifically provides that it is not an infringement of copyright to photograph, draw, paint, or include in a film or television broadcast a building or model of a building: s 66.

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Works of artistic craftsmanship 4.20 Works of artistic craftsmanship are works which require some skill to produce (craftsmanship) and which appeal to aesthetic (artistic) tastes, even though they may also serve a useful purpose. For example, a hand-crafted vase is likely to be a work of artistic craftsmanship because it takes skill to produce the vase and it appeals to taste. The same may be said of a piece of pottery, a stained glass window, or a silver candelabra, but cannot be said of many machine-produced goods. The importance of works of artistic craftsmanship is that, unlike other artistic works (such as design drawings), they do not lose copyright protection once they have been industrially applied. Thus, if the product copied in Greenfield Products Pty Ltd v Rover-Scott Bonnar Ltd59 had been a work of artistic craftsmanship, the plaintiff would have been able to sue for copyright infringement even though the work had been applied industrially. The reason for the exception is to encourage ‘real artistic effort’ in the field of industrial design. The expression ‘work of artistic craftsmanship’ is a composite phrase designed to highlight works that, while having a functional use, owe more in the final crafting to an appeal to artistic taste rather than function. According to the High Court in Burge v Swarbrick,60 ‘[w]ith wallpaper, a tapestry, stained glass window, piece of jewellery or Tiffany artefact, there is considerable freedom of design choice relatively unconstrained by the function or utility of the article so produced.’ The

57 See Eagle Homes Pty Ltd v Austec Homes Pty Ltd (1999) 87 FCR 415; 161 ALR 503; 43 IPR 1; Collier Constructions Pty Ltd v Foskett Pty Ltd (1991) 97 ALR 460; 19 IPR 44. 58 (1980) 53 FLR 240. 59 (1990) 95 ALR 275; 17 IPR 417, see 4.18C2. 60 (2007) 232 CLR 336; 234 ALR 204; 72 IPR 235; [2007] HCA 17, see 4.20C1.

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vital question, therefore, is to what extent is the design constrained by function? The High Court examined this question in the context of a design for a yacht. Burge v Swarbrick (2007) 232 CLR 336; 234 ALR 204; 72 IPR 235; [2007] HCA 17 Facts: Swarbrick is a naval architect who developed a yacht known as the ‘JS 9000’. It was described by one expert witness as a sports boat. In the process of developing the yacht, Swarbrick produced a plug model (the Plug) handcrafted by himself (a hand-crafted full-scale model of the finished yacht). From the Plug, the mouldings are made, and from the mouldings, the yacht itself. Swarbrick’s design brief stated that: [T]he market at which the JS 9000 was aimed comprised persons who, in no particular order, were reasonably experienced amateur sailors, aged 45 or more, who wanted a yacht of good performance, capable of racing, but for typical use in day sailing, relatively simple to sail with a minimum crew size, and visually attractive. Promotional material described the yacht as follows: The JS 9000 is a unique high performance racing yacht with the following characteristics: absolute simplicity in fitout; economical building costs; easily sailable by just a crew of two; exceptionally fast; easily transportable in the security of shipping containers for export. The Plug took a large amount of time and skill to produce. The work was largely done by Swarbrick. During the construction of the Plug, many changes were made to the original digitised design. At all times Swarbrick was concerned to produce a yacht that was visually attractive. A number of changes were made to achieve this outcome.

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The design was not registered under the Designs Act. The defendants copied Swarbrick’s design without his permission. Swarbrick sued for copyright infringement. The defendants argued, among other things, that they were protected by the provisions of s 77(2) of the Copyright Act (the copyright/design overlap provisions). Swarbrick argued that s 77(2) did not apply because the Plug was a work of artistic craftsmanship. At trial and on appeal Swarbrick succeeded. The defendants appealed to the High Court. Decision: Where a work exhibits both skilled craftsmanship and artistic appeal, the question whether it is a work of artistic craftsmanship depends in each case on the significance of functional constraints. The court held that: [D]etermining whether a work is ‘a work of artistic craftsmanship’ does not turn on assessing the beauty or aesthetic appeal of work or on assessing any harmony between its visual appeal and its utility. The determination turns on assessing the extent to which the particular work’s artistic expression, in its form, is unconstrained by functional considerations. The development of the Plug was significantly constrained by the need to satisfy the requirements of the design brief and the promotional material. These were functional requirements. Therefore, the Plug was not a work of artistic craftsmanship.

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There must, of course, be an element of craftsmanship about the work. Thus, simple machine-made garments are not works of craftsmanship: Guild v Eskandar Ltd.61 Nor, generally speaking, are the products of commonplace physical activities. For instance, in Cuisenaire v Reed,62 the court held that there was no element of craftsmanship involved in cutting strips of wood into predetermined lengths and then painting them in different colours so as to produce a set of wooden rods for the teaching of mathematics. Anyone who could handle a saw could produce the rods. Although works of artistic craftsmanship require an element of craftsmanship, they are not restricted to pure handicrafts; the definition permits some scope for the use of machines: see Coogi Australia Pty Ltd v Hysport International Pty Ltd.63 Coogi Australia Pty Ltd v Hysport International Pty Ltd (1998) 157 ALR 247; 41 IPR 593 4.20C2

Facts: Both parties manufactured garments. A design team at Coogi created a new fabric design (the XYZ design) which had both a distinct pattern and a distinct weave. One of the designers developed a computer program to operate the knitting machines that produced the fabric containing the XYZ design. The designer spent considerable time adjusting the program and the knitting machines until the desired look was finally achieved. The design was not registered under the Designs Act. Hysport produced a number of garments embodying a similar fabric structure. However, the Hysport garments used different colour schemes to the Coogi fabrics. Coogi claimed the XYZ fabric was a work of artistic craftsmanship and that Hysport had infringed its copyright. Essentially, Coogi argued that there were so many similarities between the stitch structures of the two fabrics that Hysport had reproduced a substantial part of the structure of the XYZ fabric.

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Decision: On the basis of the evidence Drummond J held that the first run of the Coogi XYZ fabric in the particular colour selection first adopted by Coogi satisfied the test for a work of artistic craftsmanship. On the question of craftsmanship Drummond J said: Before a work will qualify as a work of craftsmanship, it must be a manifestation of pride in sound workmanship and the result of the exercise of skill on the part of its creator in using the materials of which the article is made and the devices by which those materials are turned into the article. Drummond J rejected the notion that something had to be hand-crafted to be a work of craftsmanship. He said: There is no necessary difference between a skilled person who makes an article with handheld tools and a skilled person who uses those skills to set up and operate a machine which produces an article. Such an article can still be a work of craftsmanship even though the creator has used a highly sophisticated computer-controlled machine to produce it, if nevertheless it is a manifestation of the creator’s skill with computer-controlled machinery, knowledge of materials and pride in workmanship. However, Coogi failed in its action because Hysport had not substantially copied the Coogi work.

61 [2001] FSR 645. 62 [1963] VR 719; (1962) 1B IPR 235. 63 (1998) 157 ALR 247; 41 IPR 593, see 4.20C2.

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Finally, there is the question whether the same person must apply the artistic skill and the craft skill. In other words, must the designer also supply the craftsmanship in producing the finished product? In Bonz Group (Pty) Ltd v Cooke,64 the New Zealand High Court held certain garments, designed by the manufacturer’s principal designer and then made up by the manufacturer’s employee hand knitters, to be works of artistic craftsmanship. This followed the reasoning of Drummond J in the Australian case of Coogi Australia Pty Ltd v Hysport International Pty Ltd.65

Subject Matter other than Works — Pt IV Material

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4.21 The Copyright Act also extends copyright protection to what it refers to as ‘subject matter other than works’: • sound recordings; • cinematograph films; • television and sound broadcasts; and • published editions of works. These are often referred to as ‘Pt IV material’ or SMOTW (Subject Matter other than Works). The notion of originality is not involved in determining the existence of copyright for Pt IV material. Part IV copyright exists independently of any copyright in the material appearing in the sound recording, film, broadcast or published edition. Thus, the copyright in the recording of a song may subsist alongside the copyright in the musical score (the musical work) and in the words (the literary work). Films or sound recordings are expressed or defined in terms of the sum of visual images embodied in an article or thing, or the sum of the sounds involved in a record. In Galaxy Electronics Pty Ltd & Gottlieb Enterprises Pty Ltd v Sega Enterprises Ltd,66 a video game was held to be a cinematograph film. Unlike other forms of copyright material, television and sound broadcasts do not have to be in a material form to attract copyright. Copyright exists once the broadcast is made, whether or not the broadcast is recorded. It is an infringement of the television broadcast rights to make a film or recording of the broadcast, or to re-broadcast the broadcast. What is a television broadcast? The High Court tackled this issue in Network Ten Pty Ltd v TCN Channel Nine Pty Ltd.67

64 65 66 67

[1994] 3 NZLR 216. (1998) 157 ALR 247; 41 IPR 593 at 606, see 4.20C2. (1997) 145 ALR 21; 37 IPR 462; [1997] FCA 403. (2004) 218 CLR 273; 205 ALR 1; 59 IPR 1; [2004] HCA 14, see 4.21C.

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4.21C

Network Ten Pty Ltd v TCN Channel Nine Pty Ltd (2004) 218 CLR 273; 205 ALR 1; 59 IPR 1; [2004] HCA 14 Facts: The Panel, a comedy talk show on Channel Ten, regularly recorded and broadcast short clips (8–42 seconds) from Channel Nine programs without Channel Nine’s permission. Channel Nine argued that each image it broadcast was a television broadcast in itself and, consequently, Channel Ten infringed copyright every time it showed a single image (unless it was protected by the fair dealing defence). Decision: By a bare majority, the High Court rejected this argument. Each image broadcast by a television station was not a television broadcast. Generally, a program (as identified by the television station) will be a television broadcast for the purposes of the Copyright Act. However, there may be some cases where a segment within a program amounts to a television broadcast for the purposes of the Act. The High Court did not identify such cases. Finally, the High Court agreed with the trial judge that each television advertisement is a separate television broadcast for the purposes of the Copyright Act. The case was sent back to the Federal Court to decide whether a substantial part of the television broadcast had been copied and, if so, whether the fair dealing defence applied. See 4.48C.

Published edition copyright protects such matters as typographical layout together with other aspects of presentation, such as juxtaposition of text and photographs, and the use of headlines. See Nationwide News Pty Ltd v Copyright Agency Ltd,68 where Sackville J said:

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It is clear that layout is often extremely important in attracting readers to read a particular story or magazine. It is also clear that the choice of layout, type size, headings and colour is a skilled operation. … Published edition copyright thus protects the product of skill, labour and judgment in presenting material in an edition.

The Rights 4.22 The Copyright Act gives the owner the exclusive right to do certain things with respect to the copyright material.

Works 4.23 The copyright owner of a literary, dramatic, artistic, or musical work has the following exclusive rights.

68 (1996) 136 ALR 274; 34 IPR 53; 65 FCR 399 at 418.

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Chapter 4: Protecting Copyright Material TABLE 4.1 EXCLUSIVE RIGHTS THE RIGHTS (S 31)

LITERARY (EXC SOFTWARE) DRAMATIC, AND MUSICAL WORKS

ARTISTIC WORKS

COMPUTER PROGRAMS

To reproduce the work in a material form

√

√

√

To publish the work

√

√

√

To perform the work in public

√

To communicate the work to the public

√

To make an adaptation of the work

√

To enter into a commercial rental arrangement where the work is reproduced in a sound recording

√

To enter into a commercial rental arrangement

√ √

√ √

√

Under other legislation, authors of certain artistic works (original works of visual art such as paintings, sculpture, drawings, engravings) are entitled to receive a resale royalty of 5% of the sale price when the art is resold for more than $1000 by a museum, art dealer, or gallery.69 The outcome of a 2013 review of the scheme has yet to be finalised.70

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Subject matter other than works 4.24 The copyright owner of a sound recording has the exclusive right to make a copy of the recording, to cause the recording to be heard in public, to communicate the recording to the public, and to enter into a commercial rental arrangement in respect of the sound recording: Copyright Act s 85. The copyright owner of a film has the exclusive right to make a copy of the film, to cause the film to be seen or heard in public, and to communicate the film to the public: Copyright Act s 86. The copyright owner of a television or sound broadcast has the exclusive right to make a film or sound recording of the broadcast as the case may be, and to rebroadcast the broadcast, or to communicate the broadcast to the public other than by rebroadcasting: Copyright Act s 87. The copyright owner of a published edition of a work has the exclusive right to make a facsimile copy of the edition: Copyright Act s 88. 69 Resale Royalty Right for Visual Artists Act 2009 (Cth) ss 8–10. 70 See .

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Moral Rights 4.25 Part IX of the Copyright Act includes certain extra rights which have been called ‘moral rights’. These rights are personal in nature and apply only to individuals and not to corporations: s 190. Unlike copyright, they are not property rights and cannot be sold or assigned or be the subject of a licence. Moral rights always remain with the author of the copyright protected work, even if ownership in the copyright changes. Moral rights attach to certain copyright protected material (literary works, dramatic works, musical works, artistic works and cinematograph films — the latter being defined as a ‘work’ for the purposes of the moral rights provisions) for the benefit of its author. The performer’s right in the table below refers only to the sounds generated by a performance. TABLE 4.2 MORAL RIGHTS

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THE RIGHT

WHAT THE RIGHT INVOLVES

DURATION

The right of attribution — ss 193–195AB

The right to be identified as the author Until copyright ceases of a work

Performer’s right of attribution — ss 195ABA–195ABE

The right to be identified as a performer in the performance (either a live performance or a recorded performance)

Until copyright ceases (recorded performance)

The right to prevent The right to prevent the work being false attribution — falsely attributed to someone else ss 195AC–195AH Performer’s right to prevent false attribution — ss 195AHA–195AHC

Until copyright ceases

The right of integrity — The right to protect a work against ss 195AI–195AL derogatory treatment (ie to protect a work against material distortion, mutilation or alteration, or any other act in relation to the work that is prejudicial to the author’s honour or reputation)

Until death of author in the case of a cinematograph film and in the case of other works, until copyright ceases

Performer’s right of integrity — ss 195ALA– 195ALB

The right not to have the performance Until performer dies subjected to derogatory treatment; (recorded performance) (derogatory treatment means doing, in relation to the performance, anything that results in a material distortion of, mutilation of, or a material alteration to, the performance that is prejudicial to the performer’s reputation)

Note: In the case of a film, the author includes the director of the film, the producer of the film, and the screenwriter: Copyright Act s 191. A performer includes, where applicable, the conductor.

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By written consent, moral rights may, in effect, be waived: Copyright Act ss 195AW–195AWA (authors) and ss 195AXJ (performers). Consent, however, is not valid if it was obtained by duress or false or misleading statements. The remedies for infringement include a discretionary power to order a public apology in addition to the normal remedies.

Author’s right of integrity 4.26 The right of integrity does not protect against distortion, mutilation, or alteration per se. To infringe an author’s moral right of integrity, the distortion, mutilation, or alteration must be prejudicial to the author’s honour or reputation. In Canada the courts have adopted an artist-friendly approach when determining this question. Snow v Eaton Centre (1982) 70 CPR (2d) 105 Facts: Michael Snow, a sculptor, created a work comprising 60 geese flying in formation entitled ‘Flight Stop’. This work was sold to the defendant shopping centre. At Christmas the shopping centre attached red ribbons to the necks of the geese as Christmas decorations. Snow sued for infringement of his right of integrity under the Canadian Copyright Act on the ground that his naturalistic composition was made to look ridiculous — equivalent, in the opinion of Snow, to putting earrings on the Venus de Milo.

4.26C1

Decision: The court ordered the ribbons be removed. Provided the author’s opinion is reasonably derived, the court should have regard to the author’s subjective opinion on the issue of whether the treatment is derogatory.

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English courts have suggested a more objective view: see Pasterfield v Denham;71 Confetti Records (a firm) v Warner Music UK Ltd (t/a East West Records).72 Tidy v Trustees of the Natural History Museum (1995) 39 IPR 501 Facts: Bill Tidy, a cartoonist, lent certain cartoons of dinosaurs to the Natural History Museum for display. The Natural History Museum produced a book that showed the cartoons. Of necessity, the cartoons were reduced considerably in size. This meant it was not possible to read the captions on the cartoons. A colour background was added to the cartoons. Tidy claimed this infringed his right of integrity. People would draw the conclusion that he did not care enough to redraw the cartoons so as to ensure that they were suitable for production in a catalogue. Decision: The court refused an interim injunction. Tidy’s view that the defendant’s conduct was prejudicial to his reputation was not enough. The issue could not be judged purely subjectively. There had to be objective evidence as to how the public viewed the matter. As there was no such evidence presented to the court, the application failed. In any event the court doubted that the book was a distortion of Tidy’s work. 71 [1999] FSR 168. 72 [2003] EWHC (Ch) 1274.

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Australian courts have recently had the opportunity to apply the right of integrity. Perez v Fernandez (2012) 260 FLR 1; [2012] FMCA 2 4.26C3

Facts: Perez is an international rap artist known as ‘Pitbull’ and is the author of the musical and literary work for the Bon, Bon song (the song). Fernandez was a disc jockey and music promoter in Perth. Fernandez and Perez were in dispute about a failed tour. Without Perez’s consent, Fernandez created a mixed version of the song using a recording of Perez saying ‘DJ Suave’ (a name by which Fernandez is known). This streamed automatically from Fernandez’s website. Perez sued for copyright infringement and infringement of his moral right of integrity. Decision: Perez was successful. Moral rights ‘have independent existence from the bundle of economic rights protected by copyright, are inalienable to the author, and give protection to the investment of the author’s personality in his or her creation’. By including the words performed by Perez out of context, it made it appear that Perez was singing about Fernandez and the failed tour. This was a material ‘distortion’ or ‘alteration’ and perhaps ‘mutilation’ of the work. It was ‘prejudicial to the author’s honour or reputation’ because it may have been heard by some listeners before the original and assumed to be the original work — about Fernandez. Furthermore, fans aware of the failed tour and the associated legal dispute would have understood the altered song to mock Perez’s reputation. Copyright in the song was infringed when it was streamed and publicly performed without a licence. Compensatory damages of $2312 were awarded. Fernandez also infringed Perez’s moral right of integrity. Damages of $10,000 were awarded for infringement of his moral rights.

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Defences to an action for infringement of moral rights 4.27 There is no infringement of the right of attribution or of the right of integrity if the defendant is able to establish that in the circumstances it was reasonable not to identify the author, film-maker, or performer, or to subject the work, film, or performance to derogatory treatment, as the case may be. The matters to be taken into account in determining reasonableness are set out in the Act.73

73 See in relation to the right of attribution s 195AR(2)–(3) (authors) and s 195AXD(2) (performers). In relation to the right of integrity see s 195AS(2)–(3) (authors) and s 195AXE(2) (performers).

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Corby v Allen & Unwin Pty Ltd (2013) 297 ALR 761; 101 IPR 181; [2013] FCA 370 Facts: Allen & Unwin published a book titled Sins of the Father (the book) about Schapelle Corby’s arrest and imprisonment in Bali for trafficking marijuana. It was Allen & Unwin’s responsibility to decide which photographs to include in the book. It was not positive in its treatment of the Corby family and did not support Schapelle Corby’s claims to be innocent of the trafficking charges. Aspects of the book (including the previous title, The Fall Girl) had already been the subject of a defamation dispute. The book included 37 photographs. The Corby family claimed that five photographs were included in the book without their permission. The photographer was not named. The Corby family commenced proceedings for copyright infringement and, for four of the photographs, infringement of the moral right of attribution of authorship (the author of a photograph is the photographer, in this case it was Rosleigh Rose, Schapelle Corby’s mother). Allen & Unwin argued that it was common practice in the industry not to name the author and that it was reasonable in the circumstances. Decision: There was an infringement of the moral right of authorship. Buchanan J was prepared to accept that photographers are not always identified, ‘particularly photographs from private collections’. However some photographs in the book were appropriately attributed and ‘there is no evidence in the present case that lack of attribution was due to the observance … of industry practice’. The reasonableness defence did not apply. There was an infringement of copyright. Allen & Unwin had an internal copyright clearance policy, but did not follow it in this instance. No consent was given to reproduce the five photographs nor any efforts made to obtain such consent. Buchanan J went so far as to say, ‘I am compelled to the conclusion that a deliberate decision was made, and agreed upon, not to make any such effort’. The court awarded $45,000 in additional damages for the copyright infringement which was ‘in flagrant disregard of the [Corbys’] rights’.

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Determining Ownership of Copyright Works 4.28 The general rule is that the author of a work is the owner of the copyright, provided the author is a qualified person: Copyright Act s 35(2). A qualified person includes an Australian citizen as well as a person resident in Australia: see 4.4. The author of the work is the person who creates the original expression, not the person who conceived the idea. For example, in Donoghue v Allied Newspapers Ltd74 the author was the journalist who wrote the jockey’s life story and not the jockey who related the incidents upon which the story was based. However, a person who merely takes down dictation is not an author. A translator is the author of the translation. A person who records traditional folk songs is not regarded as the author of a musical work for the purposes of copyright: Robertson v Lewis.75 74 [1938] Ch 106; [1937] 3 All ER 503, see 4.5C. 75 [1976] RPC 169.

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The general rule that the author of a work is the owner of the copyright in the work is subject to a number of qualifications, any of which may be modified by agreement. Where there is an agreement modifying the operation of these qualifications or exceptions, copyright shall subsist according to the terms of that agreement: Copyright Act s 35(3).

Employees 4.29 Where the author is an employee and the ‘work’ is made pursuant to the contract of employment, copyright belongs to the employer: Copyright Act s 35(6). This raises two questions. First, is the author an employee? This matter was discussed in relation to patents: see 2.39. Second, if the author is an employee, was the work created pursuant to the contract of employment? Whether a work is created by an employee ‘pursuant to the terms of his or her employment’ depends on the answer to the question: what was the employee paid to do? See EdSonic Pty Ltd v Cassidy.76 A number of factors are relevant to answering this question, such as whether the work falls within the normal duties of the employee, the terms of the contract, the position or status of the employee, whether the employee used the employer’s materials and time in developing the work, and whether the work is related to the employer’s business. Redrock Holdings Pty Ltd v Hinkley (2001) 50 IPR 565; [2001] VSC 91

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4.29C

Facts: Hinkley was a young talented computer programmer. He developed some software (a toolkit for developing other software, referred to as the library code). Hinkley was hired by Redrock to produce computer programs that would meet the requirements of Redrock’s customers. Hinkley was given considerable latitude in determining how he would meet those requirements. The programs produced by Hinkley for Redrock’s customers used, and indeed depended on, Hinkley’s library code. It was Hinkley’s choice to use his library code rather than some other library code. Redrock had left him free to make choices of this nature. After commencing work for Redrock, Hinkley made numerous changes and additions to the library code. It grew from 5000 lines of computer code to approximately 120,000 lines. The court accepted that the changes made the library code qualitatively and quantitatively different to the version that Hinkley had brought with him to Redrock. After three years and without any warning Hinkley quit Redrock to work for another software company (Hotline). Before leaving Redrock, Hinkley deleted all copies of the source code version of the library code. This effectively crippled Redrock’s ability to service its clients. Redrock claimed that it owned the programs developed by Hinkley during his time with Redrock, including the source and object code versions of the library code. Hinkley claimed that he was hired as a contractor and that, as there was no written or oral agreement covering the transfer of the library code, copyright in the code belonged to him. Hinkley argued that Redrock only had a licence to use the object code and not the source code. Hinkley additionally

76 (2010) 272 ALR 589; 88 IPR 317; [2010] FCA 1008.

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Chapter 4: Protecting Copyright Material claimed that any modifications to the library code made during his time at Redrock were made in his own time and for his own purposes and not Redrock’s. Decision: Harper J held that the changes to the library code were so substantial that the updated library code amounted to a new work. As there was no agreement covering the ownership of the copyright in the new work, the matter depended first on whether Hinkley was an employee. The court determined that he was an employee and not a contractor. Although, as a highly skilled programmer, he was given a great deal of latitude by Redrock, there were other factors that ultimately suggested that he was an employee. Hinkley’s work was central to the development of Redrock’s business; that is, it was integrated into Redrock’s business, not an accessory to it. Hinkley was on a fixed salary; group tax was deducted from his pay; he was entitled to annual leave, sick leave, and long service leave; superannuation contributions were made by Redrock on his behalf; and all necessary equipment and Internet access was provided by Redrock. If Hinkley was an employee, the next issue was whether the new library code was developed in the course of Hinkley’s employment. Despite Hinkley’s claim that the code was developed largely at home in his own time, the evidence suggested that most of the work was done at Redrock. However, according to the court, the most important evidence pointing to the conclusion that Redrock owned the copyright was the fact that Hinkley’s library code was a core element in the programs that Hinkley had been hired to develop for Redrock’s clients. The court therefore determined that copyright in the new library code belonged to Redrock.

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Journalists 4.30 Where a journalist is employed by a newspaper, magazine, or similar periodical, the newspaper proprietor owns the copyright in any literary, dramatic, or artistic work produced by the journalist. There are two exceptions. The journalist is the owner of the copyright in so far as the copyright relates to either reproduction of the work for the purpose of inclusion in a book, or reproduction of the work in the form of a hard copy facsimile (making photocopies), unless the copying is connected with publication of the newspaper, magazine, or similar periodical: Copyright Act s 35(4). Thus, it would infringe the journalist’s copyright for a person who supplies press clippings for a fee to make copies of newspaper articles without the journalist’s permission.77

Photographs, portraits, and engravings 4.31 Ordinarily the author of a photograph, portrait, or engraving, being the person who took the photograph or created the portrait or engraving, owns copyright in it. However, where a photograph, portrait, or engraving is commissioned for value and for a private or domestic purpose, copyright belongs to the person commissioning the photograph, portrait, or engraving: Copyright Act s 35(5). However, this is subject to an agreement to the contrary between the parties. Thus, 77 De Garis v Neville Jeffress Pidler Pty Ltd (1990) 95 ALR 625; 18 IPR 292.

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it is important for those commissioning photographs for commercial purposes (for example, advertising) to ensure that the issue of ownership of the copyright is dealt with expressly in the agreement commissioning the photograph. Future copyright may be assigned, but the assignment must be in writing: see 4.35.

Equitable (beneficial) ownership of copyright 4.32 Although person X may own the legal copyright in a work, the equitable or beneficial rights might belong to someone else. Whether this applies will depend on the facts of the case. Beneficial ownership may be inferred from the dealings between the parties, or be implied as a matter of commercial necessity, industry custom, or past dealings. Griggs Group Ltd v Evans & Raben Footwear [2005] EWCA Civ 11 4.32C

Facts: Griggs was the UK manufacturer and distributor of Dr Martens footwear. In 1988 it commissioned an advertising agency to produce a new logo for Dr Martens that combined the Dr Martens logo and the Air Wair logo, which is used on Dr Martens footwear. The advertising agency hired Evans, a freelance commercial artist, to do the work. There was no written agreement between any of the parties covering the issue of copyright ownership of the logo. Evans produced the following logo.

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Griggs continued to use the logo without question until court proceedings in Australia raised doubts as to the ownership of the copyright. At this point Evans asserted copyright ownership and then purported to assign the copyright to Raben Footwear, an Australian company that, while not a competitor of Griggs, was hostile to Griggs. Griggs sought an injunction and a declaration that it owned the copyright. Decision: Copyright subsisted in the logo as an artistic work. This was not disputed. Evans produced the logo as a freelance contractor, not as an employee of Griggs or the advertising agency. Therefore, pursuant to the UK Copyright Act (which is similar in this respect to the Australian Act), Evans was the legal owner of the copyright. However, the terms and nature of the arrangement made it clear that the parties must have intended Griggs to be the beneficial owner. Where the matter in dispute is the ownership of a logo, it is difficult to see that any other conclusion could be drawn. Therefore, Evans could not assign copyright to a third party without authorisation from Griggs.

Although Griggs was able to establish beneficial ownership, the matter should not have been left to chance and the courts. To avoid uncertainty and the time and costs of future disputes, it is highly recommended that the disposition of rights (including copyright) be handled by written agreement entered into at the time the work is commissioned.

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Joint authorship of works 4.33 Where two or more persons collaborate in the creation of a work, the work is regarded as having been jointly authored. Therefore, subject to the provisions of s 35 of the Copyright Act, the authors own the copyright jointly.

Subject Matter other than Works/Pt IV material 4.34 The owner of the copyright in a sound recording (other than the recording of a live performance) or a cinematographic film is the maker of the recording or film. However, where a person commissions a recording or film to be made by another person pursuant to an agreement for valuable consideration, the commissioning party is the copyright owner: Copyright Act s 97(3) (sound recordings); s 98(3) (films). A sound recording made of a live performance is jointly owned by the maker and the performers (including, where applicable, the conductor): Copyright Act s 100AE. Copyright in television and sound broadcasts is owned by the maker: Copyright Act s 99 and s 22(5). The publisher of an edition of a work is the copyright owner of any copyright subsisting in the edition: Copyright Act s 100.

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Assignment of Copyright 4.35 Copyright ownership may be sold; that is, transferred or assigned by agreement. An assignment must be in writing, although the courts do have power in special circumstances to enforce an unwritten assignment: see Griggs Group Ltd v Evans & Raben Footwear.78 Where there is an agreement concerning the ownership of copyright, copyright shall subsist according to the terms of that agreement. Where copyright material is created under a contract for services such as with an independent contractor, as opposed to an employment contract, it is important to consider an assignment. The reason for this is that under a contract for services, the general rule is that the contractor would own the copyright: see 4.29. Upon assignment, the assignee becomes the owner of the copyright, but remains subject to the author’s moral rights unless these are waived by the consent of the author of the material in favour of the assignee of the associated copyright.

Licences 4.36 Licences may be exclusive or non-exclusive. An exclusive licence must be in writing, although the courts have the power in their equitable jurisdiction to

78 [2005] EWCA Civ 11, see 4.32C.

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enforce an unwritten exclusive licence. A licence can be express or implied. Many websites today provide terms and conditions granting a copyright licence, for example, to print out one copy of the website (a reproduction) for personal use. Where necessary, the terms of the licence will be inferred from the surrounding circumstances, or implied on the basis of commercial necessity, industry custom, or past dealings. For example, where a contractor produces a work for another person for reward, a court (at the very least) will imply a term that the other person has a licence to use the work in the manner and for the purpose necessarily contemplated by the parties (based on their discussions and actions at the time of the commissioning): see Wilson v Weiss Art Pty Ltd.79 Wilson v Weiss Art Pty Ltd (1995) 31 IPR 423; (1995) AIPC 91-139 4.36C

Facts: Wilson prepared artwork at the request of an advertising agency for use by its client Peter Weiss Pty Ltd, a clothing designer and manufacturer. The artwork was to be used in advertising and merchandising the Peter Weiss range of clothing. There was no written agreement covering this deal. The agency made no attempt to obtain any formal assignments of copyright in the artwork for its client. Later the advertising agency and Peter Weiss set up a joint venture (the defendant company) to merchandise a wide variety of products (from framed prints to yo-yos) using the Wilson artwork. Wilson’s permission was not sought. When she discovered the situation Wilson sued for copyright infringement. The defendant claimed it had an implied right to use the artwork.

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Decision: The court held that Wilson had granted Weiss an exclusive and irrevocable right to use the artwork in advertising Weiss fashion goods in the media and to use the artwork on merchandise sold as a promotional adjunct to Peter Weiss clothing. However, Wilson had not licensed Weiss to use the artwork on any merchandise not connected with Weiss clothes. Therefore, there had been an infringement of copyright.

Implied licences are usually quite limited. For example, in Acohs Pty Ltd v Ucorp Pty Ltd,80 the court agreed that a user had an implied licence to reproduce the electronic material safety data sheets for hazardous substances, but the users’ implied licence did not extend to reproductions by suppliers. When an architect produces the drawings for a house, there is generally an implied licence for the person commissioning the drawings to use them to build the house.81 However, it does not mean that there is an implied licence to use the drawings to construct a number of such houses. It will depend on what is necessary to make the contract work. Similarly, the purchaser of a book does not acquire a licence to photocopy it. Buying a film on video does not carry with it the right to make further duplications. Buying a sound recording does not give the purchaser the right to make copies of the recording for sale or to play the 79 (1995) 31 IPR 423; (1995) AIPC 91-139, see 4.36C. 80 (2012) 287 ALR 403; 95 IPR 117; [2012] FCAFC 16. 81 Beck v Montana Constructions Pty Ltd (1963) 80 WN (NSW) 1578.

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recording to the public. The Copyright Act provides for the granting of statutory licences in certain circumstances. The licensee must pay a fee — a royalty — to the appropriate collecting agency, which is then responsible for distributing the fees to the copyright owners. Educational institutions have the right, in return for payment of a royalty, to copy and communicate certain works and broadcasts for educational use, and to make copies of works for distribution to students for teaching purposes, whether the original is in hard copy or electronic form: Copyright Act Pt IVA Div 4.82 Once a musical work has been recorded for the first time, anyone may produce their own recorded version of that work for retail sale, provided a royalty is paid: Copyright Act ss 54–64.83 A sound recording may be broadcast or played publicly, provided a fee is paid: Copyright Act ss 108–109.84

How Long Does Copyright Last? 4.37 The duration of copyright depends on the nature of the copyright material. Where it is calculated from the death of an author and there are joint authors, it is the author who dies last: Copyright Act s 80. Despite previous recommendations to the contrary,85 the duration of copyright for works, sound recordings, and films was extended by 20 years on 1 January 2005 following Australia’s entry into a free trade agreement with the United States.86 The duration of copyright for works and Pt IV Subject Matter other than Works (SMOTW) is as follows. TABLE 4.3 DURATION OF COPYRIGHT

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WORKS

1

TYPE OF COPYRIGHT MATERIAL

WHEN COPYRIGHT ENDS

WHEN FIRST MADE PUBLIC

Literary, dramatic, musical, or artistic works first made public before 1 January 2019

70 years from the end of the year in which the author died: s 33(2)

When the work is published, performed in public, broadcast or communicated, and for artistic works, when exhibited in public, and when records of the work are offered to the public: s 29A(1)

82 The royalties are negotiated and collected by the Copyright Agency on behalf of copyright owners. 83 The collecting agency is APRA AMCOS. 84 The collecting agencies are the Phonographic Performance Company of Australia Ltd (PPCA) on behalf of the record producers and manufacturers, and APRA AMCOS, which acts for the authors, composers, or other copyright work owners. 85 Intellectual Property Competition Review Committee, Final Report, 2000. 86 US Free Trade Agreement Implementation Act 2004 (Cth).

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TABLE 4.3 DURATION OF COPYRIGHT — cont’d TYPE OF COPYRIGHT WHEN COPYRIGHT MATERIAL ENDS

WHEN FIRST MADE PUBLIC

2

Most literary works, dramatic works, musical works and an engraving with a known deceased author and the work was first made public before 1 January 2019 but not before death of author

70 years from when work first made public: s 33(2)

As above

3

Works first made public before 1 January 2019 and identity of author not known after 70 years of work being first made public

70 years after work first made public: s 33(2)

As above

4

Works first made public after 1 70 years from the end January 2019 to which item 5 of the year in which the and 6 of this table do not apply author died: s 33(3)

As above

5

Works first made public after 70 years after work first 1 January 2019 and identity of made: s 33(3) author not known before end of 70 years of work being made and work first made public after end of 50 years after being made

As above

6

Works first made public after 1 January 2019 and identity of author not known before end of 70 years after work first made public and work first made public before end of 50 years after being made

As above

70 years after work first made public: s 33(3)

PART IV SMOTW TYPE OF COPYRIGHT MATERIAL

WHEN COPYRIGHT ENDS

HOW CONDITION MET

7

Sound recordings and films first made public before 1 January 2019

70 years from the end of the year in which the sound recording or film is first made public: s 93(2)

Made public when seen/heard in public or communicated to the public: s 29A(2)

8

Sound recordings and films first made public after 1 January 2019 and they are made public before the end of 50 years after being made

70 years from the end of the year in which the copyright material is first made public: s 94(3)

Made public when seen/heard in public or communicated to the public: s 29A(2)

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Chapter 4: Protecting Copyright Material TABLE 4.3 DURATION OF COPYRIGHT — cont’d TYPE OF COPYRIGHT MATERIAL

WHEN COPYRIGHT ENDS

HOW CONDITION MET

9

Sound recordings and films first made public after 1 January 2019 to which item 8 of this table does not apply

70 years from the end of the year in which the copyright material is first made: s 94(3)

Sound recording made when first record of it made: s 22(3)(a) Film made when production of first copy of it is arranged: s 22(4)(a)

10

Television and radio broadcasts

50 years from the end Broadcast made when of the year in which the it is delivered by a broadcast is first made: s 95 broadcasting service within the meaning of the Broadcasting Services Act 1992 (Cth)

11

Published editions of works

25 years from the end of the year in which the copyright material is first published: s 96

Published when reproductions of the edition have been supplied (whether by sale or otherwise) to the public: s 29(1)(a)

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Direct Infringement of Copyright — Original Works 4.38 Copyright in original works is infringed where a person, without the copyright owner’s permission, carries out any of the acts comprised in the copyright: Copyright Act s 36. This includes: • reproducing the work in a material form; • publishing the work; • communicating the work to the public; • in the case of literary, dramatic and musical works, performing the work in public; or • making an adaptation of the work. In each case, copyright is only infringed if the impugned act involves the whole or a substantial part of the copyright work: Copyright Act s 14. Thus, in the case of musical copyright, for example, it is only an infringement to reproduce the whole or a substantial part of the musical work, or to communicate the whole or a substantial part of the musical work to the public, or to perform the whole or a substantial part of the musical work in public, or to adapt the whole or a substantial part of the musical work. 159

Marketing and the Law

What is a ‘substantial part of the work’?

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4.39 The expression ‘substantial part of the work’ is not defined in the Copyright Act. However, there is no doubt it refers to the quality (including the originality) of the work, not quantity. Thus, infringement of copyright exists where a vital or material part of the work has been copied: see Cummins v Vella;87 Larrikin Music Publishing Pty Ltd v EMI Songs Australia Pty Ltd;88 Larrikin Music Publishing Pty Ltd v EMI Songs Australia Pty Ltd (No 2);89 Milpurrurru, Marika, Payunka & Public Trustee for the Northern Territory v Indofurn Pty Ltd, Bethune, King & Rylands.90 In assessing whether a substantial part of the work has been copied, the courts have regard to four principal matters:91 1. the amount of material taken, bearing in mind that quality is more important than quantity; 2. how much of the material taken is copyright material and how much is not; 3. whether the defendant’s intention was to take the plaintiff’s work for the purpose of saving himself or herself labour; and 4. the extent to which the plaintiff’s and the defendant’s works compete. Provided that what is taken is the vital or essential part, it is not necessary that it form a quantitatively large part. In Hawkes & Son (London) v Paramount Film Service Ltd,92 the defendant used 30 seconds of the four minute song ‘Colonel Bogey’ as part of a newsreel item. This was held to be an infringement because the part that was copied contained the melody of the song. When determining whether a substantial part of the work has been copied, it is necessary to keep in mind the distinction between the idea and the expression. It is fundamental to copyright law that copyright does not subsist in an idea. Therefore, copying an idea cannot amount to an infringement of copyright. However, distinguishing between the idea and the expression is sometimes very difficult. Ultimately, it must be a question of degree: see Telstra Corporation Ltd v Royal & Sun Alliance Insurance Australia Ltd93 (the Goggomobil commercial).

Unlawful reproduction of a copyright work 4.40 The most obvious case of infringement involves reproducing the whole or a substantial part of the work in a material form. ‘Reproduction’ is not defined in the Copyright Act, but means copying. Establishing an infringement of the reproduction right involves two steps:94 87 88 89 90 91

[2002] FCAFC 218, see 4.40C. (2010) 263 ALR 155; 83 IPR 582; [2010] FCA 29, see 4.45C. (2010) 270 ALR 481; 87 IPR 357; [2010] FCA 698, see 4.45C. (1994) 130 ALR 659; 30 IPR 209, see 4.65C. These were set out by Brightman J in Ravenscroft v Herbert & New English Library Ltd [1980] RPC 193 at 203 when discussing copying of a literary work. 92 [1934] Ch 593. 93 (2003) 57 IPR 453; [2003] FCA 786, see 4.42C2. 94 SW Hart & Co Pty Ltd v Edwards Hot Water Systems (1985) 159 CLR 466; 61 ALR 251; 5 IPR 13; [1985] HCA 59.

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1. proving an objective resemblance or similarity between the copyright work and the alleged copy; and 2. establishing a causal connection between the copyright work and the alleged copy. Cummins v Vella [2002] FCAFC 218 Facts: Vella is a reasonably well-known painter, whose paintings are quite similar to one another. He has done over 150 paintings of daisies in the same style and over 200 of irises. His style of painting is called naïf impasto. Cummins was inspired by the Vella style and produced a number of similar paintings. There were considerable similarities of style, colour, format, and subject matter. However, there were also differences — for example, in the number of flowers, the number and size of petals, etc. Vella sued for copyright infringement and won. Cummins appealed. Decision: The Full Court of the Federal Court said: In respect of each instance of alleged infringement of a Vella painting by a Cummins painting the Court had to decide whether (a) the latter was a copy of the former, that is to say there was (i) sufficient objective similarity to amount to the latter being a reproduction or adaptation of the former and (ii) the former was in fact the source of the latter and, if so, (b) whether the copy was of a substantial part of the Vella work.

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According to the court, not all uses of a copyright work will constitute copying amounting to infringement. There is a distinction between legitimate use of style and technique (the idea), and illegitimate copying of form and expression (the expression). Often that distinction will be difficult to draw. To establish copyright infringement, the similarities between two paintings must go beyond similarities of style, colour, subject matter, and technique. The court allowed the appeal.

There must be a causal connection between the copyright work and the alleged copy. In other words, there is no copyright infringement unless the work has been copied. In Ferntree Homes Pty Ltd v Bohan,95 Ferntree alleged that Bohan had copied one of its project homes in constructing her house. The court accepted that there were many points of objective similarity between the houses. However, Ferntree failed to establish the second element, that is, the causal connection. Ferntree could not demonstrate that Bohan had copied features from its project home. Bohan denied copying, and was able to demonstrate how the ideas for her home were generated. Of course, in many cases the similarity between two works will be such as to give rise to a strong presumption of copying. Copying does not have to be deliberate; it may be subconscious. Subconscious copying of copyright material is as much an infringement of copyright as conscious copying. If, however, the infringement is subconscious, it will be necessary at the very least to produce evidence that the alleged infringer was familiar with the

95 (2001) 54 IPR 267; [2002] FCA 16.

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Marketing and the Law

copyright work.96 For example, in Bright Tunes Music Corp v Harrisongs Music Ltd,97 ex-Beatle George Harrison was found to have subconsciously copied the plaintiff’s musical work, previously recorded as He’s So Fine, in producing the song My Sweet Lord. The court specifically accepted that he had not copied the work deliberately. Copying may be indirect. Direct copying occurs where the alleged infringing copy is made directly from the copyright work; for example, photocopying a book or any other copyright work. Indirect copying occurs where an infringing work is produced not by copying the copyright work, but by reverse engineering or by following a verbal or written description of the copyright work. Thus, copying the design of a yacht by making a mould from an existing boat of that design would infringe copyright in the original design drawings.98

A. Unlawful reproduction of databases 4.41 Simply reproducing all or part of the contents of a database will not amount to copyright infringement per se. The part copied must be a substantial part of an original copyright work.

4.41C

IceTV Pty Ltd v Nine Network Australia Pty Ltd (2009) 239 CLR 458; 254 ALR 386; 80 IPR 451; [2009] HCA 14 Facts: Nine Network produces a Weekly Guide which shows the times and titles of Nine Network’s television programs (along with synopses and other information) for the coming week. Nine Network provides the Weekly Guide to firms which take the information and combine it with information from other networks to produce TV program guides in a variety of formats, including print (eg, TV Week), online (eg, YourTV Guide, Yahoo7 Guide, The OurGuide), mobile (eg, Vodafone), and electronic program guides (eg, Foxtel).

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IceTV decided to produce an interactive electronic program guide to be used in conjunction with certain PVRs (digital recorders) and media centres (computer programs that enable digital TV recording on a PC). As the television networks, other than the ABC and SBS, would not agree to a contract to supply the programming information to IceTV, IceTV hired a person (R), who was experienced in the television industry, to produce a program template. In the case of the Nine Network, he did this by watching Channel Nine Sydney for three weeks and noting down all the programs, their names and timeslots. Then, using his knowledge of television programming, R produced a predicted guide for the coming week for Channel Nine in all states. To ensure the accuracy of the IceTV guide, IceTV hired a team to compare the approved guides (mainly YourTV Guide, Yahoo7 Guide, and The OurGuide) with the predicted IceTV guide. Any differences were then assessed and amendments made to the IceTV guide, if necessary. Generally, the IceTV team adopted the information available in the approved guides, but not always. IceTV created its own program synopses and presented the programming information 96 Francis Day & Hunter Ltd v Bron [1963] Ch 587; (1963) 1A IPR 331; [1963] 2 All ER 16; EMI Music Publishing Ltd v Papathanasiou [1993] EMLR 306. 97 420 F Supp 177 (1976). 98 Shacklady v Atkins & Carroll (1994) 126 ALR 707; 30 IPR 387; Dorling v Honnor Marine Ltd [1965] Ch 1; [1964] 1 All ER 241; [1965] Ch 1.

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Chapter 4: Protecting Copyright Material in its own way. Nine Network sued for copyright infringement (ie, reproduction of the time and title information contained in the Weekly Guide). Decision: The High Court held that there was no infringement of copyright. IceTV had only taken the time and title information from the Weekly Guide. As this information required little labour or skill to produce, it did not amount to a substantial part of the overall copyright work (that is, assuming that there was copyright in the Weekly Guide, which the High Court was not convinced about).

B. Unlawful reproduction of themes, characters, and settings 4.42 Problems can arise where a person copies not the actual text of the original work, but the themes, characters, and settings. In some cases it will be difficult to determine whether the defendant has copied the idea or the expression. Ultimately it must be a question of degree. Zeccola v Universal City Studios Inc (1982) 46 ALR 189 Facts: Zeccola produced a film called Great White, which was the story of a killer shark that terrorised holiday makers at a seaside resort during the holiday season. Universal Studios claimed that this was an infringement of its copyright in the book and screenplay of Jaws, a story about a killer shark that terrorised holiday makers at a seaside resort during the holiday season.

4.42C1

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Decision: The Federal Court held that the marked degree of similarity between the two went beyond legitimate copying of an idea and amounted to infringement of copyright.

In contrast, an attempt to sue the publisher of the hugely successful novel, The Da Vinci Code, for infringement of copyright subsisting in an earlier, non-fiction book that discussed the religious themes on which The Da Vinci Code is based, failed. Although The Da Vinci Code borrowed themes from the earlier book, the use of these themes amounted to borrowing abstract ideas and not copyright infringement.99 JK Rowling, the author of the Harry Potter books, was more successful in stopping the publication of a lexicon based on her novels.100 Telstra Corporation Ltd v Royal & Sun Alliance Insurance Australia Ltd (2003) 57 IPR 453; [2003] FCA 786 Facts: Between 1992 and 1998, Telstra ran a series of very successful advertisements for the Yellow Pages featuring the actor Tommy Dysart, a telephone, and a unique automobile, the Goggomobil. Dysart became known as ‘Mr Goggomobil’. In a gently humorous fashion, the ads depict Dysart using the phone to solve a problem relating to his Goggomobil. In 2000, Royal & Sun Alliance Insurance acquired an insurer called Shannons, which specialised in insuring vintage motor vehicles. In 2002 Shannons developed two advertisements featuring

99 Baigent v Random House Group Ltd (2006) 69 IPR 143; [2006] EWHC 719 (Ch). 100 Warner Bros Entertainment Inc v RDR Books 575 F Supp 2d 513 (2008).

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Marketing and the Law Tommy Dysart and the Goggomobil. In the first advertisement Dysart is shown using the phone to arrange insurance for his Goggomobil. Telstra argued that copyright subsisted in its advertisements (the scripts) as literary and dramatic works, and that Shannons had infringed that copyright. Telstra also claimed passing off and a breach of s 52 of the Trade Practices Act 1974 (Cth). Decision: Shannons were entitled to reproduce the ideas, concepts, or theme embodied in the Goggomobil advertisement, provided the expression was not copied. Although there were many similarities (for instance, Dysart, the Goggomobil, the use of a telephone to solve a problem, and humour), the scripts and the dramatic events occurring in the advertisements were quite different. Although the Shannons advertisement conjures up the Telstra advertisement, it ‘does not use substantially the same dialogue, and the setting or structure of the first Shannons’ advertisement is sufficiently different to fall well short of a “substantial” reproduction of the first Goggomobil advertisement’. There was no infringement of copyright. However, Shannons’ conduct amounted to passing off and a breach of s 52 of the Trade Practices Act (now s 18 of the Australian Consumer Law).

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C. Unlawful reproduction of computer programs 4.43 As with other works, computer programs are only infringed if a substantial portion of the work is copied. Again it is important to keep in mind the distinction between the idea and the expression of an idea. In Autodesk Inc v Dyason (No 1),101 the High Court held that the test to be applied to determine whether a substantial part of a computer program had been copied was to analyse whether the part copied was critical or essential to the program’s operation. The part of the program that had been copied only amounted to 127 bits, which is just enough to create a 16 letter word. The decision was criticised on the basis that it protected an idea rather than the expression of the idea (the two programs were really similar only in performing the same function), and on the basis that the material copied was insubstantial. The test for substantiality was criticised as being no more than a ‘but for’ test — but for the part copied, the program would not operate as intended. However, every part of a computer program is critical to its proper functioning. Therefore, every part of a program, no matter how small, would be a substantial part. An attempt to have the case re-opened narrowly failed.102 In Data Access Corporation v Powerflex Services Pty Ltd,103 the High Court held that the test applied in Autodesk Inc v Dyason (No 1)104 ought not to be followed. To determine whether a copy of a part of a computer program is a reproduction of a substantial part of that program, it is necessary to consider the originality of the part copied. The question to be asked is whether the copy has taken a substantial amount of the original structure of the program, its choice of commands, and its combination and 101 (1992) 173 CLR 330; 104 ALR 563; 22 IPR 163. 102 Autodesk Inc v Dyason (No 2) (1993) 176 CLR 300; 67 ALJR 270; 111 ALR 385. 103 (1999) 166 ALR 228; 45 IPR 353; [1999] HCA 49. 104 (1992) 173 CLR 330; 104 ALR 563; 22 IPR 163.

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sequencing of commands. Merely taking a few command words such as ‘chart’ and ‘autofind’ did not satisfy this test. They were trigger words which largely described their function, and which could easily be replaced by any other command words.

D. Unlawful reproduction of artistic works 4.44 Infringement cases involving artistic works can be very problematic. Not only is the distinction between the idea and the expression often difficult, but so also is the issue of ‘substantiality’. In Elwood Clothing Pty Ltd v Cotton On Clothing Pty Ltd105 these difficulties were compounded by an initial dispute over whether the work was a literary work or an artistic work. Some of the issues were discussed in Cummins v Vella.106 Elwood Clothing Pty Ltd v Cotton On Clothing Pty Ltd (2008) 172 FCR 580; 80 IPR 566; [2008] FCAFC 197 Facts: Elwood Clothing produced the T-Shirts shown below. Cotton On Clothing produced a range of T-Shirts that were designed to have the look and feel of the Elwood designs, but with different content. A sample of the Cotton On clothing is also shown below. Elwood sued for copyright infringement of an artistic work. Cotton On claimed that the works were literary works and that the literary content of their clothes was different.

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Elwood Clothing

Cotton On Clothing

105 (2008) 172 FCR 580; 80 IPR 566; [2008] FCAFC 197, see 4.44C. 106 [2002] FCAFC 218, see 4.40C.

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Marketing and the Law Decision: The Elwood designs are artistic works, ‘of which the words and numbers, including their size, font, placement and spatial relationships with other elements, form a part’. The meaning conveyed by the words and numbers is too insubstantial and vague to constitute literary works. Such meaning as is conveyed is derived from the layout, the visual look, and feel of the design. Did the Cotton On designs reproduce a substantial amount of the Elwood original artistic work? The Cotton On designs differed in the content of the words and numbers, but not in the layout or look and feel. The trial judge found in favour of Cotton On on the basis that the look and feel of the Elwood design was an idea and thus not protectable. The Full Federal Court disagreed and held that, in the circumstances, Cotton On (by reproducing the look and feel of the Elwood design) had infringed copyright in the Elwood artistic work. An injunction was granted to prevent Cotton On making, selling, or dealing in the Cotton On designs that infringed the Elwood copyright.

In Advantage-Rent-A-Car Inc v Advantage Car Rental Pty Ltd,107 the court had to determine whether the logo used by Advantage Car Rental (the Australian firm) infringed copyright in the logo which had been used for a number of years by Advantage-Rent-A-Car (the US firm). If the Australian firm’s logo infringed copyright, it could not be registered under the Trade Marks Act.108 Copyright subsisted in the US firm’s logo as an original artistic work: see Roland Corporation v Lorenzo & Sons Pty Ltd.109 The Australian firm’s trade mark substantially reproduces the US firm’s copyright and is therefore an infringement.

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Australian trade mark

US trade mark

Reproducing a photograph involves copying the actual photograph, not taking another photograph of the same scene. Making a three-dimensional representation from a two-dimensional work, such as a drawing or a painting, is a reproduction of the two-dimensional work: Copyright Act s 21(3). Thus, to make brooches, charms, plaster dolls, and mechanical toys out of the cartoon character ‘Popeye the Sailor’, amounted to an infringement of the copyright in the two-dimensional cartoon drawings: King Features Syndicate Inc v O & M Kleeman Ltd.110 However, the three-dimensional representation must bear sufficient resemblance to the original to conclude that it is a copy. If the three-dimensional representation is merely based on the idea

107 (2001) 52 IPR 24; [2001] FCA 683. 108 Under s 42(b) of the Trade Marks Act 1995, a mark cannot be registered if its use would be contrary to law. Use of a mark that infringes copyright would be use contrary to law. 109 (1991) 105 ALR 623; 22 IPR 245, see 4.17. 110 [1941] AC 417; (1940) 1B IPR 215; [1941] 2 All ER 403.

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of the original or is concerned with the original but does not bear the necessary resemblance, then there will be no infringement of copyright.

E. Unlawful reproduction of musical works 4.45 A case involving two very well-known Australian songs highlights the care that must be taken when seeking inspiration from previous works. Larrikin Music Publishing Pty Ltd v EMI Songs Australia Pty Ltd (2010) 263 ALR 155; 83 IPR 582; [2010] FCA 29; Larrikin Music Publishing Pty Ltd v EMI Songs Australia Pty Ltd (No 2) (2010) 270 ALR 481; 87 IPR 357; [2010] FCA 698 Facts: Larrikin was the owner of copyright in the music for the song ‘Kookaburra sits in the old gum tree’. Men at Work recorded a song for EMI entitled ‘Down Under’. Down Under contained a short flute riff which reproduced two bars out of four from the Kookaburra song. Larrikin sued for copyright infringement. Decision: To the ‘ordinary reasonably experienced listener’ the flute riff from Down Under reproduced a substantial part of the original musical work contained in the Kookaburra song. Therefore, there was copyright infringement. However, the flute riff (while being a substantial part of the Kookaburra song) did not form a substantial part of the Down Under song, and, in fact, it was difficult to detect the use of the Kookaburra song in the Down Under song. Therefore, the damages (based on a licence fee) were at the lower end (assessed by the court at 5%).

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Unlawful performance of a work in public 4.46 Copyright includes the exclusive right to perform a work in public. It also includes the right to communicate the work to the public. What is meant by ‘in public’ and ‘to the public’? For example, can a firm play recorded music in the lifts of its building, or to its employees on the factory floor, or to its customers in a shop? The critical factor in determining the ‘public’ is the character of the audience and not the number of persons involved. If the unauthorised performance was made to the copyright owner’s public or a part of that public, the performance was made in public: Telstra Corporation Ltd v Australasian Performing Right Association Ltd111 (the music on hold case). Was the performance such that the author might have expected to receive a fee? This is what distinguishes a performance in public from a performance that can be characterised as domestic or private. Thus, the playing of films transmitted by a video cassette recorder to television sets in motel rooms by the proprietor of the motel was held to be in public: Rank Film Production Ltd v Dodds.112 Playing music over a loudspeaker in a shop, even a music shop, would infringe the public performance right: Performing Right Society 111 (1997) 146 ALR 649; 71 ALJR 1312; 38 IPR 294; [1997] HCA 41. 112 [1983] 2 NSWLR 553.

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Ltd v Harlequin Record Shops Ltd;113 but playing music at a large but private party would not: Performing Right Society Ltd v Rangers FC Supporters Club, Greenock.114 Playing recorded music to employees in a factory has been held to be ‘in public’: Ernest Turner Electrical Instruments Ltd v Performing Right Society Ltd.115 Allowing a performance of a copyright work in front of 11 employees as part of a training program has also been held to be an infringement: Australasian Performing Right Association Ltd v Commonwealth Bank of Australia.116 Can a telephone company transmit ‘music on hold’ to users of mobile phones? In Telstra Corporation Ltd v Australasian Performing Right Association Ltd117 the High Court held that the transmission of ‘music on hold’ to conventional and mobile telephones was to the public. Although each telephone call is private, the provision of music on hold is part of a commercial undertaking. Thus, it is a transmission to the public.

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Unlawful communication of a work to the public 4.47 ‘Communicate’ means to make a work or other subject matter, including a performance or live performance within the meaning of the Copyright Act, available online or to transmit it electronically (whether over a path or a combination of paths provided by a material substance or otherwise): Copyright Act s 10. A communication other than a broadcast is taken to have been made by the person responsible for determining the content of the communication. In practice this means the person who uploads the material and makes it available online is the one who makes the communication, rather than a downloader. An example concerning website hyperlinks illustrates this point. In Cooper v Universal Music Australia Pty Ltd118 Tamberlin J held that it is not the facilitator’s website but rather the computer/website on which the material is stored that makes available or transmits the material for the purposes of determining who has made a communication:119 The Cooper website contains hyperlinks to thousands of sound recordings which are located on remote websites and are downloaded directly from those websites to the computer of the internet user. When a visitor to the Cooper website clicked on a link on the website to an MP3 file hosted on another server, this caused the user’s browser to send a ‘GET’ request to that server, resulting in the MP3 file being transmitted directly across the internet from the host server to the user’s computer. The MP3 file does not pass through or via or across the Cooper website. 113 114 115 116 117 118 119

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[1979] 2 All ER 828. [1975] RPC 626 at 634 per Clerk LJ. [1943] Ch 167; [1943] 1 All ER 413. (1992) 111 ALR 671; 25 IPR 157. (1997) 146 ALR 649; 71 ALJR 1312; 38 IPR 294; [1997] HCA 41. (2006) 71 IPR 1. (2006) 71 IPR 1 at 65.

Chapter 4: Protecting Copyright Material The Cooper website facilitates the easier location and selection of digital music files and specification to the remote website. However, the downloaded subject matter is not transmitted or made available from the Cooper website and nor does the downloading take place through the Cooper website. While the request that triggers the downloading is made from the Cooper website, it is the remote website which makes the music file available and not the Cooper website.

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Direct Infringement of Copyright — Pt IV SMOTW 4.48 Copyright in Pt IV Subject Matter other than Works is infringed (s 101 of the Copyright Act) by doing, without the copyright owner’s permission, any of the things set out in: • s 85 of the Copyright Act (sound recordings); • s 86 of the Copyright Act (films); • s 87 of the Copyright Act (television and sound broadcasts); and • s 88 of the Copyright Act (published edition of works). For example, making a copy of a sound recording, film, or broadcast without permission amounts to copyright infringement. Causing a recording or film to be heard or seen in public without permission is also an infringement. Communicating the sound recording, film, or broadcast to the public without permission infringes the copyright. In Dallas Buyers Club LLC v iiNet Ltd120 the Federal Court considered whether individuals sharing parts of the film The Dallas Buyers Club online via BitTorrent peer to peer file sharing could be liable for copyright infringement by ‘communicating’ a part of the film to the public in contravention of the copyright owner’s exclusive rights under s 86. The court granted the application to compel ISPs to disclose the identity of the 4726 Australian file sharers, being satisfied as to a real possibility that the IP addresses of the 4726 individuals identified by the investigators hired by the film company were being utilised by end-users who were breaching copyright in the film by making it available for sharing online using BitTorrent.121 Connect TV Pty Ltd v All Rounder Pty Ltd (No 5)122 concerned infringement of right to communicate a television broadcast to the public, in this case via online streaming of the original Russian TV program to Australian customers who accessed the broadcast using a set-top box and codes provided to them by All Rounder. The court found that as All Rounder was responsible for determining what, if any, part of the Russian television broadcast should be made available to 120 (2015) 327 ALR 670; 112 IPR 1; [2015] FCA 317. 121 (2015) 112 IPR 1 at 31. 122 (2016) 338 ALR 96; 118 IPR 133; [2016] FCA 338.

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consumers in Australia via its set-top boxes, it was liable for communicating the broadcast to the public in breach of the copyright owner’s rights under s 86. As with works, infringement only applies if the impugned act involves a substantial part of the copyright material. Thus, in the case of a film it is only an infringement to copy a substantial part of the film, or to communicate a substantial part of the film to the public, or to cause a substantial part of the film to be seen in public. What amounts to a substantial part of a film or television program?

4.48C

TCN Channel Nine Pty Ltd v Network Ten Pty Ltd (No 2) (2005) 216 ALR 631; 65 IPR 571; [2005] FCAFC 53 Facts: The court had to determine whether certain short excerpts copied from Channel Nine programs by Channel Ten’s The Panel infringed Channel Nine’s copyright in those programs. For example, The Panel showed 17 seconds from Nine’s Midday program which lasted over one hour. This excerpt showed the Prime Minister, Mr Howard, singing ‘Happy Birthday’ to Sir Donald Bradman. In another example, The Panel showed 10 seconds from Channel Nine’s broadcast of the ‘Inaugural Allan Border Medal Dinner’ for the best cricketer of the year. The program lasted over two hours. The excerpt focused on Glenn McGrath, as he was announced as the winner of the award.

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Decision: In determining whether the excerpts amounted to a substantial part of the respective programs, Finkelstein J said that quality not quantity was the key. The question is whether the excerpt constitutes ‘the heart’ of the program, ‘an essential part’ of the program, ‘an important ingredient’ in the program, ‘the best scenes’ from the program, ‘the highlights’ of the program, ‘the most valuable and pertinent portion’ of the program. This is the main test. In some marginal cases it may also be ‘necessary to consider factors such as the plaintiff’s financial interest as well as the defendant’s purpose’. All three Justices decided that the Prime Minister segment was a substantial part of the Midday program. Two out of three judges thought that the Glenn McGrath segment was an infringement.

Defences 4.49 The Copyright Act sets out a number of situations where it is permissible to use copyright material without infringing the owner’s rights.

Fair dealing 4.50 An important suite of defences to copyright infringement are known as ‘fair dealing’. Fair dealing for certain enumerated purposes set out in the Copyright Act will not infringe the copyright owner’s exclusive rights. Fair dealing for the purposes of research or study, criticism or review, parody or satire, news reporting, and for access by persons with a disability is permitted: Copyright Act ss 40–42, 103A–103C and 113E. Fair dealing means using no more than a reasonable portion of the copyright material. The fair dealing defences were discussed in TCN 170

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Channel Nine Pty Ltd v Network Ten Pty Ltd.123 There is no statutory definition of what constitutes parody or satire although the Federal Court in Pokémon Company International, Inc v Redbubble Ltd124 considered the defence of fair dealing with the artistic work for the purposes of parody or satire. Redbubble offered print on demand products featuring a Pokémon video game character, Pikachu. It was held that the defence was not available in the circumstances where Redbubble had used Pokémon’s artistic work without permission given the lack of evidence that the infringing work had been for the purpose of parody or satire. Instead the court found that Redbubble was using Pokémon’s copyright work for profit and that the fact that ‘some of the infringing works may be humorous, or even satirical or parodies, does not establish that the use was for a purpose where it may fairly be concluded that the purpose was not the parody or satire but the commercial exploitation of the original work in modified form.’125 In Australia, the fair dealing exceptions are narrow, limited, and very specific. Several reviews, most recently by the Productivity Commission,126 have recommended that the Copyright Act be amended to replace the current very specific fair dealing defence to copyright infringement with a broad fair use exception modelled on the defence in the United States. The government has started a consultation process to consider this recommendation.127

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Dealing with computer programs 4.51 Sections 47AB–47H of the Copyright Act set out a range of situations where it is permitted to reproduce or adapt a computer program. In such cases copyright is not infringed. It is permitted to make a copy of a computer program: • where the copy is made incidentally and automatically as part of the technical process of running the program: – for its normal use; or – for the purpose of studying the ideas behind the program and the way in which it functions; • as a back-up copy; • for the purposes of ascertaining information about the program necessary to create interoperable programs; • to correct errors; and • to test for security.

123 (2005) 216 ALR 631; 65 IPR 571; [2005] FCAFC 53. 124 (2017) 351 ALR 676; 129 IPR 1; [2017] FCA 1541. 125 (2017) 129 IPR 1 at 70. 126 Productivity Commission, Intellectual Property Arrangements, Inquiry Report, No 78, 23 September 2016, available at . 127 Department of Communications and the Arts, Copyright modernisation consultation paper, 19 March 2018, available at .

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Making copies for personal use 4.52 Certain common, typically private, and domestic uses have been added to the Copyright Act as exceptions to infringement. For example, you can make a backup copy of a computer program: Copyright Act s 47C; make an electronic scan of a hardcopy photograph for personal use (format shifting): Copyright Act s 47J; or record a television show so you can watch it at a more convenient time (time shifting): Copyright Act s 111.

Copying industrial products 4.53 The relevant copyright infringement defence provisions are ss 74–77A of the Copyright Act. The basic idea behind these provisions is that copyright protection should not be available to prevent copying of industrial products. The clear thrust is that industrial products ought to be protected mainly by registration pursuant to the Designs Act 2003 (Cth).

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A. Where a corresponding design is registered under the Designs Act 4.54 Section 75 of the Copyright Act provides that, where copyright subsists in an artistic work and a corresponding design is or has been registered under the Designs Act, it is not an infringement of that copyright to reproduce the work by embodying that, or any other, corresponding design in a product. A ‘product’ is defined in the Designs Act as a thing that is manufactured or handmade, and may include a component part and a thing of indefinite length. A ‘corresponding design’ in relation to an artistic work means visual features of shape or configuration which, when embodied in a product, result in a reproduction of that work, whether or not the visual features constitute a design that is capable of being registered under the Designs Act. The definition of ‘corresponding design’, therefore, excludes ‘pattern or ornamentation’ designs. In other words, if the design is essentially two-dimensional (a flat design), it can be registered under the Designs Act without losing copyright protection. For example, an original drawing will not lose copyright protection just because it is registered under the Designs Act for use on curtains or carpets. If, however, the design involves shape or configuration (a three-dimensional design), it will lose copyright protection by virtue of s 75 of the Copyright Act.

B. Where a corresponding design is not registered under the Designs Act and the design has been applied industrially 4.55 Section 77(2)(a) of the Copyright Act provides a defence to copyright infringement where: • a design corresponding to an artistic work is not registered under the Designs Act or is not capable of being registered; and 172

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• a person reproduces the work by embodying the design (or any other corresponding design) in a product; and • the design has been industrially applied and the resulting products have been offered for sale in Australia or anywhere in the world. ‘Product’ and ‘corresponding design’ have the same meaning as discussed above. When has a design been ‘applied industrially’? This is a question of fact. In PressForm Pty Ltd v Hendersons Ltd,128 the production of 41 bus seats as prototypes was held to be industrial application; in Kevlacat Pty Ltd v Trailcraft Marine Pty Ltd,129 the production of eight catamarans from a mould was held to be an industrial application. In any event, the Copyright Regulations 2017 (Cth) provide that once the design has been applied to 50 articles, industrial application is deemed to have occurred: reg 12(1). The copyright infringement defence in s 77 of the Copyright Act does not apply to: • two-dimensional designs (because they fall outside the definition of a corresponding design); • buildings or models of a building; or • works of artistic craftsmanship. Thus, other than the exceptions just mentioned, anyone may copy the design embodied in a product once it has been industrially applied and the resulting products have been offered for sale without being liable for copyright infringement.

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C. Where a corresponding design is not registered under the Designs Act and the design appears in a patent specification or a design application 4.56 Section 77(1A) of the Copyright Act provides that copyright infringement is not available against a person in the following circumstances: • a design corresponding to an artistic work is not registered under the Designs Act or is not capable of being registered; and • a product made to the corresponding design is revealed in a patent specification or a design application. Digga Australia Pty Ltd v Norm Engineering Pty Ltd (2008) 245 ALR 407; 75 IPR 251; [2008] FCAFC 33 Facts: Norm Engineering (Norm) designed a new industrial bucket to be used with Bobcat equipment. The Norm bucket could perform a number of functions and is referred to in its marketing literature as the ‘4 in 1 bucket’. The new design was contained in a number of drawings as well as in the final product. The new design was not registered under the Designs Act and was not the subject of a patent grant.

128 (1993) 112 ALR 671; 26 IPR 113. 129 (1987) 79 ALR 534; 11 IPR 77.

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Marketing and the Law Digga Australia acquired one of the 4 in 1 buckets and, through a process of reverse engineering, produced its own 4 in 1 bucket. Norm sued for infringement of copyright in the drawings. Digga argued that, even if Norm’s copyright claim was valid, the defences under ss 74–77A of the Copyright Act applied. Decision: Copyright subsisted in the drawings. Digga had not copied the drawings, but it had copied the product which was based on those drawings. Therefore, there was copyright infringement, unless s 77 applied. Norm’s 4 in 1 bucket embodied a design that corresponded to the artistic work (the drawings). Norm had industrially applied the design. The design had not been registered under the Designs Act. Therefore, Digga had not infringed Norm’s copyright by producing its own copy of the 4 in 1 bucket.

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Indirect Infringement of Copyright — Authorising Infringement 4.57 It is an infringement of copyright to authorise infringement by another person: Copyright Act ss 36 and 101 (Pt IV material). To authorise something is to ‘sanction, approve, countenance’ or even permit that thing. Evidence of express or formal permission is not necessary. In appropriate circumstances ‘inactivity’ or ‘indifference’ may be sufficient. Ultimately, ‘authorisation’ is a question of control. Sections 36(1A) (works) and 101(1A) (Pt IV material) provide that in determining whether an infringement of copyright has been authorised, the court must take into account all relevant matters, including: • the extent (if any) of the person’s power to prevent the doing of the act concerned; • the nature of any relationship existing between the person and the person who did the act concerned; and • whether the person took any reasonable steps to prevent or avoid the doing of the act, including whether the person complied with any relevant industry codes of practice.

Libraries 4.58 In University of New South Wales and Angus & Robertson (Publishers) Pty Ltd v Moorhouse,130 Frank Moorhouse, a well-known Australian author, was successful in alleging authorisation against a university library which took no steps to prevent students and staff from infringing copyright by use of a photocopying machine. As a result of this case, the Copyright Act was changed to protect libraries from claims of authorisation, provided the library put up a notice bringing the provisions of the Copyright Act to the notice of users of the photocopier. In the online context, 130 (1975) 133 CLR 1; 6 ALR 193; [1975] HCA 26.

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recent amendments to the Copyright Act also protect libraries against charges of infringement by authorisation where use has been made of the online resources of a library.

Clubs and other live music venues 4.59 The owners of copyright in musical and literary works face obvious difficulties in detecting infringements of their rights. This is particularly so in respect of songs. The musical and literary copyright in a song is potentially infringed whenever the song is performed live by a cover band, or whenever a recording of the song is played at a public venue or bar or played over the radio or on television. For this reason, most copyright owners are members of APRA AMCOS, previously known as the Australasian Performing Right Association Ltd. Members assign the performance and communication rights in their work to APRA AMCOS, which then negotiates agreements with the radio and television stations, owners of music venues, event promoters, and others. APRA AMCOS also monitors live, broadcast, and other performances to ensure compliance with the Copyright Act. In Australasian Performing Right Association Ltd v Canterbury-Bankstown League Club Ltd,131 the club was held to have authorised infringement of copyright in respect of music performed by the orchestra at club dances. The club had no knowledge of the music to be played by the orchestra, nor did it seek to be consulted on the matter. However, by giving the orchestra general authority to play what it wished, the club had authorised the orchestra within the meaning of s 36 of the Copyright Act. A similar result was reached in Australasian Performing Right Association Ltd v Jain.132

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Australasian Performing Right Association Ltd v Metro on George Pty Ltd (2004) 210 ALR 244; 61 IPR 575; [2004] FCA 1123 Facts: Metro on George (the venue) was a popular venue in Sydney for cabarets, award nights, and theatrical performances. Many of these occasions involved live musical performances. The company Metro on George Ltd (Metro) controlled the venue, but did not run the performances. Rather, Metro hired the venue to independent promoters. Metro, however, supplied the bar facilities, promotional advertising, security, and, if required, ticketing services. Metro had no control over, or input into, the choice of songs performed. All persons who hired the venue were required to sign a contract, in which the hirer warranted that: Metro does not authorise or permit any particular performance whether containing copyright material or otherwise. The Hirer warrants that it will ensure all performances at the event will comply with the Copyright Act and the licence requirements of the Australian Performing Right Association [APRA]. Despite warnings from APRA, music continued to be performed at the venue without the proper licence from APRA. APRA sued.

131 [1964–5] NSWR 138. 132 (1990) 26 FCR 53; 96 ALR 619; 18 IPR 663.

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Marketing and the Law Decision: The court held that Metro had authorised the copyright infringements because it was in control of how the premises were used. Metro had not taken any reasonable steps (within the meaning of s 36(1A)(c) of the Copyright Act) to prevent or avoid the copyright infringements. The term of the hiring contract was insufficient in the circumstances.

Hardware and modern software technology 4.60 Reproduction technology — whether hardware products (such as tape recorders, video recorders, and CD recorders) or software products (such as digital compression technology, including MP3 and file-sharing systems like BitTorrent) — has created problems for copyright owners. The problem is essentially a s 36 problem. As it is impossible to track down every person who copies a piece of music without permission, copyright owners have concentrated on pursuing those who could be said to have authorised such infringement. In the days before the advent of modern software technology, the first target was manufacturers of twindeck tape recorders: see CBS Songs Ltd v Amstrad Consumer Electronics plc133 and Amstrad Consumer Electronics plc v British Phonographic Industry Ltd.134

4.60C

CBS Songs Ltd v Amstrad Consumer Electronics plc [1988] AC 1013; [1988] 2 All ER 484; (1988) 11 IPR 1 Facts: CBS alleged that Amstrad had authorised illegal taping by manufacturing and selling twin-deck tape recording machines.

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Decision: The House of Lords rejected the argument. ‘Authorising’ meant to ‘sanction, approve or countenance’. On the facts, Amstrad had not done this. The twin-deck tape recorder had legitimate uses and Amstrad had no control over the use to which the recorders were put after purchase.

Thus, provided manufacturers of reproduction equipment are careful in their advertising not to sanction, approve, or countenance illegal taping, they will not be liable for illegal taping done by those who purchase their equipment. The High Court reached a similar conclusion in relation to the sale of blank tapes in Australian Tape Manufacturers Association Ltd v Commonwealth of Australia.135

Software 4.61 Can the provider of software platforms such as Pirate Bay be held liable under s 36 of the Copyright Act because the software is used to locate and copy films or music without authorisation? The key to this issue is the meaning of ‘authorise’. 133 [1988] AC 1013; [1988] 2 All ER 484; (1988) 11 IPR 1, see 4.60C. 134 [1986] FSR 159. 135 (1993) 176 CLR 480; 112 ALR 53; 25 IPR 1.

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In the US an injunction was granted against file sharing website Napster in A&M Records Inc v Napster Inc.136 Napster differs from tape manufacturers in two respects. First, it was aware that its users were infringing copyright and, second, it has the power to control access by such users. In Metro-Goldwyn-Mayer Studios Inc v Grokster Ltd,137 the US Supreme Court held Grokster and Streamcast liable for authorising infringement of US copyright law. According to the Court, where a person distributes a device with the purpose of promoting its use to infringe copyright (as evidenced by clear expression or other affirmative steps taken to foster infringement, which goes beyond mere distribution), he or she is liable for infringement. In Australia, the file sharing site Kazaa was held liable for authorising copyright infringement: see Universal Music Australia Pty Ltd v Sharman Licence Holdings Ltd.138

Website linking

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4.62 In Cooper v Universal Music Australia Pty Ltd,139 Cooper ran a website that linked users of his website to MP3 music files. Most of the links were provided by site users. Cooper knew this. Indeed, the links could not have been added without Cooper making the appropriate facility available. Cooper did not have permission from the copyright owners to do this. No songs were stored on Cooper’s computers. By clicking on the hyperlink, the website users downloaded copies of songs without permission. The copyright owners argued that Cooper had unlawfully authorised infringement of their copyright. Each time one of the website users downloaded a song without permission, they infringed copyright. The court held that Cooper knowingly approved of and permitted his website to be used to infringe copyright. Cooper had sufficient control of his own website to take steps to prevent the infringements, but failed to do so.

ISPs 4.63 Can an Internet service provider (ISP) be liable for authorising infringement of copyright? Where the ISP is fully aware of the infringement and takes an active role in the acts that constitute the infringement, the ISP is clearly liable: see Cooper v Universal Music Australia Pty Ltd.140 However, the ISP is not liable just because a subscriber uses the facility provided to engage in infringement of copyright: Copyright Act s 112E. There must be evidence that the ISP sanctioned, approved, or countenanced the infringement.

136 (2000) 50 IPR 232; 239 F 3d 1004 (2001). 137 125 SCt 2764 (2005). 138 (2005) 220 ALR 1; 65 IPR 289; [2005] FCA 1242. 139 (2006) 237 ALR 714; 71 IPR 1; [2006] FCAFC 187. 140 (2006) 237 ALR 714; 71 IPR 1; [2006] FCAFC 187, see 4.62.

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4.63C

Roadshow Films Pty Ltd v iiNet Ltd (2012) 248 CLR 42; 286 ALR 466; 95 IPR 29; [2012] HCA 16 Facts: This action was brought by 34 of the major motion picture studios, including Universal, Disney, Paramount, Warner Bros, Twentieth Century Fox, and Village Roadshow (the companies’ representative was AFACT, the Australian Federation Against Copyright Theft) against iiNet, the second largest ISP in Australia. A number of iiNet’s subscribers and users made unlawful copies of films on the Internet using a peer-to-peer system known as BitTorrent. iiNet had no control over and no involvement in the operation of the BitTorrent system. The applicants provided details of these infringements to iiNet with a view to iiNet taking certain steps to put a stop to the contraventions (AFACT notices). The applicants wanted iiNet to send a letter of warning to the relevant subscribers. If the warning did not stop the infringements, the applicants wanted iiNet to suspend services to the relevant subscribers. The applicants also wanted iiNet to block certain websites. iiNet failed to take any of these steps. As a result, the applicants alleged that iiNet was authorising copyright infringement. At first instance, Cowdroy J held that iiNet did not authorise copyright infringement. Roadshow’s appeal to the Full Federal Court was dismissed. Special leave to appeal to the High Court was given to AFACT. Decision: The High Court unanimously dismissed the appeal. iiNet did not authorise the infringement. French CJ, Crennan, and Kiefel JJ concluded that:

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iiNet should be taken to have authorized the infringements unless it took measures with respect to its customers, assumes obligations on the part of an ISP which the Copyright Act does not impose … The extent of iiNet’s power was limited to an indirect power to prevent a customer’s primary infringement of the [plaintiffs’] films by terminating the contractual relationship between them. The information provided in the AFACT notices, as and when they were served, did not provide iiNet with a reasonable basis for sending warning notices to individual customers containing threats to suspend or terminate those customers’ accounts. For these reasons, iiNet’s inactivity after receipt of the AFACT notices did not give rise to an inference of authorisation (by ‘countenancing’ or otherwise) of any act of primary infringement by its customers.

In Roadshow Films Pty Ltd v iiNet Ltd,141 the High Court hinted that legislative reform might be needed in this area, stating that ‘[t]he difficulties of enforcement which such infringements pose for copyright owners have been addressed elsewhere … by specially targeted legislative schemes …’.142 The government has now taken up this challenge, see 4.71.

141 (2012) 248 CLR 42; 286 ALR 466; 95 IPR 29; [2012] HCA 16, see 4.63C. 142 At [79].

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Safe Harbour Defences for Online Intermediaries 4.64 Part V Div 2AA (ss 116AA–116AJ) of the Copyright Act sets out what is known as a safe harbour regime of limited defences for service providers who may otherwise be considered liable for authorising copyright infringement when their facilities or services are used to upload or transmit copyright infringing material. In order to take advantage of this defence, service providers must comply with conditions aimed at reducing online copyright infringement. These conditions include what is known as the notice and takedown regime, pursuant to which service providers must takedown or disable access to allegedly infringing online copyright material upon receipt of a notice from the copyright owner: s 116AH(1). Initially the safe harbour regime only applied to ‘carriage service providers’. This is compared to other countries such as the USA where the defence extends to a much broader range of online service providers, capturing search engines, social media platforms, YouTube and other content hosts. Australia’s provisions are essentially limited to ISPs and, as of December 2018,143 a select range of other providers. These 2018 amendments extended the safe harbour regime to a very limited range of service providers: an organisation assisting persons with a disability; libraries, archives, key cultural institutions and educational institutions.

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Indirect Infringement — Importing and Dealing 4.65 Copyright is infringed by a person who, without the licence of the owner of the copyright, imports an article into Australia for the purpose of selling, hiring, distributing, or exhibiting by way of trade the article, if the importer knew, or ought reasonably to have known, that the making of the article would, if the article had been made in Australia by the importer, have constituted an infringement of the copyright: Copyright Act ss 37 (works) and 102 (SMOTW). Milpurrurru, Marika, Payunka & Public Trustee for the Northern Territory v Indofurn Pty Ltd, Bethune, King & Rylands (1994) 130 ALR 659; 30 IPR 209 Facts: Indofurn imported some carpets to Australia which were made in Vietnam. The design on the carpets was based on certain Aboriginal paintings which Indofurn had selected and

143 Copyright Amendment (Service Providers) Act 2018.

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Marketing and the Law supplied to the carpet weavers. Indofurn did not ask permission from the artists. Because of cultural and religious significance, permission would never have been granted. The carpets did not follow the paintings exactly. They were altered to make them less ‘complicated’ and more marketable. Nevertheless, the essential and distinctive features were taken. The plaintiff sued Indofurn and its directors under s 37 of the Copyright Act, which prohibits the importation of material that infringes copyright. Decision: The evidence clearly established that the defendant had acted with the intention of taking from the applicants’ paintings so as to save the time and labour of creating an appropriate work itself. Indofurn was held liable under s 37 of the Copyright Act for knowingly importing infringing works and was ordered to pay damages. The directors were also held liable. The non-executive directors were successful in their appeal against liability: see King & Rylands v Milpurrurru, Marika, Payunka & Public Trustee (NT).144

Copyright is also infringed by a person who, without the licence of the owner of the copyright, sells, hires, distributes, or exhibits by way of trade the article, if the person knew, or ought reasonably to have known, that the making of the article constituted an infringement of the copyright or, in the case of an imported article, would, if the article had been made in Australia by the importer, have constituted such an infringement: Copyright Act ss 38 (works) and 103 (SMOTW).

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Parallel importing of copyright material 4.66 The indirect infringement provisions have traditionally applied to parallel importation cases. Parallel importing occurs where an article (embodying copyright material) is lawfully made and purchased overseas, but is then brought into Australia without licence, express or implied, from the Australian rights holder. This is sometimes referred to as grey marketing to distinguish it from black-market dealings (that is, dealings in counterfeit goods). Normally the courts will not infer a licence in cases of parallel importing.

4.66C

Interstate Parcel Express Co Pty Ltd v Time-Life International (1977) 138 CLR 534; 15 ALR 353; 1B IPR 253 Facts: The copyright owner in certain cookbooks appointed Time-Life as the exclusive licensee for Australia. Another firm purchased the books in the United States and imported them into Australia, where they went on the market at half the price charged by Time-Life. Time-Life claimed that this was contrary to s 37 of the Copyright Act. The importer argued in its defence that, as it had purchased the books lawfully in the United States, it had an implied licence to import and sell the books anywhere in the world. Decision: The High Court decided that there was no implied licence to import the books into Australia for the purpose of dealing with them in a commercial way. The mere fact that the 144 (1996) 136 ALR 327; 34 IPR 11.

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The Time-Life case was applied to prevent parallel importing of computer software in Computermate Products (Australia) Pty Ltd v Ozi-Soft Pty Ltd.145 The prohibition on parallel importing was controversial. The Time-Life case showed that exclusive licences could be used by multinational producers to inflate prices and control release dates. In both cases the consuming public suffers. As a result, the Copyright Act was amended. It is not an infringement of copyright to import or deal in: • non-infringing books: Copyright Act s 44A; • non-infringing sound recordings: Copyright Act ss 112D and 44D; • non-infringing computer programs: Copyright Act s 44E; and • non-infringing ‘electronic literary or music items’; that is, a book, or a periodical publication, or sheet music in electronic form: Copyright Act s 44F.146 Films, however, remain protected against parallel importing. The price difference between the Australian market compared to the United States and the United Kingdom for hardware and software (including games, e-books, music, and films) was the subject of an inquiry into IT pricing.147 Over 130 written submissions were received. When releasing the results of the inquiry, the chair said, ‘The committee found that big IT companies and copyright holders charge Australians, on average, an extra 50 per cent.’148

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Parallel importing — accessories to imported articles 4.67 Copyright in such things as labels, packaging, and instruction manuals has been used in the past to prevent goods from being imported into Australia. For example, in Bailey & Co Ltd v Bocaccio Pty Ltd,149 copyright in the Bailey’s Irish Cream label (an artistic work) was used to prevent importing of Bailey’s Irish Cream, even though the product itself was not protected by any intellectual property. Similarly, in Pioneer Electronics Australia Pty Ltd v Lee,150 copyright in

145 (1988) 83 ALR 492; 12 IPR 487. 146 A non-infringing book is one made lawfully in a country that is specified in the Copyright Regulations: Copyright Act 1968 s 10. This covers most developed states. A non-infringing sound recording, computer program, or ‘electronic literary or music item’ is one made lawfully in a qualifying country: Copyright Act 1968 ss 10AA–10AC. A qualifying country is a country that is a party to the Berne Convention or is a member of the World Trade Organization (and complies with the TRIPS provisions on copyright protection). 147 See House of Representatives Standing Committee on Infrastructure and Communications, Inquiry into IT Pricing: At What Cost? IT Pricing and the Australia Tax, Canberra, 2013. 148 House of Representatives Standing Committee on Infrastructure, Media Release, 29 July 2013. 149 (1986) 6 IPR 279. 150 (2000) 51 IPR 291; [2000] FCA 1926.

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trade marks and instruction manuals was used to prevent parallel importation of Pioneer DVD players. Sections 44C and 112C of the Copyright Act now provide that the importation of accessories (in which copyright subsists) is not prohibited by ss 37–38 or ss 101–103, provided the accessory is a non-infringing accessory. This raises two questions. First, what is an accessory? Second, what is a non-infringing accessory? An accessory is defined broadly under ss 10 and 10AD of the Copyright Act. Under s 10, an accessory includes any label, packaging, or instruction (whether written or contained in a sound recording or a film). This overcomes the problem in such cases as Bailey & Co Ltd v Bocaccio Pty Ltd151 and Pioneer Electronics Australia Pty Ltd v Lee.152 Trade marks, brand names, and logos are labels: Polo/Lauren Company LP v Ziliani Holdings Pty Ltd.153 Under s 10AD of the Copyright Act, an accessory now includes any copyright material (other than a feature film) attached to or embodied in an article that contains a computer program, a sound recording, or an ‘electronic literary or music item’ (that is, a book, or a periodical publication, or sheet music in electronic form). This means that products such as enhanced CDs can now be imported without seeking permission from the Australian copyright holder. To be ‘non-infringing’, the accessory must have been made lawfully in a qualifying country as described above.

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Remedies, Orders and Other Matters 4.68 The following court orders are available as a remedy for a copyright owner in appropriate circumstances: • damages or an account of profits; • injunctions; and • delivery up of infringing materials.

Damages or an account of profits 4.69 A successful plaintiff may claim damages: Copyright Act s 115. Copyright infringement is treated as a tort: WEA International Inc v Hanimex Corp Ltd.154 Therefore, the essential function of damages is to compensate the owner for the loss in value of the copyright caused by the infringement. If the defendant is able to prove that he or she did not know and had no reasonable grounds for suspecting that an infringement of copyright was occurring, the court may refuse to award damages: s 115(3); although an account of profits would still be available. 151 (1986) 6 IPR 279. 152 (2000) 51 IPR 291; [2000] FCA 1926. 153 (2008) 75 IPR 143; [2008] FCA 49. 154 (1987) 17 FCR 274; 77 ALR 456; 10 IPR 349.

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It is difficult to establish this defence, particularly if a copyright notice is attached to the work: Kalamazoo (Australia) Pty Ltd v Compact Business Systems Pty Ltd.155 To establish the defence, the defendant has to prove that he or she has undertaken reasonable enquiries as to whether copyright exists. Additional damages may be available for flagrant infringement: Copyright Act s 115(4). These are effectively punitive damages in that they punish wrongdoers rather than compensate the innocent party. In determining whether to award additional damages, the court must have regard to the flagrancy of the infringement, any benefits flowing to the wrongdoer as a result of the infringement, and the conduct of the wrongdoer after becoming aware of the infringement. The courts also consider the issue of deterrence. In Microsoft Corporation v Goodview Electronics Pty Ltd,156 the court awarded Microsoft additional damages of $500,000 for infringement of copyright in its software. In Elwood Clothing Pty Ltd v Cotton On Clothing Pty Ltd157 the defendant was ordered to pay $150,000 in additional damages because the infringement was flagrant, the infringement continued after the plaintiff had warned the defendant, and there was a need to deter the defendant whose business plan involved deliberately copying successful clothing ranges. FNH Investments Pty Ltd v Sullivan (2003) 59 IPR 121; [2003] FCAFC 246 Facts: Sullivan, a photographer, was commissioned by FNH Investments to take photographs of FNH’s resort. The contract provided that FNH would be entitled to use the photographs once Sullivan’s account was paid. FNH complained about the quality of the photographs and aggressively refused to pay. Despite this, FNH used the photos in its promotional material, in a magazine article about the resort, and even converted the photos to digital images for use on its website. Sullivan sued and sought additional damages. The court decided in favour of Sullivan. FNH appealed.

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Decision: The Full Court dismissed the appeal. FNH was ordered to pay the plaintiff’s account of $7,425 plus additional damages of $15,000.

Conversion damages are available: Copyright Act s 116. A conversion is a tort and occurs where one party, without authority, deals with the property of another person in a way that is inconsistent with the owner’s ownership. For example, it is conversion to sell another’s property without his or her permission. The damages are the sale price of the property sold. No deduction is made for the wrongdoer’s costs. This makes conversion a worthwhile remedy. The Copyright Act treats infringing copies as if they were the property of the copyright owner. For example, if someone illegally makes prints of an artist’s work, the prints so made are regarded as the property of the artist. Therefore, 155 (1985) 5 IPR 213. 156 (2000) 49 IPR 578; [2000] FCA 1852. 157 [2008] FCAFC 197, see 4.44C.

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selling the prints amounts to an act of conversion, entitling the artist to seek conversion damages. The damages would be the amount for which the prints were sold. Although the copyright owner can seek damages for infringement and damages for conversion, the court will not make an award that effectively gives the copyright owner two lots of damages. The copyright owner may elect to have an account of profits instead of damages. The owner cannot have both damages and an account of profits: Facton Ltd v Rifai Fashions Pty Ltd.158 The difficulty with electing an account of profits is assessing the defendant’s profits.

Other remedial powers, including interlocutory orders 4.70 The court may grant interim injunctions, Mareva injunctions, and make Anton Piller orders.159 Permanent injunctions may be ordered in appropriate circumstances. An injunction is a discretionary remedy and the courts will refuse to grant one if the plaintiff has acquiesced in the defendant’s conduct. Because the infringing copies are regarded as the property of the copyright owner, that person may seek an order for the copies to be delivered up by the defendant: Copyright Act s 116. This will normally only be made along with an injunction where it is necessary to make the injunction effective.

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Injunctions against online sites providing access to overseas online copyright infringing locations 4.71 As a result of cases such as Roadshow Films Pty Ltd v iiNet Ltd discussed above at 4.63C, the Copyright Act was amended to introduce a new ‘blocking injunctions’ remedy: s 115A. This is the result of the government’s efforts to deal with online infringement and potential liability of online intermediaries such as ISPs, for authorising infringement. The remedy is designed to deal only with overseas piracy websites. Under s 115A, a copyright owner can make an application to the Federal Court for an injunction requiring a Carriage Service Provider (as defined under the Telecommunications Act 1997 — in effect an ISP or telco) to block or disable access to an online location outside Australia that has the primary purpose or primary effect of infringing copyright or facilitating the infringement of copyright (whether or not in Australia). There have been a number of online location blocking orders made under s 115A, with most applications made by record or film companies to stop infringing offshore websites. For example in 2017 the Federal Court made an order under s 115A requiring TPG Internet to block the popular piracy website, Kickass Torrents, which was facilitating infringement of Universal Music’s copyright in 158 (2012) 287 ALR 199; 95 IPR 95; [2012] FCAFC 9. 159 See Anton Piller KG v Manufacturing Processes Ltd [1976] Ch 55; [1976] 1 All ER 779.

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its sound recordings.160 Section 115A was subsequently amended161 so that it now also applies to online search engine providers (rather than just carriage service providers) and this extends the scope of the remedy for copyright owners.

Criminal penalties and seizure powers 4.72 There are criminal penalties for a number of acts, including selling, making, hiring, exhibiting, or importing an article, which infringe copyright: Copyright Act Pt V Div V. Sanctions can include imprisonment: see Ly v The Queen.162 Customs has the power to seize infringing material: Copyright Act s 135(7).

Making unjustified threats 4.73 Care must be taken when threatening another with an action for infringement of copyright. If the threats are not justified, the person threatened may claim damages: Copyright Act s 202. This provides a deterrent against unjustifiable intimidation which might have the effect of preventing competition or discouraging the use of skills.

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Circumvention devices 4.74 To protect their work against piracy, copyright owners of computer program software products often build electronic locks or other protection devices into their products. For example, Sony protects its Playstation software through the use of access codes. Pirates, however, are forever trying to overcome these protection measures. Copyright owners have an action against any person who makes, sells, or uses a device whose purpose is to overcome locks or protection measures that copyright owners build into their products to prevent unauthorised copying: Copyright Act Pt V Div 2A Subdiv A. Copyright owners also often attach electronic rights management information to their products. Copyright owners have an action against anyone who removes or alters such information and against anyone who imports or distributes products from which such information has been removed: Copyright Act Pt V Div 2A Subdiv B.

International Aspects of Copyright 4.75 There is no international copyright. Copyright is protected by national laws of each state. Those laws, however, are quite similar. No formalities are required. 160 Universal Music Australia Pty Ltd V TPG Internet Pty Ltd (2017) 348 ALR 493; 126 IPR 219; [2017] FCA 435. 161 Copyright Amendment (Online infringement) Act 2018. 162 (2014) 315 ALR 398; [2014] FCAFC 175, see 7.59C.

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States apply the doctrine of national treatment to foreign copyright. This means that states treat foreign copyright in the same manner as they treat copyright belonging to locals. By virtue of reg 4 of the Copyright (International Protection) Regulations as amended, the provisions of the Copyright Act apply to works first published in other countries, in like manner as those provisions apply in relation to works first published in Australia and to Australian residents. Australia is a signatory to a number of international treaties or conventions dealing with copyright, including the Berne Convention,163 the TRIPS Agreement — an intellectual property agreement that is an annexure to the treaty establishing the World Trade Organization164 — and the US-Australia Free Trade Agreement.165

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Marketing Advice 4.76 Copyright issues are now quite common in business. • There is no need to mark ‘copyright’ on files or other material, but this is good practice and acts as a warning to those who may not know much about copyright law. • Copyright is critical to the music, book, film, computer, advertising, and retail entertainment industries and important for every business that has an online presence. • Copyright cannot be relied on to protect industrial designs. Designers should consider whether to register their designs under the Designs Act. • Copyright ownership and licensing issues often arise when work is outsourced. It is cheaper and more efficient to consider such issues at the outset rather than leave them to be determined by a court at a later date. • Businesses must be careful to avoid not only direct infringement of copyright, but also indirect infringement, such as authorising copyright infringement, and importing or dealing in infringing copies.

163 The Berne Convention for the Protection of Literary and Artistic Works was formed in 1886 and since then has been revised or added to on numerous occasions. The latest extension to which Australia is a signatory is 1971 (Paris). 164 Signed in Marrakesh, Morocco, on 15 April 1994. 165 US Free Trade Agreement Implementation Act 2004 (Cth).

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Protecting Commercial Designs

5

Introduction to the Designs Act ....................................................... 5.2 Purpose of the Designs Act ............................................................... 5.3 Designs Act in Practice ...................................................................... 5.4 The Nature of a Design ..................................................................... 5.5 Definition of a design ..................................................................... 5.5 Definition of a product .................................................................. 5.6 Distinction between the design and the product ...................... 5.7 Distinction between visual feature and function ...................... 5.8 Component and spare parts .......................................................... 5.9 When is a Design Registrable? ......................................................... 5.10 When is a design new? ................................................... 5.11 When is a design distinctive? ....................................................... 5.12 What is included in the prior art base? .................................... 5.13 A. When has a design been publicly used in Australia? ............................................................................... 5.14 B. When has a design been published within or outside Australia? ................................................................. 5.15 C. Publications and uses that do not destroy novelty or distinctiveness..................................................... 5.16 What is the priority date? ............................................................. 5.17 Design Rights ...................................................................................... 5.18 Registering a Design .......................................................................... 5.19 How long does registration last? ................................................. 5.19 Who may register a design? ............................................................. 5.20 The registration process ........................................................... 5.21 The examination process ............................................................... 5.22 Infringement of Designs ...................................................................... 5.23 187

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Identical or substantially similar in overall impression ........... 5.24 Defences ......................................................................................... 5.25 Remedies for Infringement .............................................................. 5.26 Court orders ................................................................................... 5.26 Making unjustified threats ........................................................... 5.27 Offences .......................................................................................... 5.28 Why Register? Industrial Designs and Other Laws ...................... 5.29 Industrial designs and the Copyright Act .................................. 5.30 Industrial designs and the Patents Act ................................ 5.31 Industrial designs and passing off ............................................... 5.32 Review of the Design System .......................................................... 5.33 International Aspects of Designs Law ............................................ 5.34 Circuit Layout Rights ........................................................................ 5.35 Marketing Advice ............................................................................... 5.36

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5.1 The way a product looks can be an important element of marketing. A distinctive appearance can give a product an edge in the marketplace. The law provides some protection to this aspect of marketing. This chapter examines the law relating to industrial designs, in particular the Designs Act 2003 (Cth).

Introduction to the Designs Act 5.2 Some protection for designs may be obtained from copyright law, or from passing off, or from the law relating to misleading or deceptive conduct. These are discussed later in the chapter. In the main, however, protection for industrial designs is governed by the Designs Act. The Designs Act provides a system of registration for new and distinctive designs. Certain designs cannot be registered under the Designs Act, the main one being circuit layouts. The Circuit Layouts Act 1989 (Cth) provides protection for original layout designs for integrated circuits and computer chips. This Act is discussed briefly at 5.35.

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Purpose of the Designs Act 5.3 The purpose of the Designs Act is to protect the look by which a product is presented for sale. It is not intended to protect the product’s function, its feel, its uses, or the way in which it is constructed. Perhaps the most common misconception made about the Designs Act is the belief that it protects functional innovations. The misconception arises because some designers seem to confuse function and appearance. A good example is Firmagroup Australia Pty Ltd v Byrne & Davidson Doors.1 Firmagroup Australia Pty Ltd v Byrne & Davidson Doors (1987) 180 CLR 483 Facts: Firmagroup Australia Pty Ltd was the owner of a registered design for a ‘combination handle and lock for shutter doors’. The product was innovative in that it used a plate which included a keyhole and recessed door handle. Firmagroup sued Byrne & Davidson for infringing its design. The registered design and the allegedly infringing design are depicted below.

1

Defendant’s design

Plaintiff’s design

(1987) 180 CLR 483, see 5.3C.

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Marketing and the Law Decision: The High Court refused to interpret the design monopoly so as to protect the concept of a rectangular plate with keyhole and recessed handle: ‘The idea of shape or configuration conveyed by those features is altogether too general to attract statutory protection’. The court limited the monopoly to the specific, individual appearance of the Firmagroup combination lock and recessed handle. Firmagroup was thus unable to stop competitors from producing a similar product using a recessed handle and lock. The defendant had sufficiently distinguished its product. Consequently, there was no breach.

This distinction between a ‘design innovation’ and a ‘functional innovation’ is critical to an understanding of the Designs Act. Although the Firmagroup case was decided under the old Designs Act, there is no reason to believe that the outcome would necessarily be different under the new Act. Functional innovations are protected under the Patents Act 1990 (Cth). Function is irrelevant to the scope of the Designs Act. Of course, an innovative product design may also have innovative functional characteristics. It may therefore be necessary to consider registration under both the Designs Act and the Patents Act. The justification for providing this state-guaranteed monopoly is that it encourages innovation in design. However, there are those who argue that a design monopoly is not justified on economic or other grounds and that, in fact, the Designs Act may even stifle innovation at the same time as stifling competition. Protection under the Designs Act depends on registration. Provided the design is properly registered, the registered owner gets a maximum 10-year monopoly on the use of that design in relation to the product in respect of which it is registered.

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Designs Act in Practice 5.4 Industry does not make as widespread use of the Designs Act as it does of the Patents Act or the Trade Marks Act 1995. For example, in 2015, compared with applications to register designs, about four times as many patents applications were made and approximately 10 times as many applications to register trade marks.2 Whilst there has been an increased number of design applications in recent years, applications from non-residents account for most of this increase.3 Australia, together with other English-speaking countries, has traditionally treated designs as being of less importance than continental Europe and Japan do.4

2

Productivity Commission, Intellectual Property Arrangements, Inquiry Report, No 78, 23 September 2016, p 339, available at . 3 Productivity Commission, Intellectual Property Arrangements, Inquiry Report, above n 2, at p 339. 4 See generally Bureau of Industry Economics, The Economics of Intellectual Property Rights for Design, Occasional Paper 27, AGPS, 1995.

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The Nature of a Design Definition of a design 5.5 Under the Designs Act, a reference to a ‘design’ is always a design used in relation to a product: Designs Act s 8. A design of a product means the overall appearance of the product resulting from one or more visual features of the product: Designs Act s 5. Visual features include the shape, configuration, pattern, or ornamentation of the product: Designs Act s 7(1). Therefore, a design may be three-dimensional (as, for example, the shape or configuration of a coffee pot), or two-dimensional (such as the pattern or ornamentation on a curtain or a carpet). A product may have both a new shape plus a new pattern embodied in it. It is not possible for a designer to register a shape or pattern per se. For example, a designer who created a new pattern to be applied to curtains and wallpaper would have to register the design in respect of both products. A visual feature may, but need not, serve a functional purpose: Designs Act s 7(2). However, the visual features do not include the feel of the product or the materials used in the product: Designs Act s 7(3). In the case of a product that has one or more indefinite dimensions, the visual features do not include the indefinite dimension: Designs Act s 7(3).

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Definition of a product 5.6 A ‘product’ is a thing that is manufactured or hand made: Designs Act s 6(1). A component part of a product may be a product for the purposes of the Designs Act, if it is made separately from the product: Designs Act s 6(2); otherwise it is not a product in respect of which a design may be registered. A problem that arose under the old law was the issue of products produced in indefinite lengths. For example, items such as door frames, glazing jambs, guttering, and insulating panels vary in length and perhaps width according to the particular job in hand. Section 6(3) of the Designs Act provides that these items are products (and therefore capable of embodying a registrable design) if any one or more of the following applies to the thing: (a) a cross-section taken across any indefinite dimension is fixed or varies according to a regular pattern; (b) all the dimensions remain in proportion; (c) the cross-sectional shape remains the same throughout, whether or not the dimensions of that shape vary according to a ratio or series of ratios; (d) it has a pattern or ornamentation that repeats itself.

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Section 6(4) of the Designs Act provides that a kit which, when assembled, is a particular product, is taken to be that product.

Distinction between the design and the product 5.7 A fundamental aspect of designs law is the distinction between the product and the design (whether three-dimensional or two-dimensional) that is applied to it.5 If a manufacturer creates a new type of coffee pot, the Designs Act will only protect the particular shape of the coffee pot, not the idea of a coffee pot itself. If a product has only one possible shape it will not be possible to register a design in relation to that product, as that would be equivalent to granting a monopoly over the product itself. The Designs Act will not grant monopolies for the fundamental or essential form of a product. Of course, determining the fundamental or essential form of a product will often be a difficult question. For example, what is the fundamental form of an evaporative air conditioner? The following case was decided under the old Act of 1906, but is nevertheless relevant to the new law. Fortunately, this is likely to be a rare occurrence, as most articles will have more than one possible shape.6 Dalgety Australia Operations Ltd v FF Seeley Nominees Pty Ltd (1985) 68 ALR 458; 5 IPR 97

5.7C

Facts: Dalgety designed a slim upright air conditioner and registered the design pursuant to the Designs Act. Prior to this, air conditioners had had a thick or ‘chunky’ appearance. Dalgety sued Seeley for infringement of design. Seeley countered that the Dalgety design was not registrable.

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Decision: The court made it clear that the Designs Act cannot be used to obtain a monopoly in an article, stating that: It is essential to remember that the Act gives a monopoly in design and not to the trading of the article to which it is applied. Without the design the article would still have its own character. That is to say, without a design a chair would still be a chair, a fork would still be a fork, a table would still be a table. The idea in the design will operate on the article. The design will appeal to the eye giving that article its own peculiar appearance to the eye. The design turns a chair into something more than a mere chair. It becomes a chair with a conception or suggestion about shape or configuration beyond the fundamental form of a chair. If something said to be a design does not by appeal to the eye take the article beyond the fundamental form of the class of article under consideration it is not a registrable design. The fundamental form of any class of article will be something of the most rudimentary kind. The fundamental form of air conditioners, before the Dalgety product, was of a ‘thick’ box or

5

Re Wolanski’s Registered Design (1953) 88 CLR 278; Malleys Ltd v JW Tomlin Pty Ltd (1961) 35 ALJR 352; 1A IPR 559. 6 See Stenor Ltd v Whitesides (Clitheroe) Ltd [1948] AC 107; [1947] 2 All ER 241; (1947) 65 RPC 1, in which a fuse was held to have only one shape and was, therefore, unregistrable.

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Chapter 5: Protecting Commercial Designs cabinet on a stand. The thinness of the Dalgety air conditioner went beyond this fundamental form and was registrable. The decision was upheld on appeal.7

Distinction between visual feature and function 5.8 As previously mentioned, the Designs Act is not concerned with function. Thus, if the creative element in the hypothetical coffee pot is the way it works (its function), the manufacturer should register under the Patents Act. If, however, the innovation is both a visual feature and functional, there is nothing to stop the design being registered: Designs Act s 7(3). British Franco Electric Pty Ltd v Dowling Plastics Pty Ltd [1981] NSWLR 448 Facts: Dowling Plastics and British Franco Electric entered into a joint venture to manufacture and market furniture castors. The castor had been developed by Dowling Plastics, but registered under the Designs Act by British Franco Electric. After the joint venture broke up, Dowling Plastics started to produce the castors itself. British Franco sought an injunction for breach of registered design. Dowling Plastics cross-claimed for rectification of the register or cancellation of the registration. One of the grounds argued by Dowling was that the design should not have been registered because the only novel feature of the castor was dictated purely by function and indeed would not be seen when the castor was assembled and put on to furniture.

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Decision: The Designs Act is not concerned with function. The fact that the shape of an article is largely dictated by function is irrelevant in determining whether the design should be registered. The castor design was therefore capable of being registered. However, the registration was cancelled because the design did not satisfy other requirements for registration.

Therefore, if the shape of an article is intrinsic to its operation, some protection can be gained under the Designs Act for what is really a functional element, provided the shape is not the only shape that can be applied to the article and provided that the visual shape feature is new and distinctive.

Component and spare parts 5.9 The replacement parts market (the after-market) can be very lucrative for a manufacturer because of the captive nature of the audience. If the manufacturer can obtain a monopoly via the Designs Act (or, even better, under the Copyright Act 1968), then the market becomes very lucrative indeed. The old Designs Act was not clear as to whether spare parts and components could be registered separately from the entire product. 7 See Dalgety Australia Operations Ltd v FF Seeley Nominees Pty Ltd (1986) 64 ALR 421; 6 IPR 361.

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The new Designs Act clarifies the situation somewhat. Section 7(2) of the Designs Act 2003 provides that a component part of a product may be a product for the purposes of the Designs Act, if it is made separately from the product. Thus, the component parts of many manufactured items would qualify as ‘products’ under the Designs Act because they are manufactured separately. Certainly all parts for which replacements are manufactured would qualify as products. The issue then is whether the shape given to the component is the fundamental shape for that product. As we have seen, a shape cannot be registered if it is the fundamental form or shape of a product. Although the shape of component parts is partly dictated by the function (the need to fit other parts), normally the designer of the part would have had a number of potential shapes from which to choose. In that case, the particular shape chosen will not be the fundamental form of the product and therefore if the shape is new and distinctive, the design is registrable. Therefore the shape of spare parts will normally be protected under the Designs Act. For this reason, the Act contains a specific defence relating to the manufacture of genuine spare parts. This is discussed at 5.25.

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When is a Design Registrable? 5.10 Section 15 of the Designs Act provides that a design is a registrable design if the design is new and distinctive when compared to the prior art base for the design as it existed before the priority date of the design. This raises the following issues: • When is a design new? • When is a design distinctive? • What is included in the prior art base? • What is the priority date? • Does the Designs Act provide any grace period?

When is a design new? 5.11 Section 16(1) of the Designs Act provides that a design is new unless it is identical to a design that forms part of the prior art base for the design. Therefore, the Designs Act starts with the assumption that the design is new. However, this will be defeated if there is evidence that it is identical to a design forming part of the prior art base.

When is a design distinctive? 5.12 Section 16(1) of the Designs Act provides that a design is distinctive unless it is substantially similar in overall impression to a design that forms part of the 194

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prior art base for the design. Section 19 contains a list of instructions to be used in determining whether a design is substantially similar in overall impression to another design: see World of Technologies (Aust) Pty Ltd v Tempo (Aust) Pty Ltd.8 Although distinctiveness is judged on the design as a whole, the applicant for design registration (the design owner) may include a statement of newness and distinctiveness, the purpose of which is to direct attention to those particular elements of the design which the owner claims are new and distinctive. Section 19 of the Designs Act provides that: (1) If a person is required by this Act to decide whether a design is substantially similar in overall impression to another design, the person making the decision is to give more weight to similarities between the designs than to differences between them. (2) The person must also: (a) have regard to the state of development of the prior art base for the design; and (b) if the design application in which the design was disclosed included a statement (a statement of newness and distinctiveness) identifying particular visual features of the design as new and distinctive: (i) have particular regard to those features; and (ii) if those features relate to only part of the design — have particular regard to that part of the design, but in the context of the design as a whole; and (c) if only part of the design is substantially similar to another design, have regard to the amount, quality and importance of that part in the context of the design as a whole; and (d) have regard to the freedom of the creator of the design to innovate. Copyright © 2019. LexisNexis Butterworths. All rights reserved.

(3) If the design application in which the design was disclosed did not include a statement of newness and distinctiveness in respect of particular visual features of the design, the person must have regard to the appearance of the design as a whole. (4) In applying subsections (1), (2) and (3), the person must apply the standard of a person who is familiar with the product to which the design relates, or products similar to the product to which the design relates (the standard of the informed user). (5) In this section, a reference to a person includes a reference to a court.

One of the criticisms made of the old Designs Act was that, while it was relatively easy to get a design registered, it was very difficult to convince a court that the

8

(2007) 71 IPR 307; [2007] FCA 114, see 5.15C.

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registered design had been infringed. Supposedly, this was due to the old law’s concentration on looking for the differences between designs. The new Act sets out to correct that situation. The emphasis moved from concentrating on differences, to concentrating on similarities: Designs Act s 19(1). This applies to both registration and infringement.9 In this way, while it will be more difficult to register a design, it should become easier to prove an infringement. Distinctiveness is to be judged from the perspective of the informed user: Designs Act s 19(4). Commenting on an informed user in a case involving a designer dress, Kenny J, in Review 2 Pty Ltd v Redberry Enterprise Pty Ltd,10 said: In summary, the standard of the informed user is an objective one. In this case, the assessment must be that of a user of ladies’ garments, which would include a potential purchaser, either in retail sales (such as a buyer for a fashion store) or at the ultimate consumer level. A designer or manufacturer of ladies’ garments is not, on account of design or manufacturing knowledge alone, an informed user. The notional user must be informed, in the sense that the user is familiar with ladies’ garments. The informed user is not an expert, but must be more than barely informed. The focus for consideration is on eye appeal and not on internal or less visible manufacturing features.

What is included in the prior art base?

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5.13 Section 15(2) of the Designs Act provides that the prior art base for a design (the designated design) consists of: (a) designs publicly used in Australia; and (b) designs published in a document within or outside Australia; and (c) designs in relation to which each of the following criteria is satisfied: (i) the design is disclosed in a design application; (ii) the design has an earlier priority date than the designated design; (iii) the first time documents disclosing the design are made available for public inspection under section 60 is on or after the priority date of the designated design.

A. When has a design been publicly used in Australia? 5.14 The prior art base includes designs publicly used in Australia. A design has been used if it has been exposed to public view. However, secret use is not counted. Thus, if disclosure of the design is made in circumstances where the recipient is under an obligation to keep the design secret, then registrability will not be lost.

9 For a discussion on infringement see 5.23. 10 (2008) 79 IPR 214; [2008] FCA 1588.

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Designers should give consideration to requiring express acknowledgements of confidentiality. In the case of employees and others with whom the designer has a contract, the acknowledgement ought to be part of the written contract. If the designer relies upon an implied obligation of confidence, it will be necessary to show that the designer has taken reasonable steps to keep the design secret. It is not necessary that the design be exposed to the entire public to be publicly used. Showing the prototype of a bicycle helmet to a small number of retailers without imposing any obligation of confidence upon the retailers could very well mean that the design has been used.11 Selling a product to which the design has been applied would amount to public use,12 as would displaying or offering the product for sale. Any public use of the design after the priority date (usually the date of filing the application) will not affect the newness or distinctiveness of a design.

B. When has a design been published within or outside Australia? 5.15 The prior art base includes designs published in a document within or outside Australia. This means that the design has been published if it has been displayed with reasonable clarity in a publication available to the public within or outside Australia. This would include magazines, advertisements, and catalogues. It would also include publication on a website accessible to the public. World of Technologies (Aust) Pty Ltd v Tempo (Aust) Pty Ltd (2007) 71 IPR 307; [2007] FCA 114

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Facts: World of Technologies (WoT) is an importer and wholesaler of household goods and electrical appliances, including vacuum cleaners. In 2005 it imported a bagless vacuum cleaner manufactured in China by Suzhou Fak Electric Co (SFE). In April 2005, SFE exhibited a brochure of its vacuum cleaner at an Export Fair held in Guangzhou, China. The brochure contained a front-on photo of the bagless vacuum cleaner. The manager of Tempo, another Australian importer of vacuum cleaners, attended the Fair and liked SFE’s products. He placed an order for a quantity of the bagless vacuum cleaner. He also brought a copy of the brochure to Australia. A copy of the photograph in the brochure was posted to Tempo’s website in May 2005. In May 2005 SFE wrote to WoT giving WoT permission to apply for design registration, although ‘the ownership of the Design and the Copyright are the property of [SFE]’. WoT registered the design in its own name in June 2005. The priority date was 16 June 2005. WoT sued Tempo for breach of registered design (and other claims). Tempo argued that the registration should be revoked, first, because the design was not new and original at the priority date, and second because WoT was not a person entitled to register the design. Decision: A design must be new and distinctive as at the priority date (s 15). The photograph in the brochure and the copy of it on Tempo’s website were published prior to the priority 11 Safe Sport Australia Pty Ltd v Puma Australia Pty Ltd (1985) 4 IPR 120. 12 Re application by Baker & Priem (No 2) (1989) 15 IPR 660; (1989) AIPC 90-599.

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Marketing and the Law date. The photo only showed the vacuum cleaner from the front and, therefore, was not identical to the registered design (s 16). Thus, the registered design was new. However, the photo did convey a clear impression of what the overall design must look like — therefore, it was substantially similar in overall impression to the registered design (s 16). Therefore, the registered design was not distinctive and ought to be struck off the register. Even if the design was registrable, WoT was not entitled to take out that registration (s 13). WoT did not create the design, nor had the design been assigned to it.

The publication does not have to be available for sale to the public, provided it is available for inspection. In J Rapee & Co v Kas Cushions,13 a cushion design which appeared in an IKEA store catalogue was held to constitute prior publication (for the purposes of the old Designs Act) because the catalogue, while not distributed among the public, was available for inspection by customers and had, in fact, been shown to customers. If the publication is publicly available, it is not necessary that any member of the public has actually looked at it: J Rapee & Co v Kas Cushions.14 A patent application might constitute prior publication. Therefore, to avoid difficulties, if patent protection is sought it is better to lodge simultaneous design and patent applications. Generally it will be necessary for there to have been a pictorial representation of the design, although it is possible to refer to written directions explaining the pictorial representation.15 Any publication of the design after the priority date (usually the date of filing the application) will not affect newness or distinctiveness of a design.

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C. Publications and uses that do not destroy novelty or distinctiveness 5.16 Section 17 of the Designs Act gives the designer a grace period within which the design may still be registered, even though it has been published or used in limited specified circumstances. Where a design is published or used at an official exhibition prior to the priority date with the consent of the owner, the design may still be registered provided that application for registration is made within six months of the exhibition: Designs Act s 17(1)(a) and Designs Regulations 2004 reg 2.01. Where a design is published or used prior to the priority date without the consent of the owner by a person who derived or obtained the design from the owner, the design may still be registered provided that application for registration is made within six months: Designs Act s 17(1)(b) and Designs Regulations 2004 reg 2.01. 13 (1989) 90 ALR 288; 15 IPR 577. 14 (1989) 90 ALR 288; 15 IPR 577. 15 Rosedale Associated Manufacturers Ltd v Airfix Products Ltd [1957] RPC 239 at 244.

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Chapter 5: Protecting Commercial Designs

For example, assume X is a designer who was hired by Y to produce a design for a ladder. The contract clearly stated that all rights belonged to Y. Prior to Y lodging an application for registration under the Designs Act, X used the design to produce a prototype for himself, which he then showed to a number of persons within the trade. The use and publication made by X was prior to the design application. Normally this would make it part of the prior art base, with the result that Y’s design would not be new and distinctive. However, as X obtained the design from Y and as Y had not consented to X’s use or publication, X’s use or publication did not destroy the design’s registrability. Section 18 of the Designs Act also provides for some further uses of a design that will not destroy the novelty or distinctiveness of a design, allowing the designer to achieve design registration despite previous use and or publication of the design. Section 18 is concerned with a design that is also an artistic work protected by the Copyright Act. When a person seeks to register a design that is also an artistic work under s 10 of the Copyright Act, in determining whether the design is new and distinctive, all prior uses of the artistic work (made with the consent of the copyright owner) are to be ignored, except where the prior use ‘consisted of, or included, the sale, letting for hire or exposing for sale or hire of products to which the design had been applied industrially’: Designs Act s 18. When has a design been industrially applied? If 50 or more products carrying the design are produced, then the design has been industrially applied: Copyright Regulations 2017 reg 12(1)(a). However, a design may have been industrially applied even where fewer than 50 products have been produced, if the circumstances are appropriate. For example, in Press-Form Pty Ltd v Hendersons Ltd,16 Hendersons used a new design for a bus seat in manufacturing 41 bus seats as prototypes. This was held to be an industrial application of the design. An example demonstrates the scope of this section. A is the creator and copyright owner of a drawing of a cartoon character. The cartoon has appeared in the newspaper for a number of years. A decides to apply the drawings of the cartoon character to T-shirts. The drawings have not been used on T-shirts previously, except by A for the purpose of preparing a prototype. A seeks to register the design (the cartoon character) in respect of a product (T-shirts) under the Designs Act. To be registered under the Designs Act in respect of T-shirts, the design must be new and distinctive: Designs Act s 15. As the design is an artistic work, any use of the design (eg, in the cartoon strips) is to be ignored in determining whether the design is new and distinctive. Although the design has been applied to a T-shirt prior to the design application being made (the priority date), this was solely for the purposes of producing a prototype. This would not amount to industrial application within the meaning of s 18(2) of the Designs Act and therefore must be

16 (1993) 112 ALR 671; 26 IPR 113.

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ignored in determining newness and distinctiveness. Therefore, the design ought to be registrable.

What is the priority date? 5.17 The priority date of a design is generally the filing date of the design application. An earlier priority date will apply where an application to register the design has previously been made overseas in a country which is a Convention country and the Australian application is made within six months of the application date in the Convention country: Designs Act s 27(1)(b) and Designs Regulations 2004 reg 3.06(2). The list of Convention countries is quite extensive. As in patents law, the priority date is important in determining newness and distinctiveness. Designers must be careful not to destroy their chance of registration by prematurely publishing or using the design prior to lodging an application for registration. Even if a design is registered, it may still be challenged on the basis that it was not new and distinctive at the priority date. There have been a number of successful applications to have designs removed from the register. This is one factor that the owner of a registered design must take into account in deciding whether to commence infringement proceedings.

Design Rights

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5.18 Section 10 of the Designs Act provides that the registered owner of a registered design has the exclusive right, during the term of the registration: (a) to make or offer to make a product, in relation to which the design is registered, which embodies the design; and (b) to import such a product into Australia for sale, or for use for the purposes of any trade or business; and (c) to sell, hire or otherwise dispose of, or offer to sell, hire or otherwise dispose of, such a product; and (d) to use such a product in any way for the purposes of any trade or business; and (e) to keep such a product for the purpose of doing any of the things mentioned in paragraph (c) or (d); and (f) to authorise another person to do any of the things mentioned in paragraph (a), (b), (c), (d) or (e).

Being a monopoly, the owner is protected not only against copying, but also against independent creation. The right created by design registration is personal property and can be assigned or licensed: Designs Act s 10(2) and (3). An assignment should be in writing signed by, or on behalf of, the assignor and the assignee.

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Registering a Design How long does registration last? 5.19 A design is initially registered for five years, but may be renewed on application for a further five years. It is up to the registered owner to ensure that renewals are applied for.

Who may register a design?

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5.20 Section 13 of the Designs Act provides that persons entitled to be registered as the owner of a registered design include: • the designer; • where the designer was an employee, the employer of the designer, provided the design was created in the course of employment; • where the designer was under a contract, the person contracting the designer, provided the design was created pursuant to a contract; and • an assignee of the design. Essentially, therefore, the creator of the design is the person entitled to be registered as owner. The creator is the person ‘whose mind conceives the relevant shape, configuration, pattern or ornamentation applicable to the article in question and reduces it to visible form’.17 See World of Technologies (Aust) Pty Ltd v Tempo (Aust) Pty Ltd.18 The creator may assign the rights and, in that case, the person entitled to be registered is the assignee: Designs Act s 13(1)(c). As with other areas of intellectual property, where the design is created in the course of employment, the person entitled to be registered as owner is the employer: Designs Act s 13(1)(b). The design must be created in the course of the employment: Courier Pete Pty Ltd v Metroll Queensland Pty Ltd.19 This is a question of fact. The cases that were discussed under patents law are relevant to this enquiry: see 2.40. Where the designer created the design under a contract with another person, that other person is entitled to be registered unless the contract provides otherwise: Designs Act s 13(1)(b). This situation refers to contracts for services, for example, where the designer (who is an independent contractor) is specially hired to produce a design for a product.

17 Chris Ford Enterprises Pty Ltd v BH & JR Badenhop Pty Ltd (1985) 60 ALR 400; 4 IPR 485; (1985) ATPR 40-568 at 491, applied to the Designs Act in LED Technologies Pty Ltd v Elecspess Pty Ltd (2008) 80 IPR 85; [2008] FCA 1941. 18 (2007) 71 IPR 307; [2007] FCA 114, see 5.15C. 19 (2010) 87 IPR 397; [2010] FCA 735.

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The registration process 5.21 The person entitled to be registered as the owner may file an application in the prescribed form, including a request that the design be registered. Where the owner is part of a corporate group, care should be taken to ensure that the correct entity is named on the application.

5.21C

Foster’s Australia Ltd v Cash’s (Australia) Pty Ltd (2013) 299 ALR 134; 101 IPR 546; [2013] FCA 527 Facts: Foster’s Australia Ltd, a subsidiary of Foster’s Group Ltd, commissioned a third party, Cash’s (Australia) Pty Ltd to create new beer taps and handles. Under the terms of the contract with the designer, Foster’s Australia was to own the relevant intellectual property. Foster’s Group, the holding company of the Foster’s corporate group, filed patent and design applications for the beer taps and handles. When the mistake was discovered, it assigned the registrations to Foster’s Australia. Foster’s Australia sued Cash’s for infringement of the relevant patents and designs. Cash argued that the patents and designs were invalid and should be revoked, on the grounds that the original applications were made by Foster’s Group, a firm not entitled to claim ownership of the intellectual property.

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Decision: The patents and designs were validly registered. The court held that the applications had been made by Foster’s Group as ‘constructive trustee’ for Foster’s Australia. The court declined to revoke the designs registrations because it would result in injustice and substantial prejudice to Foster’s Australia.

Once the registrar is satisfied that the formalities required by reg 4.04 of the Designs Regulations 2004 have been complied with, the registrar must register the design: Designs Act s 39. The formalities include that: • the product or products in relation to which the design is sought to be registered must be identified sufficiently to enable each product to be classified in accordance with the Locarno Agreement (an international system for classifying products for industrial design purposes);20 • a representation of the design must be provided; and • a specimen of the design may be filed in accordance with reg 4.04(1)(e). There are certain designs that may not be registered: Designs Act s 43. For example, the registrar may not register a design used in relation to a product that is an integrated circuit within the meaning of the Circuit Layouts Act: Designs Act s 43(1)(c). For protection of the design of integrated circuits, see the Circuit Layouts Act and 5.35. Once registered, the registrar must issue a certificate of registration and publish a notice stating that the design has been registered. The register is accessible to the public. 20 Locarno Agreement establishing an international classification for industrial designs, signed 1968.

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The examination process

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5.22 There is no formal examination process prior to registration. This means that a design is not formally compared to the prior art base before registration. This is a significant change from the previous Designs Act under which the registrar was required to conduct a formal examination before registration. The reason for dispensing with the automatic examination is to reduce the costs of registration. Only when a registered design is challenged is there likely to be any need for an examination. When a design registration is not challenged, it is largely a waste of resources to conduct an examination. As the registered owner cannot commence infringement proceedings without first having the design examined, it makes sense that the examination should only occur at this point. When requesting an examination, the owner may include in the request any material in relation to the newness and distinctiveness of the design that the owner considers to be relevant. The registrar must examine the design registration to determine whether grounds for revocation exist: Designs Act s 65. The primary ground for revocation is that the registered design was not a registrable design within the meaning of s 15 of the Designs Act: Designs Act s 65(2).21 This means that the registrar must determine whether the design is new and distinctive when compared with the prior art base for the design as it existed before the priority date of the design. Having conducted the examination, the registrar may revoke the registration (Designs Act s 68), amend the registration (Designs Act s 66), or issue a certificate of examination validating the registration (Designs Act s 67). Only after a certificate of examination has been issued by the registrar can the registered owner begin infringement proceedings.

Infringement of Designs 5.23 The test for infringement under s 71(1) of the Designs Act is as follows. A person infringes a registered design if, during the term of registration of the design, and without the licence or authority of the registered owner of the design, the person: (a) makes or offers to make a product, in relation to which the design is registered, which embodies a design that is identical to, or substantially similar in overall impression to, the registered design; or (b) imports such a product into Australia for sale, or for use for the purposes of any trade or business; or

21 A second ground for revocation is that the design should not have been registered because of s 43 (eg, an integrated circuit).

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An infringement under s 71(1)(a) is referred to as a primary infringement. An infringement under any of s 71(1)(b)–(e) is referred to as a secondary infringement. The design monopoly protects the registered owner against parallel importing.22 This potentially places considerable power in the hands of manufacturers who have substantial component and spare parts sales. To overcome this, the Designs Act provides a spare parts defence: see 5.25. Section 71(4) of the Designs Act states that infringement proceedings must be started within six years from the day on which the alleged infringement occurred. This can mean proceedings can still be commenced even after the registered design has expired for infringement that occurred prior to that time: Gram Engineering Pty Ltd v Bluescope Steel Ltd.23

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Identical or substantially similar in overall impression 5.24 Infringement consists of making, importing, using etc a product in relation to which design is registered, that embodies an identical or substantially similar design. The key to infringement is to determine what is meant by the expression ‘identical to or substantially similar in overall impression to the registered design’. Whether two designs are identical is a relatively simple question of fact. This test is applied from the perspective of the ‘informed user’ — someone more informed than the ‘ordinary user’ but not a design expert: LED Technologies Pty Ltd v Roadvision Pty Ltd.24 The difficult cases are those where the court has to determine whether the defendant’s design is substantially similar in overall impression to the registered design. Section 71(3) of the Designs Act provides that, in determining whether an allegedly infringing design is substantially similar in overall impression to the registered design, a court is to consider the factors specified in s 19 of the Designs Act, and in particular to give more weight to the similarities between two designs than the differences, s 19(1): see 5.12. One of the major criticisms levelled at the old Designs Act was that it was difficult to establish an infringement.25 There was a strong perception among designers that copyists only had to make relatively small changes to a registered design to avoid

22 Parallel importing refers to the practice of buying products overseas and then importing them to Australia without obtaining permission from the person who holds the right to deal in those products in Australia. 23 (2013) 106 IPR 1; [2013] FCA 508. 24 (2012) 287 ALR 1; 94 IPR 481. 25 The old Designs Act referred to infringement by an ‘obvious or fraudulent imitation’. Because of difficulties in interpreting these expressions, the new Designs Act deliberately uses quite different language.

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infringement of that registered design. See, for example, Firmagroup Australia Pty Ltd v Byrne & Davidson Doors26 and Koninklijke Philips Electronics NV v Remington Products Australia Pty Ltd.27 The Designs Act 2003 was crafted to change that view. Keller v LED Technologies Pty Ltd (2010) 268 ALR 613; 87 IPR 1; [2010] FCAFC 55 Facts: LED Technologies (LED) is registered under the Designs Act as the owner of two designs relating to combination rear or tail lights used on trucks, buses, caravans, and trailers. The ground-breaking technology was developed in Australia. LED sued a number of firms for distributing imported combination rear or tail lights, known as the Condor range. The Condor products were based on LED’s idea, and manufactured overseas at about 20% less cost than the LED lights. The defendants argued that LED was not the owner — LED produced drawings of the design which were then given to a manufacturer to produce the product; the manufacturer transposed the drawings to a computer program and used that to produce the actual tail light. The defendants also argued that LED’s designs were not new and distinctive and therefore should not have been registered. The case, therefore, raised issues of ownership, validity, and infringement. LED succeeded at trial on all issues. The defendants appealed on the grounds of validity and infringement, but not ownership.

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Decision: The LED designs were validly registered. The defendant’s Condor range of tail lights embodies a design that is substantially similar in overall impression to each of LED’s registered designs. Therefore, they infringe LED’s designs. The court granted injunctions and damages.

In Hunter Pacific International Pty Ltd v Martec Pty Ltd,28 the court considered the alleged infringement of a registered design for a ceiling fan. Applying the s 19 factors to make an assessment of whether the allegedly infringing design was substantially similar in overall impression, Nicholas J recognised a number of obvious differences between the registered design and the allegedly infringing Razor fan produced by Martec, but the overall impression conveyed was one of similarity. In particular, the lower ‘hubs’ of each ceiling fan were similarly proportioned and conveyed a generally sleek and flat appearance. The court took the view that it was this feature which contributed most to the informed user’s assessment of the design given that a ceiling fan hub would be viewed from underneath, looking up. Martec’s Razor ceiling fan was found to infringe Hunter Pacific’s registered design rights. Unlike copyright infringement, which depends on proof of conscious or unconscious copying, there is no need to establish that the registered design was copied. Registration under the Designs Act protects against independent creation. The defendant may have been totally unaware of the registered design. In this

26 (1987) 180 CLR 483, see 5.3C. 27 (2000) 177 ALR 167; 48 IPR 257; [2000] FCA 876. 28 (2016) 121 IPR 1; [2016] FCA 796.

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respect, the protection provided by the Designs Act is a true monopoly, like the protection provided by the Patents Act.

Defences

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5.25 A special defence is provided in the case of repairing complex products: Designs Act s 72. This is known as the spare parts defence. A complex product is a product comprising at least two replaceable component parts, permitting disassembly and re-assembly of the product: Designs Act s 5. Provided the repair is for the purpose of restoring the complex product’s overall appearance (in whole or in part), it is not an infringement to use or authorise another to use a product that embodies a registered design: Designs Act s 72(1). ‘Using’ a product includes making, selling, or importing the product, or using the product for the purposes of any trade or business. ‘Repair’ is defined very broadly to include carrying out maintenance, restoring damage or decay and replacing incidental items as part of this repair process. An example of when this spare parts defence operates is in the car repair industry. If you wish to have the damaged bonnet of your car replaced, for example, the panel beater can use a non-genuine compatible replacement bonnet without being liable for design infringement, notwithstanding that the maker and designer of the car has a separate design registration for the particular shape and configuration of its car bonnet. This defence therefore operates to increase competition in the after-market for spare parts in many industries. The onus is on the plaintiff in infringement proceedings to prove that the defendant knew, or ought reasonably to have known, that the use or authorisation was not for the permitted purpose: Designs Act s 72(2).

Remedies for Infringement Court orders 5.26 The court has the power to make the following orders in appropriate circumstances: • injunctions: Designs Act s 75; • damages, or (at the election of the plaintiff) an account of profits: Designs Act s 75;29 29 In cases of primary infringement, the court may refuse to award damages or an account of profits if the defendant is able to establish that he or she was not aware that the design was registered and had taken all reasonable steps to ascertain whether the design was registered: Designs Act s 75(2)(a). Where goods are marked so as to indicate registration, it is prima facie evidence that the defendant knew the design was registered. In cases of secondary infringement, the court may refuse to award damages or an account of profits if, at the time of the infringement, the defendant was not aware, and could not reasonably have been expected to be aware, that the design was registered: Designs Act s 75(2)(b).

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• additional damages which the court considers appropriate, having regard to the flagrancy of the infringement and all other relevant matters: Designs Act s 75; • revocation of a registration: Designs Act s 93 — the onus of proving that a registration should be revoked is on the party seeking revocation; • rectification of the Register to amend a registration; and • compulsory licences where the court is satisfied that products embodying the designs have not been made in Australia and the registered owner of the design has given no satisfactory reason for failing to exercise or license the exclusive rights in the design: Designs Act s 90.

Making unjustified threats 5.27 Care must be taken when threatening another with an action for infringement of a registered design. If the threats are not justified, the person threatened may claim compensatory damages, and where the circumstances warrant, additional damages: Designs Act s 77. This provides a deterrent against unjustifiable intimidation which might have the effect of preventing competition or discouraging the use of skills.

Offences

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5.28 A person commits an offence if he or she both represents that a design is registered and knows, or is reckless as to whether, the representation is false: Designs Act s 132.

Why Register? Industrial Designs and Other Laws 5.29 There would be little point in registering an industrial design if adequate protection were available under other laws.

Industrial designs and the Copyright Act 5.30 Copyright will not protect an industrial design once the design has been industrially applied and commercially dealt with, unless it is a two-dimensional design (ie, unless it is a design concerned with pattern or ornamentation, not shape or configuration): see 4.53–4.56. Most commercial product designs should

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therefore be registered under the Designs Act: see, for example, Digga Australia Pty Ltd v Norm Engineering Pty Ltd30 and Seafolly Pty Ltd v Fewstone Pty Ltd.31 Even though two-dimensional designs do not lose copyright protection (if any), there are a number of reasons why registration under the Designs Act might still be useful, for instance: • A registered design only has to be new and distinctive in relation to the product in respect of which it is registered. Copyright, on the other hand, will only subsist if the visual appearance is original, no matter what product it is applied to. • Registration of the design may make it easier to assign or license the design, as the buyer may require some documentation of ownership. • The Designs Register is a public document and competitors are thereby warned that the design is already taken. • Registration of a design creates a true monopoly in that it protects not only against copying, but also against independent creation. • In an action for breach of a registered design, it is sufficient for the plaintiff to establish registration and infringement. If the defendant wishes to challenge the registration, it is up to the defendant to prove that the design ought not to have been registered. In an action for breach of copyright, by contrast, the plaintiff must first establish that the work is an original artistic work and that the plaintiff was the creator of the work or otherwise entitled to the copyright.

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Industrial designs and the Patents Act 5.31 Whereas the Designs Act protects the visual features of a product, the Patents Act protects any novel inventive or innovative step contained in the product. The Patents Act can even protect uses of a product, provided the use is part of a novel process. Thus, the Designs Act and the Patents Act target quite different innovations. Nevertheless, there is often a degree of overlap, in the sense that a novel idea may result in both a patentable invention or innovation and a new and distinctive design. As registration under both Acts may be denied where the invention or design is publicly used or disclosed before the date of application for registration, there will be occasions where it is necessary to consider registration under both Acts.

Industrial designs and passing off 5.32 The tort of passing off and s 18 of the Australian Consumer Law32 can provide some protection for the design of a product. However, provided the defendant

30 (2008) 245 ALR 407; 75 IPR 251; [2008] FCAFC 33, see 4.56C. 31 (2014) 313 ALR 41; 106 IPR 85; [2014] FCA 321. 32 Competition and Consumer Act 2010 (Cth) Sch 2.

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takes steps to distinguish its product name and ‘get-up’ from the plaintiff’s so as to avoid misleading the public, generally that will be sufficient to avoid passing off. Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 1; 42 ALR 1; 1A IPR 684; (1982) ATPR 40-307 Facts: Puxu manufactured and sold a distinctive and successful range of lounge furniture called the Contour range. The design of the furniture was not registered pursuant to the Designs Act. Parkdale copied Puxu’s design and called it the Rawhide range. The labels, which were attached to the furniture in the normal manner, clearly showed the product name as Rawhide and the manufacturer as Parkdale. There was evidence that a number of people purchased the Rawhide furniture believing they were getting Contour. Unfortunately a number of retailers deliberately covered up or removed the labels. Puxu sued for the tort of passing off and misleading or deceptive conduct. Decision: Designs law, passing off, and misleading or deceptive conduct are separate laws and must be applied according to their own requirements. Passing off and misleading or deceptive conduct depend on deception of consumers. Where deception exists, it is necessary to determine the source of the deception. Although some buyers of the Rawhide range were misled, the cause of the deception was not the manufacturer’s copying of the Puxu design, but rather the retailers’ removal or concealment of the labels. The manufacturer had discharged its responsibility by labelling the furniture appropriately according to industry practice. Mason J, however, at [43-790] sounded the following warning, referring to what was then s 52 of the Trade Practices Act 1974 (Cth), now s 18 of the Australian Consumer Law:

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[I] agree … that knowledge by a manufacturer that some retail salesmen, at some time, would deceive customers as to the identity of the manufacturer of its furniture … would not … amount to [misleading or deceptive] conduct breaching s 52. This is not to say that more specific knowledge about the practices of retailers could not provide grounds for attributing that practice to the manufacturer. If [Parkdale] knew that certain retailers were removing its labels or otherwise disguising the furniture’s identity, then assuming that labelling was necessary to comply with s 52, delivery of labelled furniture to those retailers without more may be insufficient to discharge that requirement.

A similar result was reached in Koninklijke Philips Electronics NV v Remington Products Australia Pty Ltd33 (involving a new concept for shavers), Flamingo Park Pty Ltd v Dolly Dolly Creations Pty Ltd34 (involving fabric designs), Dr Martens Australia Pty Ltd v Figgins Holdings Pty Ltd35 (involving look-alike footwear), and Playcorp Group of Companies Pty Ltd v Peter Bodum A/S36 (involving coffee plungers and teapots). The prudent designer will not rely on passing off and misleading or deceptive conduct if it is possible to register a design. The necessity of proving a reputation in the design, for example in a passing off action, could be costly and

33 34 35 36

(2000) 177 ALR 167; 48 IPR 257; [2000] FCA 876. (1986) 65 ALR 500; 6 IPR 431; (1986) ATPR 40-675. (2010) 84 IPR 542; [1999] FCA 461. (1999) 44 IPR 281; [2010] FCA 23.

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ineffective given that the courts are clearly concerned about creating or extending monopolies: see Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd.37

Review of the Designs System 5.33 A variety of concerns have been raised about the effectiveness of the designs system. The Advisory Council on Intellectual Property (ACIP) completed its review of the designs system in March 2015,38 looking at how the designs system could be improved. This was followed by the Productivity Commission’s 2016 Report into Australia’s intellectual property arrangements more broadly,39 including a consideration of those for designs. In its response to both the ACIP report and the Productivity Commission report, the government has agreed to introduce a general grace period for design applicants, so that inadvertent disclosure of a design in the six months before an application for registration will not destroy its newness or distinctiveness. The government has also agreed to consult on the question of whether Australia should join the Hague Agreement for the international registration of industrial designs, which would bring Australian designs law more into line with our major trading partners and international40 treaties, and allow design applicants to seek registration protection in 70 countries through a single international application.

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International Aspects of Designs Law 5.34 The nature of the protection provided for industrial designs varies greatly between countries. There appears to be little consensus as to what should be protected and what the duration of protection should be. The Paris Convention for the Protection of Industrial Property,41 to which Australia is a signatory, requires Australia to provide some legal protection to industrial designs. Clearly Australia satisfies this requirement. The Paris Convention also requires Australia to treat foreign applications on the same basis as it treats resident applications (‘national treatment’) and to provide a right of priority. ‘National treatment’ means Australia may not apply discriminatory 37 (1982) 149 CLR 1; 42 ALR 1; 1A IPR 684; (1982) ATPR 40-307, see 5.32C. 38 Advisory Council on Intellectual Property, Review of the Designs System, Final Report, March 2015, available at . 39 Productivity Commission, Intellectual Property Arrangements, Inquiry Report, above n 2. 40 IP Australia’s response to public consultation on the Hague Agreement, 28 June 2018, available at . 41 Paris Convention for the Protection of Industrial Property 828 UNTS 305 (opened for signature 14 August 1967, entered into force 26 April 1970).

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procedural or substantive rules against foreign applications. Equally, Convention countries must treat Australian nationals in like manner to their own citizens. The right of priority means that any foreign application filed in Australia within six months of having been filed in a signatory country is treated as if it were filed in Australia on the day it was filed in that signatory country. The same applies to Australian applications made in a Convention country. However, it should be noted that the rules and procedures do vary from country to country. Australia is a member of the World Trade Organization. As such it is bound by the provisions of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS),42 which sets out minimum levels of protection for intellectual property. As with the Paris Convention, TRIPS requires countries to provide some protection for industrial designs, but leaves the content of such protection up to each individual country. The Australian Designs Act complies with TRIPS.

Circuit Layout Rights

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5.35 The Circuit Layouts Act 1989 (Cth) provides protection for original layout designs for integrated circuits and computer chips. In the Act, an original layout design for an integrated circuit or computer chip is referred to as an ‘eligible layout’. Eligible layouts are found in a wide variety of electronic equipment, from computers to heart pacemakers. The rights that accrue to the owner of an eligible layout are called the ‘EL rights’. There is no system of registration. Originality is defined in a negative way. Thus, s 11 of the Circuit Layouts Act provides that a circuit layout shall be taken not to be original if: • its making involved no creative contribution by the maker; or • it was commonplace at the time it was made. The owner of the EL rights is the person who made the eligible layout: Circuit Layouts Act s 16. Where the layout was made by a person under the terms of his or her employment under a contract of service or apprenticeship, the employer is taken to be the maker of the layout: Circuit Layouts Act s 16(2). Pursuant to s 17 of the Circuit Layouts Act, the owner of the EL rights has the exclusive right to: • copy the layout, directly or indirectly, in a material form; • make an integrated circuit in accordance with the layout or a copy of the layout; or

42 Agreement on Trade-Related Aspects of Intellectual Property Rights, 15 April 1994, Marrakesh Agreement Establishing the World Trade Organization, Annex 1C, The Legal Texts: the Results of the Uruguay Round of Multilateral Trade Negotiations 320 (1999), 1869 UNTS 299. The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) is an annexure to the GATT Agreement, being the General Agreement on Tariffs and Trade, 15 April 1994, Marrakesh Agreement: the Results of the Uruguay Round of Multilateral Trade Negotiations 17 (1999), 1867 UNTS 187.

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• exploit the layout commercially in Australia (importing, selling, hiring, or otherwise distributing by way of trade). Under s 19 of the Circuit Layouts Act, the EL rights in an eligible circuit are infringed when a person: • copies, or authorises the copying, of the layout in a material form; • makes, or authorises the making of, an integrated circuit made in accordance with the layout; or • commercially exploits, or authorises the commercial exploitation of, the layout in Australia if the person knows or ought reasonably to know, that he or she is not licensed by the owner of that right to do so. It is a defence to a claim of commercial exploitation for the defendant to prove that the defendant did not know, and could not reasonably be expected to have known, that the circuit was unauthorised: Circuit Layouts Act s 20. Copying for private use, for research or teaching purposes or for evaluation or analysis is permitted: Circuit Layouts Act ss 21–23. Protection lasts for 10 years from the date on which the eligible layout was first commercially exploited: Circuit Layouts Act s 5.

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Marketing Advice 5.36 The Designs Act is important to firms that create value through the use of innovative or attractive product designs; that is, where value lies not just in the product generally, but specifically in the way it looks. • If this applies to your firm, you should consider registering the designs under the Designs Act. • The design must be new and distinctive when it is registered. This means that it must be kept secret until the application for registration is lodged. • Ensure that registration is considered at an early stage of design development. • Ensure that all outsourcing contracts have appropriate terms covering ownership of designs. It may also be necessary to include confidentiality clauses. • Firms should have a register of design so that registrations are renewed. Once a design registration lapses, it cannot be renewed. • Check the market for infringing copies and take immediate action.

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Passing Off and Unfair Trading

16

Introduction.......................................................................................... 6.1 Passing Off........................................................................................... 6.2 The elements of passing off at common law.............................. 6.3 A. Reputation................................................................................ 6.4 i. Level of business activity necessary to establish a reputation in the marketplace........................................ 6.5 ii. Reputation in a market where no business activities are carried on...................................................... 6.6 iii. The owner of the reputation does not have to be personally known in the marketplace..................... 6.7 iv. Can a reputation be owned by more than one trader?.......................................................................... 6.8 v. Acquiring a reputation in descriptive words or material........................................................................... 6.9 B. Misrepresentation.................................................................. 6.10 i. Proving confusion or deception in passing off cases................................................................................... 6.11 ii. Intention to deceive......................................................... 6.12 iii. Common field of activity................................................. 6.13 iv. Use of a disclaimer to avoid the likelihood of deception...................................................................... 6.14 C. Damage.................................................................................... 6.15 Remedies......................................................................................... 6.16 Misleading or Deceptive Conduct — Statutory Passing Off........ 6.17 The elements of statutory passing off....................................... 6.18 The overlap between s 18 and passing off................................. 6.19 213

Marketing and the Law

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Advantages of statutory protection over the common law....... 6.20 A. Reputation............................................................................... 6.21 B. Misrepresentation.................................................................. 6.22 C. Damage................................................................................... 6.23 Intention to mislead or deceive.................................................. 6.24 Degree of differentiation required to avoid a contravention of s 18................................................................. 6.25 Use of a disclaimer to avoid a contravention of s 18............... 6.26 Preventing other traders from using descriptive words or material................................................................................... 6.27 Remedies......................................................................................... 6.28 Types of Passing Off — Common Law and Statutory................. 6.29 Brand names ................................................................................... 6.30 ‘Get-up’ or packaging of products.............................................. 6.31 Business and company names..................................................... 6.32 Internet domain names................................................................ 6.33 Keyword advertising...................................................................... 6.34 Search engine optimisation......................................................... 6.35 Design of products........................................................................ 6.36 Advertising themes and slogans.................................................. 6.37 Devices or logos............................................................................. 6.38 Names for events or programs.................................................... 6.39 Titles for publications.................................................................... 6.40 Quality or standard of products.................................................. 6.41 Character merchandising and sponsorship............................... 6.42 A. Real persons........................................................................... 6.43 B. Voice........................................................................................ 6.44 C. Fictitious characters and images......................................... 6.45 Marketing Advice............................................................................... 6.46

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Introduction 6.1 In the process of marketing and selling products, the designation used to identify a product in the marketplace — most often a brand name or business name — is usually an important element in achieving commercial success. The name, mark or other indicia under which [a product] is sold will … play a crucial role in attracting custom, and the goodwill or reputation that are built up around such names, marks or indicia will be critically important marketing assets for any trader.1

Broadly, the law protects trade designations in three ways: 1. The goodwill or reputation associated with a trade designation, established by a trader in the course of marketing a product, can be protected at common law by the passing off action. 2. Trade designations are indirectly protected by the provisions of the Australian Consumer Law (Sch 2 to the Competition and Consumer Act 2010), which includes a prohibition on misleading or deceptive conduct. 3. Distinctive trade designations can be registered pursuant to the Trade Marks Act 1995 (Cth), a step which grants proprietary rights to the registered owner. The first two areas of law will be dealt with in this chapter, and the registration of trade marks in Chapter 7.

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Passing Off 6.2 Traditionally, trade designations such as brand names and business names have been protected at common law by the passing off action and, despite the introduction of a system for the registration of trade marks, passing off remains a widely used legal remedy. The fact that a designation has been or could be registered as a trade mark does not affect the right of a trader to rely on the passing off action for protection, which in some ways can be broader than the protection available under the trade marks legislation. The tort of passing off is designed to prevent a trader from damaging another trader’s reputation or goodwill by causing potential customers to associate one trader’s product or business with another trader’s where no such connection exists. This is often done by the adoption of a brand name or business name which is the same as, or very similar to, a competitor’s brand or business name. The passing off action can be used to protect more than just a brand name or business name. For example, the general appearance or ‘get-up’ of a product can be protected, as well as distinctive advertising or packaging. To this extent, it has 1

S Ricketson, Intellectual Property, Butterworths, Sydney, 1994, p 803.

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advantages in comparison to the rights obtained on registration of a trade mark. However, there are downsides to the passing off action. To begin with, for passing off it is necessary to prove the existence of a reputation in the products or business being protected, whereas the only requirement necessary to protect a trade mark is registration. Furthermore, it is necessary to prove that the actions of the defendant trader have confused or are likely to confuse the purchasing public into associating the defendant’s products or business with the plaintiff’s. It is with regard to such matters that the Trade Marks Act provides its primary advantage. Registering a trade mark gives the registered owner proprietary rights to the mark and, with it, the right to sue another trader who uses the mark for infringement, usually without the need to prove any deception or confusion in the marketplace. In contrast, ‘a passing off action is a remedy for the invasion of a right of property not in the mark, name or get-up improperly used, but in the business or goodwill likely to be injured by the misrepresentation’ made by passing off one person’s goods or services as the goods or services of another.2

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The elements of passing off at common law 6.3 To comprehensively define ‘passing off’ is not an easy task. Lord Oliver provided a traditional and widely accepted definition in Reckitt & Colman Products Ltd v Borden Inc,3 where the core concepts of the passing off action were outlined. It is essential to establish that: • the trader’s get-up, including the brand name or business name, is recognised by the public as distinctive (ie, the trader has established a reputation); • there has been a misrepresentation by the defendant to the public (whether or not intentional) leading or likely to lead the public to believe that the goods or services offered by the defendant are the plaintiff’s goods or services;4 and • the plaintiff suffered, or is likely to suffer, damage by reason of the erroneous belief engendered by the defendant’s misrepresentation that the source of the defendant’s goods or services is the same as the source of those offered by the plaintiff. It must be noted that the modern day passing off action has been extended to circumstances involving the deceptive or confusing use of names, descriptive 2 3

4

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Star Industrial Co Ltd v Yap Kwee Kor t/as New Star Industrial Co (1975) 1B IPR 582; [1976] 2 FSR 256 at 269 per Lord Diplock. (1990) 17 IPR 1; [1990] 1 All ER 873; [1990] 1 WLR 491 at 406, see 8.3C. Cited with approval by Gummow J in ConAgra Inc v McCain Foods (Australia) Pty Ltd (1992) 106 ALR 465; 23 IPR 193 at 246–248; and by the Full Federal Court in TGI Friday’s Australia Pty Ltd v TGI Friday’s Inc (1999) 45 IPR 43; [1999] FCA 304, Sydneywide Distributors Pty Ltd v Red Bull Australia Pty Ltd (2002) 55 IPR 354; [2002] FCAFC 157, see 6.11C2, and Peter Bodum A/S v DKSH Australia Pty Ltd (2011) 280 ALR 639; 92 IPR 222; [2011] FCAFC 98. Whether the public is aware of the plaintiff’s identity as the manufacturer or supplier is immaterial, provided the goods or services are identified with a particular source, for example, a brand name or business name that belongs to the plaintiff.

Chapter 6: Passing Off and Unfair Trading

terms, or other indicia designed to persuade purchasers to believe goods or services have an association, quality, or endorsement which belongs to the goods or services of another.5 The important elements6 from the definition above that require amplification are: • reputation (goodwill); • misrepresentation (deception); and • damage.

A. Reputation 6.4 In establishing passing off, an essential element is the need to prove the existence of a reputation or goodwill on the part of the plaintiff in the trade designation which is the subject of the dispute. A successful passing off action is designed to protect property — not property in a particular trade designation, but property in the reputation or goodwill that will be injured by the improper use of that trade designation.7 It is this requirement which lies at the heart of the action. Nevertheless, it is an element that, in practice, has not proved difficult to establish, provided some element of commercial activity in respect of the trade designation is evidenced, such as selling or advertising within the relevant jurisdiction.

i. L evel of business activity necessary to establish a reputation in the marketplace 6.5 A simple trading presence in the jurisdiction appears to be a satisfactory means of establishing a reputation in the marketplace.

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Stannard v Reay [1967] RPC 589 Facts: The plaintiffs commenced business on the Isle of Wight (UK) with a mobile fish and chip van under the trade name ‘Mr Chippy’. The defendants independently had the idea to commence a similar kind of business and began to trade under the same name three weeks after the plaintiffs had commenced their business. The plaintiffs sought an injunction to prevent the defendants from trading under the name ‘Mr Chippy’. The defendants argued that the plaintiffs had not built up a reputation and established goodwill in the name ‘Mr Chippy’. Decision: No person has the right to trade or dispose of their goods in such a way as to suggest that their trade or goods are in fact the trade or goods of another. Even though the plaintiffs had only been trading for about three weeks, there was evidence of substantial takings by the 5

Moorgate Tobacco Co Ltd v Philip Morris Ltd (No 2) (1984) 156 CLR 414 at 445; 56 ALR 193; 3 IPR 545 per Deane J, see 3.13C2; and see Sydneywide Distributors Pty Ltd v Red Bull Australia Pty Ltd (2002) 55 IPR 354; [2002] FCAFC 157 at [61], see 6.11C2; and Campomar Sociedad, Limitada v Nike International Ltd (2000) 202 CLR 45; 169 ALR 677; [2000] HCA 12 at [109], see 6.30C. 6 Described as the ‘classical trinity’ or the ‘core concepts’ by Gummow J in ConAgra Inc v McCain Foods (Australia) Pty Ltd (1992) 106 ALR 465; 23 IPR 193 at 247. 7 Burberrys v J C Cording & Co Ltd (1909) 100 LT 985; 26 RPC 693 at 701 per Parker J.

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Marketing and the Law business, which fell when the defendants commenced trading. It is not impossible for goodwill in a new kind of business to be built up in a short period of time. An injunction was granted.

The level of sales does not have to be substantial. Cricketer Ltd v Newspress Pty Ltd & David Syme & Co Ltd [1974] VR 4778 Facts: The plaintiff, an English company, had for a number of years published a monthly magazine known as The Cricketer. It contained mainly news about cricket in England, with around half a page on Australian cricket. It was printed on quality paper and it sold around 1200 to 1300 copies a month through Australian newsagents, of which about 130 were sold in Victoria. In addition, about 300 to 400 copies per month were posted to Australian subscribers.

6.5C2

The defendant commenced publishing a monthly magazine in Victoria called Cricketer. Bold type on the front indicated that the magazine was ‘Australia’s New Monthly Magazine’. The magazine was printed on newspaper quality paper and was largely devoted to cricket in Australia. The plaintiff sought an injunction to restrain the defendant from passing off and distributing its magazine under the name Cricketer.

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Decision: A major issue was whether the name The Cricketer had a distinctive reputation in Victoria, given the small level of sales in that state. In making such a judgment, the proportion of readers to the public at large is not relevant. All that is necessary is that a substantial number of readers exist in the jurisdiction who associate the name The Cricketer with the plaintiff. Such was held to be the case here. Despite this conclusion, the case was dismissed because no proof of actual or likely confusion between the two publications was established before the court.

Sales alone are not the only indicator of a reputation in the marketplace. Widespread advertising as a precursor to commencing a business within a jurisdiction may be sufficient: see Turner v General Motors (Aust) Pty Ltd9 and Fletcher Challenge Ltd v Fletcher Challenge Pty Ltd.10 Website visits can also be useful evidence of reputation: see REA Group Ltd v Real Estate 1 Ltd.11 In Knott Investments Pty Ltd v Winnegbago Industries Inc,12 evidence of the travel habits of Australians was relevant evidence.

ii. Reputation in a market where no business activities are carried on 6.6 In Australia, it now appears settled that it is not necessary to have commenced business activities within the jurisdiction in which a passing off action is commenced, provided the existence of a reputation in that jurisdiction is proved. 8

This case has many similarities to Emap Elan Ltd v Pacific Publications Pty Ltd (1997) 37 IPR 1; (1997) ATPR 41-551; [1997] FCA 50, see 6.40C, where s 52 of the Trade Practices Act 1974 (Cth) (now s 18 of the Australian Consumer Law) was relied upon by a UK publisher to gain an interlocutory injunction preventing an Australian publisher from publishing a magazine under an identical title. 9 (1929) 42 CLR 352; 1B IPR 415. 10 [1981] NSWLR 196; (1981) 5 ACLR 532. 11 (2013) 102 IPR 1; [2013] FCA 559, see 6.27C4. 12 (2013) 299 ALR 74; 101 IPR 449; [2013] FCAFC 59, see 6.16C.

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Hansen Beverage Co v Bickfords (Australia) Pty Ltd (2008) 251 ALR 1; 79 IPR 174; [2008] FCAFC 18113 Facts: Hansen had, since 1992, successfully marketed a range of non-alcoholic beverages in the US. In 2002 it launched a new energy drink in a super-sized container, to compete with Red Bull. The brand name created for the product was ‘MONSTER ENERGY’. The product was targeted at 18–30 year old males. Hansen engaged in a significant amount of indirect advertising through its website and the internet, sponsorship of athletes and events (which received media and internet coverage), clothing, merchandise, and the like. The product became highly successful in the US and in some overseas locations, including Hong Kong — so much so that it became the second biggest selling energy drink in the world. However, the product was not sold or directly promoted in Australia. Bickfords is an Australian beverage manufacturer based in Adelaide. In 2006 it launched a ‘super-sized’ energy drink using the name ‘Monster’, which it registered as a trade mark. It also adopted a black can and used a green ‘Monster’ mark, the same colours as used by Hansen in the US. Both products essentially had the same ingredients. Hansen sued Bickfords alleging passing off and breach of s 52 of the Trade Practices Act (now s 18 of the Australian Consumer Law). The trial judge in the Federal Court dismissed the case on the basis that Hansen had not established that it had a reputation in Australia. Despite acknowledging that there was an awareness of the Hansen product by Australians who followed ‘extreme sports’, the trial judge decided that exposure to incidental or indirect advertising, without direct sales or advertising in Australia, was not sufficient to establish a reputation. Hansen appealed against this finding. Decision: The Full Federal Court upheld the appeal. It noted the impact of indirect advertising and acknowledged that the advertising industry had moved away from relying on direct marketing techniques as their primary source of advertising. The value of indirect advertising through sponsorship of sports was clearly recognised, especially by Finkelstein J, who stated that:

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[I]ndirect brand advertising … can establish reputation as well as, if not better than, direct advertising. After all, everyone knows that James Bond drives an Aston Martin, Janis Joplin wanted to own a Mercedes Benz and Audrey Hepburn had breakfast at Tiffany’s. The case was referred back to the trial judge for a rehearing, with instructions that greater weight was to be given to the indirect marketing campaign undertaken by Hansen to establish its reputation. (The rehearing did not take place. In December 2008, the parties entered into a confidential settlement agreement resolving the dispute. Bickfords agreed to cease all use of the Monster and Monster Energy marks in Australia (after depletion of its existing inventory) and to assign to Hansen all of its trade mark applications.)

In Hansen Beverage Co v Bickfords (Australia) Pty Ltd,14 the Federal Court has thus confirmed its preference for a test based solely on reputation, without the extra requirement of proving a business presence.15 13 See also 10.12C. 14 (2008) 251 ALR 1; 79 IPR 174; [2008] FCAFC 181, see 6.6C and 10.12C. 15 This case is consistent with the views expressed by the Federal Court in ConAgra Inc v McCain Foods (Australia) Pty Ltd (1991) 101 ALR 461; 22 IPR 175; (1991) ATPR 41-121.

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It is not difficult to see why the courts had some reservations before adopting this approach. The traditional view is that passing off is a cause of action designed to protect a trader’s goodwill. If the trader does not do business within the jurisdiction, then goodwill cannot suffer — the trader is unable to point to any losses or the expectation of losses. However, the commercial reality is that companies do have reputations that transcend the boundaries of the areas in which they do business. This is largely the result of the revolution in international communications, especially the burgeoning growth in the use of the internet. The ground rules have changed in this digital era. Australian courts have now formally recognised the power of indirect marketing techniques when applied to well-known brands sold overseas, but not yet sold in Australia. When assessing reputation in Australia, the courts can look at the impact of indirect marketing through ‘jurisdiction-transcending’ marketing techniques. Traders with an international reputation would suffer a loss if that reputation could not be protected, namely, the loss of the right to use a name or image in Australia, or the loss of the right to a licensing fee.

iii. T he owner of the reputation does not have to be personally known in the marketplace

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6.7 As long as a trader can establish that a reputation exists for its trade designation in the marketplace, it does not matter that the trader is not personally known. It is generally the source of the product or business that is important to the buying public: see Emrik Sporting Goods Pty Ltd v Stellar International Sporting Goods Pty Ltd.16 However, the plaintiff must be able to establish that members of the public had purchased a product, or were likely to do so, in the belief that it had emanated from a particular source: see Polite Chnika Ipari Szouetkezet v Dallas Print Transfers Ltd.17

iv. Can a reputation be owned by more than one trader? 6.8 In rare cases it is possible for a reputation or goodwill to be owned by a number of traders collectively. As long as the plaintiff is one of the sources of the product in question, a passing off action can be commenced against a person who is not a legitimate source of the product.

16 (1981) 53 FLR 319; (1981) ATPR 40-217. 17 [1982] FSR 529.

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Bollinger v Costa Brava Wine Co Ltd (No 2) [1961] 1 All ER 561; [1961] RPC 11618 Facts: The defendant imported sparkling wine from Spain and marketed it in the United Kingdom. It was described as ‘Spanish Champagne’. The plaintiffs, Bollinger and 11 other producers of wine from the Champagne district in France, sought an injunction restraining the sale of the wine relying upon passing off. The plaintiffs alleged that the public would be deceived into thinking that the Spanish wine was the wine with the great reputation made in the Champagne district by the ‘methode champenoise’.

6.8C

Decision: By using the term ‘Champagne’, the defendant was damaging the plaintiffs’ goodwill. The term ‘Champagne’ had long been exclusively used in the United Kingdom with regard to wines produced by the plaintiffs. A significant number of people whose life or education has not taught them much about the nature and production of wine and who had been recommended to purchase Champagne would be deceived by the description ‘Spanish Champagne’. These people would not be aware that the Champagne district is in France, and that the defendant’s wine was a different product altogether. An injunction was granted on the basis of the passing off.

v. Acquiring a reputation in descriptive words or material 6.9 Before a plaintiff can bring a passing off action, it is necessary to show that any words or ‘get-up’ used have become distinctive of the particular trader. Descriptive or generic words will often not meet this requirement. For example, the more descriptive a word or words, the more difficult it will be to convince a court that a plaintiff ought to have some sort of monopoly over the word or words. However, it is possible for descriptive words to acquire a secondary meaning distinctive of (or exclusively associated with) a plaintiff, which the courts will protect.

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BM Auto Sales Pty Ltd v Budget Rent A Car System Pty Ltd (1976) 12 ALR 363; 51 ALJR 254 Facts: Budget operated a car rental business in most major centres throughout Australia, although not in Darwin. In 1967 it made arrangements to open an agency in Darwin and from 1968 its name and telephone number appeared in the local telephone directory. Until 1971 Budget did no other advertising in Darwin. The Darwin agent’s role was primarily to handle inquiries from interstate visitors. In 1968 the defendant, who operated a car repair and hire business in Darwin, commenced use of the name ‘Budget’ in relation to the hiring of cars. In 1971 the plaintiff expanded its operation in Darwin and demanded that the defendant stop using the word ‘Budget’. Eventually the plaintiff brought an action alleging passing off. The evidence indicated that the plaintiff was known in Darwin by virtue of its Australia-wide reputation.

18 See also Erven Warnink BV v J Townend & Sons (Hull) Ltd [1979] 2 All ER 927; (1979) 1A IPR 666 (use of the word ‘advocaat’) and Chocosuisse Union des Fabricants Suisses de Chocolat v Cadbury Ltd [1999] RPC 826, see 6.41C. The UK decision of Bollinger v Costa Brava Wine Co Ltd (No 2) [1961] 1 All ER 561; [1961] RPC 116, see 6.8C, can be contrasted with the outcome of a similar dispute in Australia, Comité Interprofessional du Vin de Champagne v N L Burton Pty Ltd (1981) 38 ALR 664; (1981) ATPR 40-258; (1982) 1 TPR 128. Legislation now regulates the term ‘champagne’ as a geographical indication: see Wine Australia Corporation Act 1980 (Cth).

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Marketing and the Law Decision: The High Court concluded that the plaintiff had a reputation in Darwin by virtue of its Australia-wide reputation and by virtue of the fact that it had commenced business activities in Darwin by appointing an agent and placing its name in the telephone directory. This occurred prior to the defendant using the name. There was sufficient evidence to conclude that the similarity between the names had caused confusion between the businesses of the plaintiff and the defendant. An injunction preventing the defendant trading under the name ‘Budget’ was granted.

Even if the courts do grant some form of monopoly over the use of descriptive words, they will be careful to restrict the monopoly. The owner of the name ‘Budget’ in relation to hire cars cannot expect its monopoly over the word to extend to other products, for example, motels offering accommodation services.

B. Misrepresentation 6.10 Generally speaking, passing off will have occurred where the defendant’s conduct has misled, deceived, or confused a significant number of persons in the marketplace into believing either that: • the defendant’s business is that of the plaintiff, or that the defendant’s products are those of the plaintiff; or • the defendant’s business or products are associated with the plaintiff, at least to the extent of implying some sort of approval on the part of the plaintiff of the activities of the defendant.

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The most obvious type of passing off is where the defendant is producing a product similar to the plaintiff’s product in competition with the plaintiff and uses a name or ‘get-up’ (package, label, logo) that is so similar to the plaintiff’s that a reasonable number of customers will be confused as to the origin of the product. Targetts Pty Ltd v Target Australia Pty Ltd (1993) 26 IPR 51; (1993) ATPR 41-231 6.10C

Facts: The plaintiff had for many years carried on a retail clothing and footwear business in Launceston, Tasmania, under the name ‘Targetts’. The defendant, Target Australia, operated a large number of discount stores throughout mainland Australia and proposed to commence trading in Launceston, near the Targetts store. Both parties used a ‘target’ logo that was similar to the other in both shape and colour.

Target Targetts The plaintiff sought an injunction to prevent ‘Target’ trading under its business name, relying on passing off and s 52 of the Trade Practices Act (now s 18 of the Australian Consumer Law).

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Chapter 6: Passing Off and Unfair Trading Decision: Targetts had a well-established reputation in Launceston and surrounding areas in the business which it conducted, and there was no evidence to show any widespread awareness among the Launceston public of the existence and operations of the defendant. By using the name ‘Target’ and its logo, Target was likely to mislead or deceive members of the public in Launceston in the following ways: • A significant number of potential customers intending to deal with Targetts would end up going to Target. • People seeing the similar name and logo being used in a similar business by a new entrant would be likely to believe that this could only happen by virtue of some arrangement or connection between the old established business, Targetts, and the newcomer, Target. The existence of the reputation of Targetts in Launceston and the likelihood of confusion among its customers and potential customers by the use of a similar name and logo amounts to passing off. The conduct would also mislead and deceive in breach of s 52 of the Trade Practices Act (now s 18 of the Australian Consumer Law). An injunction was granted restraining ‘Target’ from using its name and logo in connection with any business of retail sale of clothing, footwear, or manchester products within 30 kilometres of the plaintiff’s store.

i. Proving confusion or deception in passing off cases

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6.11 It is not always easy to prove confusion or deception. In some cases, the facts are such that the likelihood of deception is very apparent. In other cases, without evidence of actual deception in the marketplace, a passing off action will be difficult to establish unless a strong probability of deception can be established. However, there is no strict requirement for proof of actual deception: Sydneywide Distributors Pty Ltd v Red Bull Australia Pty Ltd;19 Nutrientwater Pty Ltd v Baco Pty Ltd.20 Cadbury Schweppes Pty Ltd v Pub Squash Co Pty Ltd [1980] 2 NSWLR 851; (1980) 32 ALR 387; [1981] 1 All ER 213 Facts: The plaintiff, Cadbury Schweppes, was a major manufacturer of soft drinks. In 1973 the plaintiff decided upon a new strategy to increase its share of the market in soft drinks in Australia. It would develop a new product to compete with Coca-Cola (but not cola flavoured). The plaintiff selected as its product a lemon squash, which the trial judge described as ‘a type of soft drink commonly accepted in hotels and licensed clubs and restaurants as an occasional alternative to beer’. It was to be presented as a man’s drink, fit for, and a favourite with, rugged, masculine adventurers. The advertising campaign was to stress its masculinity and at the same time invoke happy memories of the sort of squash that hotels (pubs) and bars in the past used to make. The two themes of manliness and nostalgia were reflected in the name of the product and its get-up. The product was named ‘Solo’ and the plaintiff designed a medallion type of label very similar

19 (2002) 55 IPR 354; [2002] FCAFC 157, see 6.11C2. 20 (2010) 265 ALR 140; 84 IPR 452; [2010] FCA 2.

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Marketing and the Law to the labels used on beer sold in Australia. It was to be sold in cans and bottles, but especially cans, for which the plaintiff chose a distinctive greenish-yellow colour. In 1976, the Pub Squash Co released a product similar in appearance, colour, and size under the ‘Pub Squash’ label. In so doing, it set out in a deliberate and calculated fashion to take advantage of the plaintiff’s past efforts in developing Solo and ‘chose a product name and package … derived from and intended to gain the benefit of the plaintiff’s past and anticipated advertising campaign and the plaintiff’s package for their product’. The competition from Pub Squash and certain other lemon squashes that entered the market in 1975 had an effect upon the sales of Solo. They were 15% lower in 1976 than they had been in 1975. In 1977 the plaintiff instituted proceedings against Pub Squash, claiming an injunction and either damages or an account of profits for passing off. Decision: A balance must be maintained between free competition and protection of a trader’s investment in its product. A defendant does no wrong by entering a market created by another and competing with the creator, as long as the defendant sufficiently differentiates its product from that of the creator. In this case, the radio and television advertisements were descriptive of the product (Solo), but had not become a distinguishing feature. In other words, they had not become so much a part of the image of Solo that the plaintiff could be said to have property in the concepts of masculinity and nostalgia used in the advertising campaign. In relation to the similarity in the cans, the defendant was under a duty to ensure that its can was sufficiently distinguished from the plaintiff’s. Although there were similarities between the two cans and although there may have been some initial confusion by consumers (due largely to the consumers’ casual attitude), the cans were sufficiently different that any confusion would have been dispelled before the moment of sale.

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Thus there was no ‘relevant misrepresentation’ in the sense that customers, or potential customers, were led by the similarities in the get-up and advertising of the two products into believing that Pub Squash was the Cadbury Schweppes product. In other words, the defendant had sufficiently distinguished its product from Solo.

The decisive factor in Cadbury Schweppes Pty Ltd v Pub Squash Co Pty Ltd21 was the use of a distinctive and prominent brand name by the defendant, which overcame the fact that there were a number of other similarities between the products involved. This approach has long been the accepted way of dealing with allegations of misrepresentation in passing off disputes. However, that approach was challenged in Sydneywide Distributors Pty Ltd v Red Bull Australia Pty Ltd.22

6.11C2

Sydneywide Distributors Pty Ltd v Red Bull Australia Pty Ltd (2002) 55 IPR 354; [2002] FCAFC 157 Facts: Red Bull was an energy drink that had been successfully marketed in Australia since 1997. It was sold in slimline cans with a distinctive design incorporating the colours silver and blue, a brand name in large red letters, and a graphic device depicting two red bulls charging each other. The defendant began distributing a competitive energy drink known as Live Wire. 21 [1980] 2 NSWLR 851; (1980) 32 ALR 387; [1981] 1 All ER 213, see 6.11C1. 22 (2002) 55 IPR 354; [2002] FCAFC 157, see 6.11C2.

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Chapter 6: Passing Off and Unfair Trading The plaintiff alleged that the get-up of the defendant’s product was so similar as to constitute passing off, based on the fact that it incorporated a similar design and layout with an almost identical red, blue, and silver colour scheme on the same distinctive slimline can as that used by the plaintiff. The defendant argued that any similarities and potential to deceive was overcome by the use of a distinctive and prominent trade mark on the front of the can, critical to the outcome in Cadbury Schweppes Pty Ltd v Pub Squash Co Pty Ltd.23 To overcome this argument, the plaintiff called upon an expert witness who focused on the ‘gestalt’ of the Red Bull brand — gestalt being defined as ‘an integrated perceptual structure or unity conceived as functioning more than the sum of its parts’. In other words, the overall identity of a brand includes the name, colour, physical properties and packaging, as well as associations with the brand, including advertising and distribution channels. Buyers recognise and differentiate between brands on the basis of the overall look and feel of the product and its total image, particularly where no single brand element is dominant, and where the whole is greater than the sum of its parts. It was submitted that, where the gestalt of two products are almost identical, some consumers are likely to perceive them as comprising the same brand and/or as being derived from the same source. On the basis of such evidence, the trial judge concluded that passing off had been established. On appeal to the Full Federal Court, the defendant argued that the trial judge had erred in not considering the effect upon his perceptions of the prominent brand names of the products involved.

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Decision: While the Full Court acknowledged that the brand names were prominent and created significant differences in appearance, and were therefore highly relevant in determining the likelihood of deception, it (perhaps surprisingly) refused to overturn the trial judge’s decision. While the Court did not give a ringing endorsement to the gestalt theory, it appeared a little critical of the failure on the part of the defendant’s counsel to adequately challenge the expert opinions and the evidence presented. It was therefore unwilling to find that the trial judge had erred in relying upon such evidence. The Full Court accepted the trial judge’s view that the defendant had gone ‘too far’ in seeking to ‘cash in’ on the reputation of Red Bull, and had stepped over the line of misrepresentation.24

This decision should, however, be treated with caution. While it is true that evidence of actual confusion is not necessary to prove passing off, and that it is only necessary to prove the likelihood of confusion, usually the absence of such evidence will make it difficult to demonstrate such a likelihood. This is particularly the case when the offending product has been in the marketplace for some time, in which situations the courts are more likely to require actual proof of deception. In Sydneywide Distributors Pty Ltd v Red Bull Australia Pty Ltd,25 where 23 [1980] 2 NSWLR 851; (1980) 32 ALR 387; [1981] 1 All ER 213, see 6.11C1. 24 If it can be shown that a defendant had the object of causing damage (ie, to encourage purchasers to deal with the defendant instead of the plaintiff due to a misrepresentation), the courts will often infer that the defendant has achieved this purpose without proof of actual deception. A factor supporting such a view in Sydneywide Distributors Pty Ltd v Red Bull Australia Pty Ltd (2002) 55 IPR 354; [2002] FCAFC 157, see 6.11C2, was the choice of the prominent colours by the defendant, which could not be justified on the basis of their descriptive nature; in contrast to Cadbury Schweppes Pty Ltd v Pub Squash Co Pty Ltd [1980] 2 NSWLR 851; (1980) 32 ALR 387; [1981] 1 All ER 213, see 6.11C1, where the yellow-green used on both products signified the lemon flavour of the drink. 25 (2002) 55 IPR 354; [2002] FCAFC 157, see 6.11C2.

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the plaintiff moved quickly to assert its rights, the absence of such evidence seemed to be overcome by the presentation of expert evidence that was not vigorously challenged. It should be observed that in Simplot Australia Pty Ltd v McCain Foods (Aust) Pty Ltd,26 reliance on the gestalt theory failed to convince the court that passing off had occurred in a case where the clearly different and well known trade marks used by the parties were prominently displayed on the packaging.27 The approach used in Cadbury Schweppes Pty Ltd v Pub Squash Co Pty Ltd28 now appears to have been firmly reestablished in Mars Australia Pty Ltd v Sweet Rewards Pty Ltd.29 Mars Australia Pty Ltd v Sweet Rewards Pty Ltd [2009] FCAFC 17430 6.11C3

Facts: The plaintiff, Mars Australia Pty Ltd (Mars), has successfully manufactured, distributed, and marketed Maltesers in Australia since 1989. Maltesers are a well-known confectionery consisting of chocolate-covered malt balls, and are a major player in the bite-size confectionery market. The plaintiff registered the word ‘Maltesers’ as a trade mark. For quite some time a typical packet of ‘Maltesers’ has looked like this:

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Maltesers in such packaging have been sold in numerous locations throughout Australia and have been marketed extensively on television, in print, and at cinemas. Sweet Rewards imports confectionery products into Australia. In 2005, Sweet Rewards began distributing a chocolate-covered malt ball product made in Singapore under the name ‘Delfi’ Malt Balls. Delfi Malt Balls was sold principally through Target and Kmart, but also through a number of other discount stores. The product looked like this:

26 27 28 29 30

(2001) 52 IPR 539; [2001] FCA 518, see 6.27C2. There were also significant differences in the packaging itself. [1980] 2 NSWLR 851; (1980) 32 ALR 387; [1981] 1 All ER 213, see 6.11C1. (2009) 81 IPR 354; [2009] FCA 606, see 6.11C3. See also Nutrientwater Pty Ltd v Baco Pty Ltd (2010) 265 ALR 140; 84 IPR 452; [2010] FCA 2.

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Chapter 6: Passing Off and Unfair Trading The colour schemes used on the respective labels and packages were quite similar, both having a deep red background. (Delfi Malt Balls were also available in orange packaging, but these products were not in contention in this case.) Mars, relying on the passing off action and s 52 of the Trade Practices Act (now s 18 of the Australian Consumer Law), alleged that the distribution of Delfi Malt Balls was unlawful because the ‘get-up’ wrongly suggested a connection between it and Maltesers, which did not exist; and represented to consumers that the contents were the same as Maltesers when, in fact, they were not. (It also complained that the use of the words ‘Malt Balls’ infringed the registered trade mark ‘Maltesers’.) Decision: On appeal, the court confirmed the judgment at first instance. They held that because the principal component in the Maltesers get-up is the word ‘Maltesers’, it was highly unlikely that any ordinary consumer of chocolate confectionery could mistake something which is not called a Malteser for a Malteser. In that sense, they noted, Mars is a victim of its own success. The fact that the Delfi jars carry the name Malt Balls and use slightly different visual features was sufficient to distinguish them from the Maltesers products. The court held that cases may well be imagined — the present was not one — where two product names might be deceptively similar because of the names used and the manner in which those names are presented. For example, the use of the fictional word ‘Mallesers’ among visual features that were otherwise identical to those of the Maltesers products would be likely to confuse some people, even some ordinary consumers of chocolate confectionery, into thinking they were buying Maltesers. Similarly, the use of the words ‘Malt Balls’ in the script and style denoted in the Maltesers brand flag, and among visual features that were otherwise identical to those of the Maltesers products, might also be a source of confusion. In that context, shape and form may have a part to play. In the court’s view, no ordinary person could have thought that the Malt Balls products in their current form misleadingly resembled the Maltesers product.

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There were three other obstacles to Mars’s claim. First, the word ‘Delfi’ with a skier motif next to it emblazoned on the label is a significant feature which finds no counterpart in the Maltesers get-up. Second, the colour of the packaging and the use of a depiction of the contents (cut-through malt balls) is commonplace in confectionery packaging. Third, while there was some limited similarity between the red Delfi jar and the Maltesers product, in that both were festooned with floating chocolate balls, this condition was not sufficient to overcome the effect of the words ‘Malt Balls’, the ‘Delfi’ mark, and the effect of the Maltesers mark. (The product equivalence argument was also dismissed — without any deceptive similarity of appearance between the two products, consumers were unlikely to assume that the products were made of the same ingredients or tasted the same. The trade mark infringement claim was also rejected.)

This approach is confirmed by the recent Full Federal Court decision in Stone & Wood Group Pty Ltd v Intellectual Property Development Corporation Pty Ltd.31 Stone & Wood Group Pty Ltd v Intellectual Property Development Corporation Pty Ltd (2018) 357 ALR 15; [2018] FCAFC 29 Facts: Stone & Wood are craft beer brewers, based in Byron Bay, New South Wales. Since 2010 their bestselling product has been a craft beer under the name ‘Pacific Ale’. The respondents are also craft beer brewers, based in Brunswick, Victoria. They changed the name of one of their beers, ‘Thunder

31 (2018) 357 ALR 15; [2018] FCAFC 29, see 6.11C4.

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Marketing and the Law Road’ to ‘Thunder Road Pacific Ale’ in 2015. Stone & Wood argued that the use of this name was both misleading and deceptive under s 18 of the Australian Consumer Law, and constituted passing off. (There was also a claim for trade mark infringement which was not pursued.)

Decision: Both the Federal Court at first instance and the Full Federal Court on appeal rejected these claims. The passing off claim was based on an argument that the use of the words ‘Pacific Ale’ and ‘Pacific’ would lead customers to buy Thunder Road beer when they meant to buy Stone & Wood’s product. Alternatively Stone & Wood argued that the fact that both beers used the term ‘Pacific Ale’ indicated to customers that the Thunder Road beer was produced under licence or with the authority and approval of Stone & Wood — when it was not.

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The Court accepted that Pacific Ale had a distinctive taste, and that the use of the name ‘Pacific’ was evocative of the Byron Bay location of the brewery. However, they also looked closely at the packaging. They said the dominant feature of the packaging was not the word ‘Pacific Ale’, but the Stone & Wood logo. The words ‘Pacific Ale’ appeared on the label, but in much smaller type, as a description of the beer, below the branding. They also noted that the bottle colour was a mustard, or type of orange, colour. By contrast, the Court looked at the Thunder Road packaging. They found that this was very different. The dominant feature was the words ‘Pacific Ale’ and the dominant colours were bright green and bright orange in roughly equal proportions. The shape of the label was different in the two products and the bottle caps were also different colours. The Court concluded that the overall look and feel of the two products was very different, and while they did use the words ‘Pacific Ale’, in designing its labelling Thunder Road did not emulate Stone & Wood. The Court acknowledged that Thunder Road intended to get some advantage by incorporating the words ‘Pacific Ale’ into the name of its beer. However the Court stressed that this tort is not designed to limit legitimate competition (which can include one business seeking to take advantage of the success of another business). Rather it focuses on whether there has been a false representation of association or connection between the two.32 And here, because there was no misrepresentation of association between the two, the tort was not established.

ii. Intention to deceive 6.12 It is not necessary to prove an actual intention to deceive in order to establish passing off. Deception only has to be a reasonably foreseeable consequence. 32 The Court quoted Buckley LJ in HP Bulmer Ltd [1978] RPC 79 at 99.

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However, there is still some doubt as to whether a court will grant damages (as opposed to an injunction) without proof of fraud. Persisting with a form of conduct after being given notice of passing off would be an example of conduct engaged in by a defendant which might entitle a plaintiff to damages: see Hogan v Koala Dundee Pty Ltd.33 In reality, an unwillingness to grant damages against innocent defendants is not a significant problem, as normally an injunction will be the remedy sought.

iii. Common field of activity 6.13 Most passing off cases involve a plaintiff and defendant who are operating in the same field of activity. For instance, in BM Auto Sales Pty Ltd v Budget Rent A Car System Pty Ltd,34 both parties were in the business of hiring out cars; in Cadbury Schweppes Pty Ltd v Pub Squash Co Pty Ltd,35 both parties were producers of soft drinks; in Mars Australia Pty Ltd v Sweet Rewards Pty Ltd,36 both parties were in the confectionery market; and in Stone & Wood v Intellectual Property Development Corporation Pty Ltd37 both parties were in the craft beer market. Despite some conflicting opinions in both the United Kingdom and Australia, it is now settled in Australia that it is not an essential element of the passing off action for the plaintiff and defendant to be engaged in a common field of activity.38 The respective fields of activity of the plaintiff and the defendant are simply one of the matters to take into account in determining whether the public has been confused or misled. If there is no overlap in the fields of activity, the likelihood of confusion or deception is much less than if the parties are involved in the same activity.

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Totalizator Agency Board v Turf News Pty Ltd [1967] VR 605 Facts: The plaintiff was a statutory body that had been created as an agency in Victoria to control off-course betting on horse races. It was commonly referred to in the market place as the ‘TAB’. The defendant commenced publishing a race-tipping newspaper under the name ‘TAB’. The defendant’s paper contained a disclaimer that it was not connected with the plaintiff. The plaintiff sought an injunction to restrain the defendant from using the name TAB on its publication. Decision: There was a real potential for loss of reputation that would lead to loss of sales by the plaintiff. The plaintiff had a very good reputation that was necessary for its commercial success. For it to be seen as the publisher of a ‘tipping sheet’, generally regarded as being notoriously inaccurate, would lower its reputation and injure its business. Despite the existence of the disclaimer, evidence revealed that an appreciable number of persons were in fact deceived.

33 34 35 36 37 38

(1988) 83 ALR 187; (1988) 12 IPR 508. (1976) 12 ALR 363; 51 ALJR 254, see 6.9C. [1980] 2 NSWLR 851; (1980) 32 ALR 387; [1981] 1 All ER 213, see 6.11C1. (2009) 81 IPR 354; [2009] FCA 606, see 6.11C3. (2018) 357 ALR 15; [2018] FCAFC 29, see 6.11C4. See the High Court decision of Campomar Sociedad, Limitada v Nike International Ltd (2000) 202 CLR 45; 169 ALR 677; [2000] HCA 12 at [110], see 6.30C.

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Marketing and the Law The defendant contended that, even if deception and damage were established, the action should fail as the publication of the paper by the defendant would not result in there being any common field of activity in which both the plaintiff and the defendant would be engaged. The judge treated the field of activities engaged in by the parties as being relevant, but only as a factor to be taken into account when assessing the likelihood of confusion: [T]he fact, disclosed by the evidence, that the word ‘TAB’ is used as the name of a soft drink and as part of the name of a brand of chewing gum do not, in my view, impair in any way the strength of the plaintiff’s case on the likelihood of deception. For these, obviously, are uses in entirely different fields of business, whereas the proposed paper would be aimed at the racing and betting public and, in particular, … at the customers and prospective customers of the plaintiff. An injunction was granted preventing the defendant from using the name TAB on its publication.

iv. Use of a disclaimer to avoid the likelihood of deception 6.14 A disclaimer is any device by which the trader making a representation attempts to deny the message otherwise conveyed by the representation: Totalizator Agency Board v Turf News Pty Ltd;39 and Hutchence v South Sea Bubble Co Pty Ltd.40

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6.14C

Children’s Television Workshop Inc v Woolworths (NSW) Ltd [1981] 1 NSWLR 273; (1980) 1B IPR 609 Facts: The plaintiff was the owner and producer of the children’s television program ‘Sesame Street’. The program was very popular in Australia, especially some of the characters known as the ‘muppets’. The plaintiff licensed the right to reproduce the muppet characters as soft toys. At the time of this case, no such licence had been granted in Australia, although negotiations were in hand. The defendant operated a chain of department stores which sold, among other things, soft toys. It purchased some toys from Korea which bore a close resemblance to the muppet characters. The plaintiff had not given any permission to the Korean manufacturer or to the defendant. The Korean toys were sold at a significantly lower price than the plaintiff’s licensed toys could be expected to sell for. The plaintiff alleged that the defendant had passed off the Korean toys as products associated with the plaintiff, in the sense of being products licensed or endorsed by the plaintiff. The defendant attempted to avoid liability by affixing to the bag in which each toy was wrapped, a sticker which read: This product is not manufactured or sold under licence from Children’s Television Workshop Inc or Muppets Inc and is not sold as a Sesame Street character or Muppet character. Decision: It was well known that the creators of fictional characters license others to manufacture or deal in product representations of those characters. The muppets were well known. The Korean toys looked sufficiently like the television characters that persons (especially children) would be misled into believing that the toys were produced and sold with the approval of the plaintiff. It is not necessary to prove actual loss of reputation. The mere 39 [1967] VR 605, see 6.13C. 40 (1986) 64 ALR 33; 6 IPR 473; (1986) ATPR 40-667, see 6.43C1.

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Chapter 6: Passing Off and Unfair Trading presence of the deceptive copies meant that the plaintiff’s business was bound to be adversely affected in some way. The disclaimer on stickers attached to the toys was inadequate. It was insignificant in size, sometimes affixed to obscure places, and was even absent from some toys (having fallen off or not been affixed at all). Many purchasers of the toys were therefore unaware of the existence of the disclosure that the toys were not intended to be representations of the ‘Sesame Street’ characters.

There will, however, be situations where the disclaimer is so clearly made that any potential deception is overcome. The disclaimer must leave no one in doubt that there is no connection between the defendant and the plaintiff or the plaintiff’s product: see Newton-John v Scholl-Plough (Australia) Ltd.41

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C. Damage 6.15 The usual remedy sought by victims of passing off is an injunction. In order to obtain this remedy, the plaintiff must prove actual damage or a real likelihood that such damage will be incurred if the defendant’s activities are allowed to continue. In Solarhart Industries Pty Ltd v Solar Shop Pty Ltd,42 the Solar Shop (‘Solar Hut’) radio commercial was found to amount to a misrepresentation, but the passing off case failed because there was no damage — ‘the confusion engendered by the radio commercial is so complete that it can only have worked to Solahart’s advantage, rather than to its detriment’.43 If damages are sought, the plaintiff must usually establish compensable loss. Where the passing off takes the traditional form of copying the plaintiff’s name or get-up, the potential damage lies in the possibility of sales being diverted from the plaintiff to the defendant. However, sometimes passing off will have the effect of diminishing (diluting) the plaintiff’s reputation. This is especially the case where the reputation is based on the quality of the goods or services provided by the plaintiff: see Totalizator Agency Board v Turf News Pty Ltd,44 where the court accepted that there was a real potential for loss of reputation that would ultimately lead to loss of sales.45 Another form of compensable loss is the loss of a business opportunity, such as the receipt of a sponsorship fee or licence fee. In Henderson v Radio Corp Pty Ltd,46 the court accepted the potential loss of endorsement rights as sufficient to grant an injunction. In Children’s Television Workshop Inc v Woolworths (NSW) Ltd,47 the court acknowledged that the loss of a right to collect a licensing fee was a potential loss justifying an injunction, irrespective of any actual loss of reputation. However, in 41 42 43 44 45

(1986) 11 FCR 233; (1986) ATPR 40-697, see 10.21C. (2011) 281 ALR 544; 92 IPR 165; [2011] FCA 700. At [76]. [1967] VR 605, see 6.13C. See also Bollinger v Costa Brava Wine Co Ltd (No 2) [1961] 1 All ER 561; [1961] RPC 116, see 6.8C, and Chocosuisse Union des Fabricants Suisses de Chocolat v Cadbury Ltd [1999] RPC 826, see 6.41C. 46 (1960) 60 SR (NSW) 576; 77 WN (NSW) 585; 1A IPR 620. 47 [1981] 1 NSWLR 273; (1980) 1B IPR 609, see 6.14C.

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cases such as this, there would clearly be a reduction in goodwill if the defendant could imitate the plaintiff’s product with impunity. Finally, the loss of an opportunity to extend or expand the product range (and in so doing to take advantage of an established brand name’s reputation) should also be recognised as a form of compensable loss: see Campomar Sociedad, Limitada v Nike International Ltd;48 and Lego System Aktieselskab v Lego M Lemelstrich Ltd49 (where the toy manufacturer was able to prevent Israeli irrigation equipment from being marketed in Britain as ‘lego’).

Remedies 6.16 Typically, remedies for passing off include: • an injunction to restrain or prevent the passing off from continuing; • damages (including exemplary damages) or an account of profits; • delivery up or destruction of goods or materials that would breach the injunction; and/or • other related orders; for example, the transfer of a domain name. The prevailing view is that damages should only be awarded in passing off cases when the defendant has intentionally sought to deceive the public. It is important to note that remedies for passing off are awarded at the discretion of the court and are not an automatic entitlement.

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6.16C

Knott Investments Pty Ltd v Winnebago Industries Inc (2013) 299 ALR 74; 101 IPR 449; [2013] FCAFC 59 Facts: Winnebago Industries has manufactured and sold recreational vehicles (motor homes) in the US and other countries (but not Australia) since 1959. Knott Investments began selling such vehicles in Australia in 1978, using the same name (‘Winnebago’) and a similar logo. Winnebago became aware of Knott’s activities in 1985, but did not take any action until 1991. In 1992 the parties entered into a settlement agreement. The parties disagreed as to the meaning and effect of the settlement agreement. In 2010 Winnebago commenced proceedings in the Federal Court, alleging passing off and misleading conduct. At first instance, the court ordered an injunction to prevent Knott from using the Winnebago name in Australia. Knott appealed to the Full Federal Court. Decision: The court agreed with the trial judge on most substantive issues (ie, that Knott’s behaviour was misleading and that it amounted to passing off). However, the Full Court held that the injunction was ‘unreasonable and unjust’ given the fact that Winnebago had known that Knott had been using its name and logo since 1985, but had effectively taken no action for 25 years. In the circumstances, it was unfair to allow Winnebago to now trade off the reputation and goodwill that Knott had developed in Australia. As a consequence of its extraordinary delay, Winnebago was denied the remedies it sought.

48 (2000) 202 CLR 45; 169 ALR 677; [2000] HCA 12, see 6.30C. 49 [1983] FSR 155.

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Chapter 6: Passing Off and Unfair Trading Although Knott was permitted to continue using the name ‘Winnebago’, it was ordered to provide prominent disclaimers whenever its name or logo appeared (whether on a vehicle or a document) that it and its vehicles were not associated with the US Winnebago. FIGURE 6.1 THE POTENTIAL FOR SUCCESS OF A PASSING OFF ACTION

Does your trade designation have a reputation in the marketplace?

NO

YES Do you have goodwill in that reputation?

NO

YES Does the conduct of you and your competitor take place in the course of trade? YES

NO

Has your competitor made a misrepresentation?

NO

YES Does your competitor’s misrepresentation damage or potentially damage your reputation/goodwill?

NO

YES

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ACTION WILL LIE

NO ACTION WILL LIE

Misleading or Deceptive Conduct — Statutory Passing Off 6.17 With the passing by the Commonwealth government of the Trade Practices Act, a new form of protection for traders emerged. Although Pt V of the Act was inserted for reasons of consumer protection, in practice it has had a very broad application. The most-often used section in Pt V has been s 52. This section has now been replaced by s 18 of the Australian Consumer Law. Section 52 cases remain good authority for understanding the prohibition in s 18: see Workwear Industries Pty Ltd v Pacific Brands Workwear Group Pty Ltd.50 50 (2013) 104 IPR 1; [2013] FCA 1042.

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The elements of statutory passing off 6.18 The requirements necessary to establish a contravention of s 18 of the Australian Consumer Law are: • a person,51 • in trade or commerce, • must not engage in misleading or deceptive conduct, or conduct likely to mislead or deceive. The drafting of s 18 is in the same form as s 52, except for the reference to a ‘person’ (the s 52 prohibition was directed to a ‘corporation’). A ‘person’ includes a natural person and a legal person (a corporation). The phrase ‘trade or commerce’ is defined in s 2 of the Australian Consumer Law and includes any business or professional activity or conduct of a commercial character: see 9.16. Conduct which falls within the scope of s 18 may also contravene more specific prohibitions in the Australian Consumer Law, such as that against ‘false or misleading representations’ in s 29 (based on s 53 of the Trade Practices Act 1974).

The overlap between s 18 and passing off 6.19 Section 18 of the Australian Consumer Law has conferred benefits upon private traders wishing to protect their business goodwill and intellectual property which are very like those provided by the passing off action. The close relationship between the tort of passing off and the use of s 18 was explained by the High Court in Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre.52

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FIGURE 6.2 OVERLAP BETWEEN S 18 OF THE AUSTRALIAN CONSUMER LAW AND THE COMMON LAW

Section 18 (ACL) Prevents the deception of consumers in the course of trade This type of deception

Passing Off Prevents injury to goodwill caused by unfair practices of a trade rival

may produce

This type of injury

Legislation designed to prevent such deception will sometimes prevent such an injury

51 For constitutional reasons, the application of the Trade Practices Act was generally restricted to corporations. These constitutional limitations have now been overcome by the Australian Consumer Law — a single national law that is applied nationally and in each state and territory through the cooperation of the federal and state governments. 52 (1978) 140 CLR 216; 18 ALR 639; 1B IPR 818, see 6.27C1.

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Chapter 6: Passing Off and Unfair Trading

In practice, a trader bringing a case of this type to court will claim a breach of both the common law and s 18 of the Australian Consumer Law. In theory, the outcome of a dispute involving an alleged breach of s 18 and common law passing off should not necessarily be the same under both heads of the law. The common law passing off action is designed to prevent the misappropriation of a trader’s reputation, whereas s 18 is intended to prevent misleading conduct. The courts have consistently emphasised that the two actions are not identical:53 The backgrounds of s 52 [now s 18 of the Australian Consumer Law] and the law of passing off are quite different. Their respective purposes and the interests which they primarily protect are contrasting. Their areas of operation do not coincide. The indiscriminate importation into s 52 cases of principles and concepts involved in passing off … is likely to be productive of error and to give rise to arguments founded on false assumptions.

Despite such observations, if protecting a business reputation is involved, the questions raised in most cases are virtually the same (whether the argument is based on s 18 of the Australian Consumer Law or passing off):54 • Does the plaintiff have a distinctive reputation? • Has the relevant public been led into error (or is it likely to be deceived) by the defendant’s conduct? • Has the deception caused (or is it likely to cause) loss or damage to the plaintiff? This explains why, in reality, cases where the result is different under s 52 (now s 18) as compared to passing off, are very difficult to find. In fact, given that a misrepresentation must exist for passing off to be engaged in,55 this essentially requires that s 18 has been contravened (and often s 29 and s 151 as well).

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Advantages of statutory protection over the common law 6.20 There is an argument that the use of s 18 of the Australian Consumer Law offers several advantages compared to reliance on the common law passing off action. Realistically, in certain types of cases, it is even possible to suggest the lack of any need to rely upon the common law at all now in Australia, although the common law still has a greater potential to prevent certain forms of misappropriation (for

53 Taco Co of Australia Inc v Taco Bell Pty Ltd (1982) 42 ALR 177 at 199; (1982) ATPR 40-303, per Deane and Fitzgerald JJ, see 6.32C. 54 For an excellent discussion of this issue, see A Stewart, P Griffith, J Bannister and A Liberman, Intellectual Property in Australia, 5th ed, LexisNexis, Sydney, 2014, at [16.38]–[16.39]. 55 Even though the decision in Hogan v Koala Dundee Pty Ltd (1988) 83 ALR 187; 12 IPR 508 would suggest that a misrepresentation is not always required to establish passing off, there must be some doubt on this aspect of the case: see Stewart, Griffith, Bannister and Liberman, Intellectual Property in Australia, above n 54, at [16.27]; see 6.12.

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example, celebrity and character merchandising).56 Some of the advantages of reliance on the Australian Consumer Law are discussed below.

A. Reputation 6.21 The need to establish the existence of a reputation or goodwill is more critical under passing off, as this requirement underpins the passing off action. This is not the case under statute.57 The question is not whether an applicant has shown a sufficient reputation in a particular get-up or name. The question is whether the use of the particular getup or name by an alleged wrongdoer in relation to his product is likely to mislead or deceive persons familiar with the claimant’s product to believe that the two products are associated, having regard to the state of knowledge of consumers in Australia of the claimant’s product.

Thus, in some (admittedly rare) cases, a reputation may not even exist: see Peter Isaacson Publications Pty Ltd v Nationwide News Pty Ltd.58 However, if the allegation of misleading conduct is one that relates to the plaintiff’s reputation, which will usually be the case, it will be necessary to prove as a question of fact that the plaintiff does have a reputation.

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B. Misrepresentation 6.22 The need to prove that a misrepresentation has taken place is common to both actions. However, s 18 is infringed by conduct that is ‘likely to mislead or deceive’, meaning that it is unnecessary to prove that the conduct in question actually deceived or misled anyone, or that there was a strong probability of confusion,59 as is required at common law. Establishing that conduct is ‘likely’ to mislead is sufficient: Google Inc v ACCC.60 The court will apply an objective test in determining for itself whether conduct is misleading or likely to be so. That the burden may be less onerous under statute, is evidenced by Cricketer Ltd v Newspress Pty Ltd & David Syme & Co Ltd,61 when compared to Emap Elan Ltd v Pacific Publications Pty Ltd.62 Undoubtedly, the most significant advantage of using s 18 is that it can be relied on no matter what type of misrepresentation has been made. Thus, in some cases, a trader’s conduct may be deceptive (and thus breach s 18), even though it is not deceptive in the passing off sense. 56 57 58 59

See D Healy and A Terry, Misleading or Deceptive Conduct, CCH, Sydney, 1991 at pp 133–134. Cadbury Schweppes Pty Ltd v Darrell Lea Chocolate Shops Pty Ltd (2007) 159 FCR 359 at 419. (1984) 56 ALR 595; 3 IPR 255. This is the burden of proof in a quia timet action, where the applicant seeks an injunction to prevent some act (passing off) being done that has a ‘real prospect’ of causing damage. 60 (2013) 249 CLR 435; 294 ALR 404; 99 IPR 197; [2013] HCA 1, see 6.34C and 19.54C. 61 [1974] VR 477, see 6.5C2. 62 (1997) 37 IPR 1; (1997) ATPR 41-551; [1997] FCA 50, see 6.40C.

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Stuart Alexander and Co (Interstate) Pty Ltd v Blenders Pty Ltd (1981) 37 ALR 16163 Facts: Stuart Alexander marketed and advertised ‘Andronicus’ coffee in jars that were very similar to the distinctive apothecary jars which Blenders had been using for many years in marketing its ‘Moccona’ brand of coffee. A television advertisement produced by Stuart Alexander favourably compared the price of its coffee with the applicant’s brand of coffee. In the advertisement, in a reference to Moccona, the announcer said: ‘Some imported coffees come in a beautiful jar, but they cost the earth’, with emphasis on the word ‘imported’. Blenders sought an injunction to restrain the screening of the commercial and the supply of Andronicus coffee in the new jars and labels, on the grounds that the defendants were engaging in misleading conduct and making misleading statements under s 52 of the Trade Practices Act (now s 18 of the Australian Consumer Law) or alternatively were passing off its products as those of the plaintiff. Decision: An injunction to restrain the defendant from using the distinctive apothecary jars and labels was refused, on the grounds that the defendant had sufficiently differentiated its product from that of the applicant’s. The brand names ‘Moccona’ and ‘Andronicus’ were prominently displayed in each case and were printed in a different style and colour from each other.64 However, the applicant did succeed in a claim that the defendant’s television advertisement was misleading because it implied, contrary to fact, that the defendant’s ‘Andronicus’ brand coffee was not imported (implying that, as a result, it was less expensive than the applicant’s ‘Moccona’ brand).

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C. Damage 6.23 It is not a requirement to prove damage (in the sense of a misappropriation of reputation or goodwill) to bring an action under s 18 of the Australian Consumer Law.65 This means that a misrepresentation made at an early stage in a ‘statutory passing off’ type action, will not be remedied by arguing that customers did not ultimately end up buying the wrong product. It will be recalled that the lack of such evidence was the reason behind the dismissal of the common law passing off allegation in Cadbury Schweppes Pty Ltd v Pub Squash Co Pty Ltd,66 where damage, or the probability of damage, could not be demonstrated.67 (Note, however, that damages for breach of s 18 will only be available if actual damage can be demonstrated.) 63 Other aspects of this case are discussed at 10.27C3. For another example of this type of case, see Bently Fragrances Pty Ltd v GDR Consultants Pty Ltd (1985) 5 IPR 183; 11 FCR 29; (1985) ATPR 40-589, which was concerned with the misrepresentation of the quality of goods (perfumes). 64 Distinctive packaging can sometimes be protected: see John Haig and Co Ltd v Forth Blending Co Ltd (1953) 70 RPC 259. 65 Although of course this will be necessary if the applicant is seeking the remedy of damages or an account of profits on the basis of a passing off type of allegation. 66 [1980] 2 NSWLR 851; (1980) 32 ALR 387; [1981] 1 All ER 213, see 6.11C1. 67 See also Central Equity Ltd v Central Corporation Pty Ltd (1995) 32 IPR 481.

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6.22C

Marketing and the Law

Intention to mislead or deceive 6.24 Liability for contravention of s 18 of the Australian Consumer Law is strict: Google Inc v ACCC.68 The defendant’s intention or state of mind is irrelevant. A person may breach s 18 despite the fact that a statement or representation has been made honestly, innocently, and without any intention to actively mislead or deceive: Thai Silk Co Ltd v Aser Nominees Pty Ltd.69 A court will, nevertheless, more easily find a breach of s 18 where there is clear evidence of an intention to mislead or deceive, or where reckless indifference exists: Nylex Corporation Ltd v Sabco Ltd;70 Campomar Sociedad, Limitada v Nike International Ltd.71

Degree of differentiation required to avoid contravention of s 18 6.25 A defendant can successfully defend an alleged breach of s 18 of the Australian Consumer Law by establishing that its business or product has been sufficiently differentiated from that of the plaintiff. Clearly displaying a distinctive brand or business name on a product, even if the product itself has been copied or imitated, will usually result in the dismissal of any action brought against the defendant.

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TABLE 6.1 CASE LAW ON DIFFERENTIATION BETWEEN PRODUCTS IMITATED PRODUCT

CASE

Furniture

Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd72

Coffee jar

Stuart Alexander and Co (Interstate) Pty Ltd v Blenders Pty Ltd73

Confectionery

Mars Australia Pty Ltd v Sweet Rewards Pty Ltd74

Sports drinks

Nutrientwater Pty Ltd v Baco Pty Ltd75

Cookbook

Brock v Terrace Times Pty Ltd76

Fire place

Fire Nymph Products Pty Ltd v Jalco Pty Ltd77

Shelves

Marlbro Shelving Systems Pty Ltd v ARC Engineering Pty Ltd78

68 69 70 71 72 73 74 75 76 77 78

(2013) 249 CLR 435; 294 ALR 404; 99 IPR 197; [2013] HCA 1, see 6.34C and 19.54C. (1991) ATPR 41-146 at 53,089. (1987) ATPR 40-752 at 48,179 per Woodward J. (2000) 202 CLR 45; 169 ALR 677; [2000] HCA 12, see 6.30C. (1982) 149 CLR 1; 42 ALR 1; 1A IPR 684; (1982) ATPR 40-307, see 5.32C. (1981) 37 ALR 161, see 6.22C. (2009) 81 IPR 354; [2009] FCA 606, see 6.11C3. (2010) 265 ALR 140; 84 IPR 452; [2010] FCA 2. (1982) 40 ALR 97; 56 FLR 464. (1983) 47 ALR 355; 74 FLR 102; 1 IPR 79. (1983) 72 FLR 418; (1983) ATPR 40-355.

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Chapter 6: Passing Off and Unfair Trading TABLE 6.1 CASE LAW ON DIFFERENTIATION BETWEEN PRODUCTS — cont’d IMITATED PRODUCT

CASE

Garden hose

Nylex Corporation Ltd v Sabco Ltd79

Shampoo bottle

Freeman Cosmetic Corporation v Jenola Trial Pty Ltd (t/as South Pacific Cosmetics)80

Electric shaver

Koninklijke Philips Electronics NV v Remington Products Australia Pty Ltd81

Craft beer

Stone & Wood Group Pty Ltd v Intellectual Property Development Corporation Pty Ltd82

However, should a similar brand name or business name be utilised in conjunction with a similar ‘get-up’, the line between permissible imitation and passing off is likely to be overstepped: see examples given in Mars Australia Pty Ltd v Sweet Rewards Pty Ltd.83

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TABLE 6.2 CASE LAW ON SIMILARITIES IN MARKETING IMITATED PRODUCT

CASE

Potato chips

Kettle Chip Co Pty Ltd v Apand Pty Ltd84

Disinfectant

Sterling Winthrop Pty Ltd v R & C Products Pty Ltd85

Pine log garden edging

Bedford Industries Rehabilitation Association Inc v Pinefair Pty Ltd & Porter86

Florist services

Roses Only & Lush Pty Ltd v Mark Lyons Pty Ltd87

Energy drink

Sydneywide Distributors Pty Ltd v Red Bull Australia Pty Ltd88

Magazine

Pacific Publications Pty Ltd v IPC Media Pty Ltd89

Use of a disclaimer to avoid a contravention of s 18 6.26 A disclaimer may be potentially effective by eliminating confusion. An effective disclaimer will prevent liability from arising under s 18 of the Australian 79 80 81 82 83 84 85 86 87 88 89

(1987) ATPR 40-752. (1993) ATPR 41-270. (2000) 177 ALR 167; 48 IPR 257; [2000] FCA 876. (2018) 357 ALR 15; [2018] FCAFC 29, see 6.11C4. (2009) 81 IPR 354; [2009] FCA 606, see 6.11C3. (1993) 119 ALR 156; 27 IPR 321; (1994) ATPR 41-287; [1993] FCA 819, see 6.31C. (1994) ATPR 41-308. (1996) ATPR 41-448. (1999) 47 IPR 593; [1999] FCA 1000. (2002) 55 IPR 354; [2002] FCAFC 157, see 6.11C2. (2003) 57 IPR 28; [2003] FCA 104.

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Consumer Law by communicating information to a consumer so that he or she is not misled or deceived. A disclaimer must be brought clearly to the attention of the parties concerned and must contain provisions that are clear, prominent, and unambiguous. In practice, it will often be difficult to meet such criteria, as already illustrated by Totalizator Agency Board v Turf News Pty Ltd90 and the Children’s Television Workshop Inc v Woolworths (NSW) Ltd.91 However, there have been cases where a disclaimer has been effectively used to avoid breaching the law.

6.26C

Sony Music Australia Ltd v Tansing (t/as Apple House Music) (1993) 27 IPR 649; (1993) ATPR 41-279 Facts: Sony owned the exclusive rights to Michael Jackson’s recordings. Tansing, trading as Apple House, announced that it would release three ‘bootleg’ albums of Michael Jackson songs. These albums were recorded live without authority at various Michael Jackson concerts in Europe. Apple House planned to put a number of disclaimers on its album cover. At the top across the full width of the label would appear the words: ‘THE UNAUTHORISED RECORDINGS’. At the bottom, the words: ‘THE SOUND RECORDING MAY NOT BE OF THE SAME QUALITY AS AN AUTHORISED RELEASE’. In the middle would be a picture of Michael Jackson and running vertically across the picture in block red capitals the word ‘UNAUTHORISED’. Sony sued for breach of s 52 of the Trade Practices Act (now s 18 of the Australian Consumer Law) and passing off. Decision: The Federal Court refused an interim injunction on the basis that it was highly unlikely that any breach had occurred. Einfeld J said:

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[I]t seems to me on the evidence presently presented, it would be an extremely stupid young member of the public who, upon being confronted by this recording, would come to the conclusion that it was a production which Michael Jackson had authorised, that it was a production of Michael Jackson’s record company or some other associated organisation, and that the quality of the recording was one of which Michael Jackson would or does approve or with which he would wish or be proud to be associated.

Preventing other traders from using descriptive words or material 6.27 As is the case at common law, a plaintiff seeking to protect trade designations, especially words, must establish that such designations are distinctive of the business or product to which they are attached, or in other words that they are exclusively associated with the plaintiff in the minds of customers or potential customers. This will be difficult to establish in cases where a trader uses descriptive words in connection with a product or business. For example, if a name is chosen by a trader which is merely descriptive of a particular type of business, its use by others who carry on that same type of business will not be deceptive or misleading. 90 [1967] VR 605, see 6.13C. 91 [1981] 1 NSWLR 273; (1980) 1B IPR 609, see 6.14C.

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Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre (1978) 140 CLR 216; 140 CLR 216; 1B IPR 818 Facts: The plaintiff had carried on business in Sydney for over 20 years under the name Sydney Building Information Centre, the business being essentially the setting up of a display centre for various building materials to be inspected by interested buyers.

6.27C1

The defendant set up a similar business located in Hornsby (on the outskirts of Sydney) and adopted the name Hornsby Building Information Centre. The plaintiff alleged that the defendant, by trading under a similar name, was engaging in conduct which would result in the public confusing the two businesses, such that the public would be misled or deceived within the meaning of s 52 of the Trade Practices Act (now s 18 of the Australian Consumer Law). Decision: The defendant had not engaged in misleading or deceptive conduct in breach of s 52. There was no likelihood of any misconception as to the existence of a business connection between the Hornsby Building Information Centre and the Sydney Building Information Centre. The plaintiff had chosen to use descriptive words (Building Information Centre) in its business name and could not complain if a competitor set up a similar business using the same form of words, provided there was an attempt to differentiate the two businesses. This requirement was met by the defendant’s addition of a geographical prefix (Hornsby) to the descriptive words.

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Using descriptive words to describe the nature of the service offered would also not usually be protectable. In Communication Credit Union Ltd v National Westminster Finance Australia Ltd,92 it was held that the name ‘Phone-A-Loan’ was not distinctive of the applicant’s facility, in that it merely described a means of doing business; that is, making an application for a loan by telephone. Words that describe a product, in a generic sense, can also be used by any other trader,93 and cannot be monopolised by one trader. Simplot Australia Pty Ltd v McCain Foods (Aust) Pty Ltd (2001) 52 IPR 539; [2001] FCA 518 Facts: Simplot marketed Birds Eye ‘Hash Browns Crunchy Triangles’, a potato-based product. It sought an injunction to stop McCain from manufacturing, supplying, promoting, or selling any hash brown product using the name ‘Hash Brown Triangles’, relying on s 52 of the Trade Practices Act (now s 18 of the Australian Consumer Law) and passing off. Decision: Simplot did not have any goodwill or reputation in the trade description ‘Hash Brown Triangles’. The very descriptiveness of such words meant it could not be distinctive of Simplot’s product, and hence its use on other like products by competitors would not ordinarily mislead the public. A plaintiff that uses descriptive words in its trade names will find that quite small differences in a competitor’s trade name will render the latter immune from action. An injunction was refused because of the prominence of the ‘Birds Eye’ and ‘McCain’ trade marks and other significant differences in the packaging of the products.

92 (1983) 51 ALR 375; 1 IPR 507; (1983) ATPR 40-410. 93 See Comité Interprofessional du Vin de Champagne v N L Burton Pty Ltd (1981) 38 ALR 664; (1981) ATPR 40-258; (1982) 1 TPR 128.

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Marketing and the Law

However, there are cases where the plaintiff has been able to establish that apparently descriptive words have acquired, among members of the public, a secondary meaning which is distinctive of its goods or business.

6.27C3

Abundant Earth Pty Ltd v R & C Products Pty Ltd (1985) 59 ALR 211; 4 IPR 387; (1985) ATPR 40-53294 Facts: R & C Products produced a successful product called ‘Pure and Simple’ (a vegetable oil) which was used in cooking. The product was widely sold through supermarkets. R & C Products was planning to launch a range of products under the ‘Pure and Simple’ name, including a prepared mustard. Abundant Earth produced a health food mustard called ‘Pure and Simple’, which was sold in health food shops as well as in the specialty sections of some supermarkets. R & C sought an injunction for a breach of s 52 of the Trade Practices Act (now s 18 of the Australian Consumer Law). Decision: A breach had occurred. In reaching this conclusion the court was influenced by a number of factors: • Although there was no strict common field of activity the products were closely related and had similar customers. • Both products highlighted the name ‘Pure and Simple’. • Both products were inexpensive food items containing natural ingredients. • Although the name was descriptive, it had become widely associated with R & C. • There was no adequate disclaimer which was important with this type of relatively cheap product where the emphasis was on selling without the customer doing much individual work. The court awarded an injunction.

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REA Group Ltd v Real Estate 1 Ltd (2013) 102 IPR 1; [2013] FCA 559 6.27C4

Facts: REA operates the online real estate businesses, realestate.com.au and realcommercial. com.au. Real Estate 1 began operating an online real estate business as realestate1.com.au and realcommercial1.com.au. REA commenced proceedings for misleading or deceptive conduct, passing off, and trade mark infringement. Decision: REA established that the term ‘realestate.com.au’ had acquired a secondary meaning. In other words, it developed a reputation in the name in a way that distinguished REA from other online real estate websites. It was found that Real Estate 1 had a deliberate strategy to trade off REA’s reputation (a ‘naïve business strategy’). However, Bromberg J held that since ‘real estate’ is so descriptive, even a very small difference (the addition of the number ‘1’) was enough to allay consumer confusion. Further, it was unlikely that consumers would be misled or deceived because, when they came across ‘realestate1.com. au’ in search results, it would appear much lower down in the search ranking than ‘realestate. com.au’. Finally, Bromberg J held that a consumer would immediately recognise his or her 94 See also Opals Australia Pty Ltd v Opal Australiana Pty Ltd (1993) ATPR 41-264.

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Chapter 6: Passing Off and Unfair Trading error if he or she clicked on ‘realestate1.com.au’ by mistake. The passing off and misleading or deceptive conduct claims were unsuccessful. The trade mark infringement claim was successful.

Clearly it is not easy to draw a line between a descriptive and non-descriptive (distinctive) name, but there is a distinction.95 The reality is that there is a continuum with at the extremes purely descriptive names at one end, completely invented names at the other and in between names that contain ordinary English words that are in some way or other at least partly descriptive. The further along the continuum towards the fancy names one goes, the easier it will be for a plaintiff to establish that the words used are not descriptive of the plaintiff’s business. The closer along the continuum one moves towards a merely descriptive name the more a plaintiff will need to show that the name has obtained a secondary meaning, equating it with the products of the plaintiff (if the name admits of this — a purely descriptive name probably will not) and the easier it will be to see a small difference in names as adequate to avoid confusion.

Marketers would do well to heed the comments of Stewart, Griffith, Bannister and Liberman, who consider that the cases on descriptive words boil down to a common sense proposition:96 [T]he use of descriptive terms, while carrying advantages in terms of making the product or business self-explanatory, has the corresponding disadvantage that it will require more effort than would be the case with non-descriptive terms to establish a public perception of the plaintiff as the distinctive source of the product or business so described.

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Remedies 6.28 A range of remedies is available for a contravention of s 18 of the Australian Consumer Law: • an injunction to restrain a contravention, or conduct which amounts to aiding, abetting, inducing, or being knowingly concerned in such a contravention: Australian Consumer Law s 80; • damages for any loss or damage suffered as a result of a contravention: Australian Consumer Law s 82; • any other order considered appropriate by the court, such as an account of profits: Australian Consumer Law s 87. In determining the proper measure of compensation, the common law principles which apply to an action in passing off are often used: Gates v City Mutual Life 95 Equity Access Pty Ltd v Westpac Banking Corp (1989) 16 IPR 431; (1990) ATPR 40-994 at 50,956 per Hill J. 96 Stewart, Griffith, Bannister and Liberman, Intellectual Property in Australia, above n 54, at [17.5].

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Assurance Society Ltd.97 However, it will be recalled that at common law an award of damages can be dependent upon the contravention being intentional, which is not a relevant factor with regard to an award of damages under s 18. Further, an award of damages (or an account of profits) does not require proof of loss or damage to ‘goodwill’, simply compensable loss or damage per se. FIGURE 6.3 POTENTIAL STATUTORY PROTECTION UNDER S 18 OF THE AUSTRALIAN CONSUMER LAW

Has a competitor made a representation?

NO

YES Has the representation been made in the course of trade or commerce?

NO

YES Is the representation likely to deceive or mislead a significant number of ordinary consumers? YES

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ACTION WILL LIE

NO

NO ACTION WILL LIE

Types of Passing Off — Common Law and Statutory 6.29 Misrepresentation amounting to passing off at common law and under statute can take many different forms. An illustrative set of case examples is referred to below. The majority of cases involve allegations of both passing off and breach of the Australian Consumer Law.

Brand names 6.30 A trader providing goods or services in the marketplace will usually identify his or her product by a brand name, and perhaps the most fundamental form of protection provided by the passing off action is to protect such brand names.98

97 (1986) 160 CLR 1; 63 ALR 600; 6 IPR 462; (1986) ATPR 40-666. 98 See also Helena Rubinstein v Von Bronneck (1943) 43 SR (NSW) 283; 60 WN (NSW) 117.

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Campomar Sociedad, Limitada v Nike International Ltd (2000) 202 CLR 45; 169 ALR 677; [2000] HCA 1299 Facts: The Nike group of companies had built up a significant reputation for the manufacture and distribution of athletic footwear and sports clothing distinguished by the NIKE mark in Australia. The defendant had registered the word ‘Nike’ as a trade mark for perfumes and essences, and had commenced marketing Nike Sports Fragrance in Australia. Nike alleged that the use by the defendant of the word ‘Nike’ amounted to passing off and would mislead or deceive consumers into wrongly associating the products of the two businesses in breach of s 52 of the Trade Practices Act (now s 18 of the Australian Consumer Law). It sought an injunction to prevent the defendant from using the word Nike.

6.30C

Decision: The defendant’s product had a get-up prominently featuring the expression ‘NIKE Sports Fragrance’, with the first word appearing in significantly larger print than the other words. The product was sold in pharmacies in the same area as other products marketed as sports fragrances, including one produced by Adidas, a competitor of Nike International. As such, the public was likely to be misled or deceived into thinking that NIKE Sports Fragrance was in some way promoted or distributed by Nike International, or with its consent and approval. An injunction was granted restraining the defendant from marketing NIKE Sports Fragrance in Australia. (The defendant’s trade mark registration was not cancelled, as the court concluded that the defendant might still be able to use the mark on some products in a way that would not infringe the Trade Marks Act or the Trade Practices Act or amount to passing off.)

‘Get-up’ or packaging of products

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6.31 The distinctive appearance of a product as it is offered in the marketplace can be protected by a passing off action. Kettle Chip Co Pty Ltd v Apand Pty Ltd (1993) 119 ALR 156; 27 IPR 321; (1994) ATPR 41-287; [1993] FCA 819 Facts: Apand was the largest manufacturer of potato chips in Australia. It marketed its products under the name ‘Smith’s’. The Kettle Chip Co entered the market with a chip called ‘The Kettle Chip’. The chips were cooked in small batches and had a distinctive flavour and texture. The chips were marketed in distinctive shiny foil packaging under a get-up featuring a stylised steaming cauldron in which chips were cooking, a colour scheme making bold use of gold and deep blue, and the words ‘The Kettle Chip’ in large letters. The product was distributed through outlets such as milk bars at a premium price and with very little promotion. The product was very successful and within a relatively short time had captured about 5% of the potato chip market. Apand responded by bringing out a new line of chips closely resembling The Kettle Chip. Although the product was mass-produced in continuous fryers, it nevertheless closely imitated The Kettle Chip. The new chips were sold in packaging that was identical in size and material and it included all the elements of The Kettle Chip packaging in terms of colour scheme, graphic images, key words, and type-face. The defendant’s packaging was dominated by the

99 See also R & C Products Pty Ltd v Hunters Products Pty Ltd (1988) ATPR 40-839.

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6.31C

Marketing and the Law words ‘Country Kettle’ in large capital letters. By contrast, the defendant’s trade mark ‘Smith’s’ device was less prominent.

The Kettle Chip Co sought an injunction and damages, or an account of profits, in respect of alleged misleading or deceptive conduct in contravention of s 52 of the Trade Practices Act (now s 18 of the Australian Consumer Law) and for passing off. Decision: The defendant had too closely imitated the name, symbols, and get-up. Taken together, the symbols, the colours used on the packaging, and the word ‘Kettle’ were so overwhelming that for many customers the differences between the get-up of the two products was insufficient, given that most customers have imperfect memories. Furthermore, the word ‘Kettle’ was not descriptive of a type of potato chip in Australia. A significant proportion of the relevant public perceived ‘Kettle’ as the brand of the potato chips. The defendant, by deliberately subordinating its name of ‘Smith’s’ in favour of the word ‘Kettle’, had engaged in conduct likely to mislead or deceive a significant number of persons in the marketplace.

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An injunction was granted. In a later hearing, $4,057,386 was awarded based on an account of profits made by the defendant in connection with the use and sale of the Country Kettle brand name: Kettle Chip Co Pty Ltd v Apand Pty Ltd.100 The sum was made up of a trading profit ($655,000); a portion of the capital profit attributed to the brand name Country Kettle made on the sale of the businesses ($1,870,800); and interest on these amounts. An appeal against this order was dismissed by the Full Federal Court in Apand Pty Ltd v Kettle Chip Co Pty Ltd (No 2).101

Although the injunction was granted in Kettle Chip Co Pty Ltd v Apand Pty Ltd,102 ‘passing off is not made out merely by demonstrating that the rival manufacturer is found to have copied the features of its rival’s product’: Peter Bodum A/S v DKSH Australia Pty Ltd.103 One aspect usually associated with packaging that has received some publicity in recent times is colour. Colour recognition or attraction can play an important part in consumer decisions to purchase products. This is the reason behind a long-running

100 (1998) 155 ALR 134; 40 IPR 481; [1998] FCA 586. 101 (1999) 162 ALR 505; 43 IPR 225; [1999] FCA 483. 102 (1993) 119 ALR 156; 27 IPR 321; (1994) ATPR 41-287; [1993] FCA 819, see 6.31C. 103 (2011) 280 ALR 639; 92 IPR 222; [2011] FCAFC 98.

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Chapter 6: Passing Off and Unfair Trading

battle by Cadbury to claim ‘ownership’ in the colour purple, a prominent feature in the packaging and advertising of the Cadbury brand of chocolate. In 2003 Cadbury initiated proceedings against Darrell Lea,104 alleging that the defendant had engaged in misleading or deceptive conduct and passing off by using a shade of dark purple on some of its chocolate products that closely resembled its own ‘Cadbury Purple’. In 2006, Heerey J of the Federal Court dismissed Cadbury’s claim, declaring that Cadbury did not own the colour purple and did not have an exclusive reputation in purple in connection with chocolate. Darrell Lea was entitled to use purple, or any other colour, as long as it did not convey to the reasonable consumer the idea that it or its products had some connection with Cadbury: Cadbury Schweppes Pty Ltd v Darrell Lea Chocolate Shops Pty Ltd (No 4).105 Cadbury appealed this decision on the basis that the judge was incorrect in refusing to admit evidence from marketing experts regarding the importance of colour in marketing and sales activities. In 2007, the Full Court upheld Cadbury’s appeal and the case was remitted back to the original trial judge for a rehearing.106 However, even after the expert evidence was presented, Heerey J could see no reason for departing from his original finding. The judge observed that conduct which results in mere confusion or consumers being ‘caused to wonder’ does not amount to misleading or deceptive conduct.107 In this case, the evidence established that consumers knew that the colour purple was connected with a number of chocolate brands; that Darrell Lea uses its name in a distinctive script widely and consistently in marketing, packaging, and point of sale presentation; and that consumers seeing chocolate products in purple wrapping in a Darrell Lea shop would not be misled into thinking it was a Cadbury product. The names Darrell Lea and Cadbury are quite distinct in sound and appearance. In reaching his overall decision, the judge thought it important that it was established that consumers were never presented at the point of sale with Cadbury’s products (whether incorporating use of the colour purple in the packaging or otherwise), without the name Cadbury being prominently displayed: Cadbury Schweppes Pty Ltd v Darrell Lea Chocolate Shops Pty Ltd (No 8).108

Business and company names 6.32 A business or company name well established in the marketplace, like a brand name, is clearly protectable using the laws of passing off.109 104 Cadbury Schweppes Pty Ltd v Darrell Lea Chocolate Shops Pty Ltd (No 4) (2006) 229 ALR 136; 69 IPR 23. 105 (2006) 229 ALR 136; 69 IPR 23. 106 Cadbury Schweppes Pty Ltd v Darrell Lea Chocolate Shops Pty Ltd (No 8) [2008] FCA 470. 107 In Google Inc v ACCC (2013) 249 CLR 435; 294 ALR 404; 99 IPR 197; [2013] HCA 1, see 6.34C and 19.54C, the High Court (majority judgment) said ‘conduct causing confusion and wonderment is not necessarily coextensive with misleading and deceptive conduct’. 108 (2008) 75 IPR 557; (2008) ATPR 42-229; [2008] FCA 470. 109 See 7.70–7.75 for an outline of the business and company name registration process, and the lack of protection these procedures provide.

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Taco Co of Australia Inc v Taco Bell Pty Ltd (1982) 42 ALR 177; (1982) ATPR 40-303 6.32C

Facts: Taco Bell Pty Ltd was an Australian company which had been operating a Mexican restaurant called ‘Taco Bell’s Casa’ in the Sydney suburb of Bondi since before 1977. The restaurant offered primarily inexpensive meals to patrons who wished to be served by a waiter. The restaurant also operated a take-away service. Taco Co was an American company which operated a chain of well-known Mexican restaurants throughout the US and Canada. These restaurants were all designed in the same way and all named ‘Taco Bell’. There was no waiter service and most customers used the restaurant as a take-away. In 1981 a subsidiary of the US company opened two restaurants in Sydney — one in the city centre and the other in the western suburbs — and called them ‘Taco Bell’. Both restaurants largely followed the distinctive pattern of the US restaurants. The US company had previously approached the Australian company to see if it would sell the name Taco Bell, but the Australian company refused. Both parties sought an injunction relying on s 52 of the Trade Practices Act (now s 18 of the Australian Consumer Law) and the tort of passing off. Decision: The court decided in favour of the Australian company on the grounds of both a breach of s 52 of the Trade Practices Act and the tort of passing off. Having regard to the reputation built up by the Australian company throughout Sydney, the actions of the US company would mislead members of the relevant section of the public to conclude that the new Taco Bell restaurants were connected in some way with the Bondi restaurant of the same name. An injunction covering Sydney was granted.

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Internet domain names 6.33 If a person registers a domain name110 and uses that domain name to identify an active website in such a way as to mislead members of the public into believing that the user is associated with some other entity, there will usually be an actionable passing off involved.111 This area of the law is discussed at 19.60–19.66. A person who connects to a website that resembles the name of a well-known business or brand may conclude that the user must be connected or associated with the well-known business or brand. Some of these disputes will be resolved by the domain name dispute resolution process now operating in Australia,112 whereas others will end up before the courts.

110 See 7.76 and 19.60 for details of this process. 111 It should be noted, however, that the ability of a court to deal with passing off issues might be a problem when the domain name user is located in, and the domain name is registered in, another jurisdiction. Unless the user is conducting business in Australia, it will be essential for the claimant to establish that the domain name user is operating in a jurisdiction which recognises passing off, and that the claimant has a reputation in the relevant jurisdiction. Furthermore, the use of a disclaimer by the domain name user making it clear that the user has no connection with the claimant might also ensure that no actionable misrepresentation has taken place. For a successful action using the Trade Practices Act 1974, see ACCC v Chen (2003) 201 ALR 40; (2003) ATPR 41-948; [2003] FCA 897. 112 See details at 19.62–19.63.

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Architects (Australia) Pty Ltd v Witty Consultants Pty Ltd [2002] QSC 139 Facts: The plaintiff traded as Architects Australia and had conducted a successful architectural practice in Brisbane for over 20 years. In 2000 the defendant applied to register the internet domain name ‘architectsaustralia.com.au’, and this was granted in 2001. The name was used to promote and develop an internet-based directory advertising the services of architects throughout Australia and the world. Listed architects paid the defendant an annual registration fee. The defendant claimed to be unaware of the plaintiff’s business when it registered the domain name. The plaintiff claimed the defendant had engaged in conduct that was misleading and deceptive (or likely to be so) in breach of s 52 of the Trade Practices Act (now s 18 of the Australian Consumer Law) and that the similarity between its trading name and the defendant’s domain name was sufficient to support an action for passing off. Decision: The defendant had breached s 52 and had engaged in passing off. The plaintiff had established a reputation under the name ‘Architects Australia’ that was recognised in the market for architectural services. Although the words had a descriptive element, they had become distinctive of the plaintiff’s business. There was no significant difference between the trading name, Architects Australia, and the domain name, architectsaustralia.com.au. The suffix ‘com.au’ did no more than indicate that it was an internet site. A potential customer knowing the plaintiff’s trading name could be misled by the defendant’s domain name into thinking that the plaintiff could be contacted on the internet. Upon accessing the website, a customer would find many other architects listed who provided similar services to the plaintiff, thus leading customers to confuse the two businesses in a passing off sense. Similarly, there was a substantial risk that consumers of architectural services would be confused as to the identity of the defendant and the nature of its services. The conduct of the defendant therefore amounted to misleading and deceptive conduct.

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The defendant was ordered to de-register its domain name.

Most passing off disputes in recent times have been between domain name pirates (variously described as cyberpirates, cyberjackers, or cybersquatters) and businesses who claim to be entitled to use a domain name that has been registered by one of these pirates.113 Usually, the pirate registers a domain name that duplicates or in some way resembles the trading name or trade mark of a business, and then offers the domain name for sale to that business. Celebrities in the entertainment and sporting field have also been victim to this practice. The problem with bringing an action against domain name pirates is that they do not usually make actual use of the domain names. The websites remain passive. The domain names are simply offered for sale to the party most likely to be associated with the name by consumers. In such circumstances, the question is whether there is a misrepresentation to consumers that is likely to cause damage to the goodwill of the claimant as required for the tort of passing off.

113 See D Osborne, ‘Domain Names, Registration and Dispute Resolution and Recent UK Cases’ [1997] 11 EIPR 644 and R Meyer-Rochow, ‘Passing Off as a Remedy against Domain Name Piracy’ [1998] EIPR 405.

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Marketing and the Law

Marks & Spencer Plc v One In A Million Ltd (1997) 42 IPR 309; [1998] FSR 265114 6.33C2

Facts: The defendant, One In A Million Ltd, registered and sold domain names. It successfully registered domain names that included the names of some very well-known UK businesses, namely ‘virgin’, ‘ladbrokes’, ‘sainsburys’, ‘marksandspencers’, and ‘britishtelecom’. The companies claiming the rights to these names brought a consolidated action against the defendant alleging passing off (and trade mark infringement), and seeking an order that the names be delivered up (transferred) to the ‘rightful owners’. The defendant argued that there could be no passing off when there had been no commercial use of these names, there being no misrepresentation in such circumstances, and thus no damage or risk of damage to the plaintiffs’ reputation or goodwill. Decision: The defendant engaged in passing off. The defendant had a deliberate and longestablished practice of registering domain names that were chosen to resemble the names and marks of other people because of the goodwill attached to those names. The motive of the defendant was to use that goodwill, and threaten to sell it to another who might use it for passing off, to obtain money from persons such as the plaintiffs. The value of the names lay in the threat that they would be used in a fraudulent way. Those who put, or authorise someone to put, an ‘instrument of deception’ into the hands of others, commit the tort of passing off. A name that will, by reason of its similarity to the name of another, inherently lead to passing off if used, is such an instrument. The plaintiffs were held to be entitled to the domain names that had been registered by the defendant.

In CSR Ltd v Resource Capital Australia Pty Ltd,115 the Federal Court in Australia noted the Marks & Spencer Plc v One In A Million Ltd decision with approval, but based its decision on s 52 of the Trade Practices Act (now s 18 of the Australian Consumer Law), rather than the common law.

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CSR Ltd v Resource Capital Australia Pty Ltd (2003) ATPR 41-929; [2003] FCA 279 6.33C3

Facts: CSR Ltd was mainly involved in refining and selling sugar and sugar by-products and was one of the largest sugar millers in the world. It had registered ‘CSR’ and ‘CSR Sugar’ as trade marks, and had registered ‘www.csr.com.au’ as a domain name. The defendant registered the business name ‘CSR Sugar Supply’ in 2001, and on the same day registered the domain names ‘csrsugar.com’ and ‘csrsugar.com.au’. It later sent a letter to CSR Ltd offering to sell a certain domain name for upwards of $25,000. CSR Ltd refused the offer and responded by asserting its right to the two CSR domain names. It eventually took the issue to court, alleging a breach of s 52 of the Trade Practices Act. It argued that, by registering the two domain names, the defendant had implied that the domain names were being registered on behalf of CSR, or that the defendant was in some way connected with CSR. Decision: The defendant had engaged in cybersquatting in breach of s 52 of the Trade Practices Act (now s 18 of the Australian Consumer Law). A person seeing these domain names would assume that CSR was the real owner and entitled to use them for its purposes on the internet in connection with its sugar businesses. The act of the defendant in obtaining registration of

114 See also 19.65C. 115 (2003) ATPR 41-929; [2003] FCA 279, see 6.33C3.

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Chapter 6: Passing Off and Unfair Trading both domain names constituted conduct that was misleading and deceptive in breach of s 52, or alternatively constituted a representation that CSR and the defendant were affiliated when they were not. The defendant was ordered to transfer the two domain names to the applicant.

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(The court expressed doubt that the defendant had infringed the applicant’s trade marks, as it had not ‘used’ them as a trade mark, but found it unnecessary to determine the issue.)

As the internet is global, and not limited by geographic boundaries, so the protection offered by s 18 will extend to misleading domain names and websites operated in other countries. Mr Chen, a resident of New York in the United States, operated a website www.sydneyopera.org from servers based in the United States, which claimed to provide tourists with the opportunity to purchase tickets to events at the Sydney Opera House. In ACCC v Chen116 the regulator claimed that several consumers from the United Kingdom and Europe tried to buy tickets through this imitation site. Their credit cards were charged, but they were either overcharged or did not receive the tickets. The court granted both declaratory relief and an injunction to stop the infringing website from operating. This case raises interesting questions about international cooperation in enforcement of what is truly an international issue. The court was aware that even though the injunction itself could not be enforced in US courts, there would be cooperation from US agencies such as the Federal Trade Commission. An international agency exists, International Consumer Protection and Enforcement Network (ICPEN),117 to promote cooperation and enforcement worldwide. More than 30 countries are members, including Australia through the ACCC. The other common scenario likely to be played out is where two businesses each claim a legitimate interest in the same second level domain name, which each has registered in different top level domains (for example, one trader has a ‘.com’ registration and the other a ‘.com.au’ registration). How are such disputes to be resolved? This type of dispute occurred in Sydney Markets Ltd v Sydney Flower Market Pty Ltd.118 Sydney Markets Ltd v Sydney Flower Market Pty Ltd [2002] FCA 124 Facts: Sydney Markets Ltd and Sydney Flower Market Pty Ltd had each registered domain names incorporating the words ‘Sydney Flower Market’. One had a website address at www. sydneyflowermarket.com, and the other at www.sydneyflowermarket.com.au. Each company sought an injunction to stop the other using a domain name that it regarded as deceptively similar to its own.

116 [2003] FCA 897. 117 See further their website at . 118 [2002] FCA 124.

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Marketing and the Law Decision: The Federal Court found that neither party was entitled to the exclusive use of the words ‘Sydney Flower Market’, although the court acknowledged that the concurrent use of the domain names had the potential to mislead sections of the public. The solution was to order each company to place on its website a prominent and appropriately worded disclaimer indicating that it had no connection with the business conducted by the other. The court acknowledged that, while the use of disclaimers on products was often insufficient to avoid confusion, different considerations apply in the case of websites, where appropriately worded disclaimers can be used effectively to overcome potential confusion.

Keyword advertising 6.34 Keyword advertising can also give rise to passing off or misleading conduct. When search engines (such as Google) display results in response to a search, they provide a list of organic results which are displayed for free based on the search engine’s relevancy algorithm. The search engines also display keyword advertisements (such as sponsored links) usually at the top of the results list or on the side in return for payment of a fee from the advertiser. Google’s ‘AdWords’ product was the subject of a recent long-running dispute.

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6.34C

Google Inc v ACCC (2013) 249 CLR 435; 294 ALR 404; 99 IPR 197; [2013] HCA 1119 Facts: Google operates a well-known internet search engine. Part of its business includes the sale of ‘sponsored links’ to advertisers. During 2005 and 2008, the Australian Competition and Consumer Commission (ACCC) claimed that certain search results were misleading and deceptive in breach of s 52 of the Trade Practices Act (now s 18 of the Australian Consumer Law). For example, Trading Post, a classifieds business, purchased ‘Kloster Ford’ from Google’s AdWords program. As a consequence, when someone searched ‘Kloster Ford’ in the Google search engine, the results would include a sponsored link to the Trading Post website with the headline ‘Kloster Ford’. In ACCC v Trading Post Australia Pty Ltd,120 it was held that this (falsely) implied an association between the Kloster Ford car dealer and Trading Post and that information regarding Kloster Ford could be found at the Trading Post website. This purchase was held to be misleading or deceptive conduct in contravention of ss 52 and 53 of the Trade Practices Act (now ss 18 and 29 of the Australian Consumer Law). The ACCC also alleged that Google had engaged in misleading or deceptive conduct by publishing the misleading sponsored links. The ACCC claimed that Google had engaged in misleading or deceptive conduct by failing to distinguish between organic search results and sponsored links. Google argued that:121

119 See also 19.54C. 120 [2011] FCA 1086. 121 At [65]–[66].

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Chapter 6: Passing Off and Unfair Trading [T]he fact that [Google] displayed the sponsored links in response to users’ search requests was not sufficient to justify a finding that Google had itself made the misleading representations conveyed by the sponsored links, or otherwise engaged in misleading and deceptive conduct. Google emphasised that each relevant aspect of a sponsored link — the headline, the advertising text, the advertiser’s URL, the keywords and the use of keyword insertion — was specified by the advertiser, and that Google merely implemented the advertiser’s instructions. Google further contended that any commercial association or affiliation between an advertiser and another trader was something peculiarly within the knowledge of the advertiser, and was not a matter within Google’s expertise. Decision: At first instance, Nicholas J122 found that: [O]rdinary and reasonable users of the Google search engine would have understood that the sponsored links were advertisements paid for by advertisers to promote their products and businesses, and that Google was merely passing them on. The ACCC successfully appealed to the Full Court. Google was granted special leave to appeal to the High Court. The High Court unanimously found in favour of Google, allowing the appeal. Google ‘did not itself engage in misleading or deceptive conduct, or endorse or adopt the representations which it displayed on behalf of advertisers’.123 Heydon J124 explained that there is no basis upon which it could be concluded that ordinary and reasonable members of the relevant class would have regarded Google as adopting the advertisements:125

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The ACCC’s submission boiled down to the proposition that Google had made misrepresentations in the impugned sponsored links because the content of those sponsored links was responsive to the user’s query through Google’s AdWords program. If that proposition were sound, that submission would mean that Google would be liable unless it could discharge the burden of proving that it had no reason to suspect that an advertisement was in contravention of the TPA … That is an unacceptably extreme submission.

Search engine optimisation 6.35 Search engine optimisation is an important tool to help your name appear above the name of your competitors in internet searches. This can give rise to issues of passing off and misleading and deceptive conduct. Lift Shop Pty Ltd v Easy Living Home Elevators Pty Ltd [2013] FCA 900 Facts: Lift Shop and Easy Living both supply elevators and lifts for the home market and both competitors rely heavily on online advertising. Easy Living employed a search engine optimisation agency to tailor its website and the content of its home page so it would appear higher in search engine rankings for certain key words. The term ‘lift shop’ (the name of its 122 ACCC v Trading Post (2011) 197 FCR 498 at [66]. 123 Google Inc v ACCC (2013) 249 CLR 435; 294 ALR 404; 99 IPR 197; [2013] HCA 1 at [73]. 124 At [148]. 125 At [164].

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Marketing and the Law competitor) was selected as a key word and added into the title of its website and home page. Google search results for the term ‘lift shop’ displayed as Easy Living’s listing: Easy Living Lifts | Home Elevators | Lift Shop – Lift Shop www.easy-living.com.au At Easy Living home elevators website you will find details on all of our lifts and home elevators here, which will help you achieve the easy living you deserve. Lift Shop commenced proceedings against Easy Living claiming trade mark infringement, misleading and deceptive conduct, and passing off (although this action was not pursued at the hearing). Decision: The term ‘lift shop’ was found to be generic rather than distinctive, and the court noted that other businesses in the same market were also identified if a search for ‘lift shop’ was conducted. Easy Living had not tried to associate itself with Lift Shop, but instead endeavoured to obtain business by openly competing with Lift Shop. The court noted the differences between the entries on the search pages, the differences between the nature of the products supplied and that before a customer could proceed towards the purchase of a lift they would need to leave the search page, and enter the actual website. At this stage it would be obvious that the two companies were not related. The court found that Easy Living was using the term ‘Lift Shop’ on its website in a descriptive, not a deceptive, manner to maximise its search rankings, and not to falsely associate itself with its competitor. Accordingly, s 18 of the Australian Consumer Law had not been breached.

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Design of products 6.36 A distinctive design for a product sold in the marketplace can sometimes be protected by a passing off action if it is too closely imitated by a competitor: see Chris Ford Enterprises Pty Ltd v BH & JR Badenhop Pty Ltd.126 However, the law of passing off (whether at common law or under statute) cannot be used to protect the design or ‘look’ of a product per se. There must be deception. If the copying product is clearly labelled or differentiated from the original product then deception can be avoided.127

6.36C

Interlego AG v Croner Trading Pty Ltd (1991) 102 ALR 379; 21 IPR 373; (1991) ATPR 41-124; Interlego AG v Croner Trading Pty Ltd (1992) 111 ALR 577; 25 IPR 65; (1993) ATPR (Digest) 46-098 Facts: Lego was the producer of internationally famous toy blocks, which were the subject of patent protection in many countries, including Australia. However, patent protection only lasts for a limited time. After the patents expired, Croner imported an American toy called Tyco blocks. The Tyco blocks were a copy of the Lego product. In fact, the whole marketing strategy of Tyco was to make Tyco fully compatible with Lego so that ‘a child could reach into a toy box, bucket, container of some kind, pull out a block and not care whether it is a Tyco block or a 126 (1985) 60 ALR 400; 4 IPR 485; (1985) ATPR 40-568. 127 See also Dr Martens Australia Pty Ltd v Figgins Holdings Pty Ltd (1999) 44 IPR 281; [1999] FCA 461 and Koninklijke Philips Electronics NV v Remington Products Australia Pty Ltd (2000) 177 ALR 167; 48 IPR 257; [2000] FCA 876.

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Chapter 6: Passing Off and Unfair Trading Lego block …’. Tyco sold its toy blocks in packs which had some similarities to the Lego packs, but were clearly labelled ‘TYCO’. On the packs there also appeared a bullet containing a picture of two blocks and the words ‘WORKS WITH LEGO’, followed by an asterisk and the ® symbol. Underneath, in far less prominent type, were the words ‘Tyco blocks connect to Lego blocks’. Below this, in smaller type again, appeared the sentence ‘Lego is a registered trade mark of Interlego A.G.’. In Australia there is no requirement to use an asterisk or the ® symbol when using a registered trade mark. There was survey and anecdotal evidence of confusion among buyers. There was also evidence that a number of Tyco pieces were not compatible with Lego. Lego sued for passing off, breach of s 52 of the Trade Practices Act (now s 18 of the Australian Consumer Law), and copyright infringement. Decision: Tyco had a right to copy the Lego product, provided it did not suggest that it was connected with Lego or that the Tyco blocks were made by Lego. Tyco had adequately labelled the product to ensure that such was the case. However, it was found that the statement ‘‘Works With Lego’’ was misleading and deceptive within the meaning of s 52 of the Trade Practices Act (now s 18 of the Australian Consumer Law). The blocks were intended for use by children, and children were likely to draw the simple conclusion that all Tyco pieces fitted with all Lego pieces. Some Tyco pieces were not compatible with Lego. Tyco was therefore restrained from using the words ‘Works With Lego’.

Advertising themes and slogans 6.37 It has been recognised that, in appropriate cases, distinctive advertising themes and slogans can be protected by the passing off action. This was confirmed in Cadbury Schweppes Pty Ltd v The Pub Squash Co Pty Ltd.128

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R & C Products Pty Ltd v S C Johnson & Sons Pty Ltd (1994) ATPR 41-234 Facts: R & C Products (trading as Samuel Taylor) manufactures an insect spray called ‘Mortein’. Between 1968 and 1981, Mortein was advertised on television by a well-known personality, John Laws. The advertisements used a slogan which became quite famous: ‘When you are on a good thing, stick to it’. Johnson manufactures ‘Raid’ which is a competitor of Mortein. Johnson & Sons produced a television advertisement designed to compare Raid favourably with Mortein. Johnson & Sons used John Laws and the punch line: ‘When you find a better thing, switch to it’. R & C Products alleged that the defendant’s conduct amounted to a passing off and a breach of s 52 of the Trade Practices Act (now s 18 of the Australian Consumer Law) in that Johnson’s advertisement created the impression that there was a connection or association between the manufacturer of Raid and the manufacturer of Mortein. Decision: The matters that are relevant in determining whether, in the minds of the public, an association exists, are not limited to the nature of the products, their names or the get-up used. All the circumstances must be looked at, including, in this case, the use of the same presenter and a similar slogan. 128 [1980] 2 NSWLR 851; (1980) 32 ALR 387; [1981] 1 All ER 213, see 6.11C1.

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Marketing and the Law If advertising or get-up has acquired special significance, then the adoption of elements of the advertising or get-up by another trader may give rise to a misrepresentation. Then the question will be whether other steps have been taken which sufficiently distinguish the one trader and its products from the other trader and its products. Johnson had not sufficiently distinguished its product. The public would believe that there was a connection between the manufacturers of Raid and Mortein. An injunction was granted preventing use of the commercial.129

For a similar case involving the use of the same presenter (Mr Goggomobil), initially by Yellow Pages and then by Shannons Insurers, see Telstra Corporation Ltd v Royal & Sun Alliance Insurance Australia Ltd.130

Devices or logos 6.38 A distinctive logo or device identifying a trader or its product can be protected under the law of passing off.

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6.38C

Pinetrees Lodge Pty Ltd v Atlas International Pty Ltd (1981) 38 ALR 187; 59 FLR 244131 Facts: The applicant operated a guesthouse called ‘Pinetrees’ on Lord Howe Island. It used a distinctive logo representing Lord Howe Island in association with its business. The dark blue and green logo was used on letterheads, envelopes, brochures, and advertisements, and on calendars and T-shirts sold to tourists. The design was as follows:

The defendant conducted a tourist and travel agency, handling accommodation on the island. It began advertising Lord Howe Island holidays using in the advertisements, in black and white, the following logo:

129 Johnson & Sons subsequently changed its advertisement to include the words ‘it’s one of the reasons I switched companies’. In a subsequent court case, it was decided that the reference to ‘switching companies’ indicated that the two flysprays emanated from different manufacturers: R & C Products Pty Ltd v S C Johnson & Sons Pty Ltd (1994) ATPR 41-364. 130 (2003) 57 IPR 453; [2003] FCA 786, see 4.42C2. 131 See also Yau’s Entertainment Pty Ltd v Asia Television Ltd (2002) 54 IPR 1; [2002] FCA 338; [2002] FCAFC 78, involving the incorrect use of logos on video recordings; and Rolls-Royce Motors Ltd v DIA (Engineering) Pty Ltd (1981) 50 FLR 340, where the radiator shape and badge of the Rolls-Royce motor vehicle was wrongfully imitated.

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The design was always used in association with the name ‘Lord Howe Island Tourist Centre’. On some stationery and in colour advertising literature, the colours dark blue, green, and mustard yellow were used. The applicant alleged that the defendant was engaging in conduct that was misleading or deceptive in breach of s 52 of the Trade Practices Act (now s 18 of the Australian Consumer Law) and passing off, and sought an injunction to restrain the defendant from using its logo. Decision: The similarity of the logos, in particular the silhouette of the island, was such that a significant number of relevant members of the public would have been likely to have been misled or deceived into believing that the two businesses were the same or that there was some business connection between them. It passes beyond mere confusion. In determining this issue, it is not sufficient to compare the two logos side by side. The matter must be considered by looking at the actions of the public acting in the ordinary course of business. A substantial proportion would have only a passing and therefore imperfect recollection of the applicant’s logo and one which would not retain the detail but only an impression. Thus, the ordinary member of the public would be unlikely to notice any substantial difference between the two logos. The defendant was also guilty of passing off for the same reasons. An injunction was granted.

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Names for events or programs 6.39 On occasions, organisers of events or producers of programs will use titles to identify their events or programs and, once established, such titles can be protected by the law of passing off: see Willard King Organisation Pty Ltd v United Telecasters Sydney Ltd132 and Yardley of London (Australia) Pty Ltd v Chapman & Lester the Sales Promotion Agency Pty Ltd.133

Titles for publications 6.40 It has been long recognised that titles given to publications are protectable under the laws of passing off: see Cricketer Ltd v Newspress Pty Ltd & David Syme & Co Ltd.134 However, publications are often sold with descriptive titles, and the titles in their own right are often difficult to protect, so that the overall ‘get-up’ or appearance of the publication (including the title) must also be imitated in order for passing off to be proved: see S & I Publishing Pty Ltd v Australian Surf Life 132 [1981] 2 NSWLR 547. 133 (1989) 17 IPR 345; (1990) ATPR 40-989. 134 [1974] VR 477, see 6.5C2.

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Saver Pty Ltd.135 In this regard, the more distinctive a title, the more likely it can be protected in its own right (irrespective of ‘get-up’).

6.40C

Emap Elan Ltd v Pacific Publications Pty Ltd (1997) 37 IPR 1; (1997) ATPR 41-551; [1997] FCA 50136 Facts: Emap was a UK publisher of a magazine entitled More!, a fortnightly magazine with worldwide sales of over 430,000. It was aimed at young female readers and placed emphasis on sex and related issues, particularly relationships, fashion, cosmetics, gossip, films, music, and health. It had been distributed in Australia for several years through a limited number of newsagents and bookshops, and had only achieved a small level of sales (varying from 124 to 196 copies per issue). The defendant launched a magazine in Australia under the name More, aimed at the 25–40 age group and, in particular, at married women with children concerned with the role of homemaker. Prior to publishing its first issue, the defendant was informed of the fact that the English magazine was sold in Australia, but took the view that, as the name had not been registered in Australia as a trade mark, the name was free to be used. Emap sought an injunction preventing the defendant from using the title More for its magazine, relying on s 52 of the Trade Practices Act (now s 18 of the Australian Consumer Law). The defendant argued that Emap’s reputation in Australia was insignificant, that the word ‘More’ was an ordinary English word that Emap should not be allowed to monopolise, and that the two publications were aimed at different markets and had been sufficiently differentiated; so that there was no misleading or deceptive conduct in breach of s 52.

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Decision: The Federal Court held that the low level of sales of Emap’s publication in Australia was not detrimental to its case. To begin with, it is not necessary for a plaintiff to have an established business in the jurisdiction — it is sufficient that the plaintiff has a reputation within the jurisdiction in respect of trade or business conducted elsewhere.137 The flow of international communications in modern times makes it easier to prove the existence of a reputation. In any event, the level of sales achieved by More!, and the fact that readership is always greater than actual sales, was sufficient to establish that a ‘substantial number of persons’ were aware of the UK publication. The court accepted that there was a likelihood of deception in this case, even though the respective magazines were aimed at different market segments, not because consumers would believe the two publications were the same, but rather that consumers might conclude that the Australian publication was connected through licensing with the UK publication. Furthermore, young women inevitably grow older, and a person who is a member of the readership group of the UK publication will rapidly advance into the category of person the Australian publication was designed to attract. The court held that the UK publisher had established a distinctive reputation in the name More, a word which was not merely descriptive, or descriptive at all. An injunction was granted.

135 (1998) 168 ALR 396; 43 IPR 581; (1999) ATPR 41-667. 136 See also Melbourne Chinese Press Pty Ltd v Australian Chinese Newspaper Pty Ltd (2004) 63 IPR 38; [2004] FCAFC 201. 137 See Hansen Beverage Co v Bickfords (Australia) Pty Ltd (2008) 251 ALR 1; 79 IPR 174; [2008] FCAFC 181, see 6.6C and 10.12C.

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Quality or standard of products 6.41 Misappropriating a person’s goodwill by falsely claiming for one’s product a quality which is exclusively possessed by another or others can constitute passing off. Chocosuisse Union des Fabricants Suisses de Chocolat v Cadbury Ltd [1999] RPC 826 Facts: Cadbury, the leading chocolate manufacturer in the UK, introduced a new chocolate bar called ‘Swiss Chalet’ to the market. It was made of honey-flavoured milk chocolate and small pieces of almond nougat. On the front of the packaging, the predominant words were ‘Swiss Chalet’ (in gold-edged red letters) and, slightly smaller in size, the word ‘Cadbury’ in its well-known script form. The packaging also had a picture of a snow-capped mountain closely resembling the Matterhorn in Switzerland, with a chalet in the valley below it. The Cadbury ‘glass and a half’ logo was also featured. The chocolate was not made in Switzerland, nor was it made in accordance with Swiss food regulations, and it contained non-cocoa vegetable fat. Chocosuisse, an association of Swiss chocolate manufacturers (such as Lindt and Suchard), commenced proceedings against Cadbury for passing off. The association claimed that Swiss chocolate was a clearly defined class of good in England with distinctive characteristics and a well established reputation for quality, and that Cadbury was passing off its chocolate as belonging to that class.

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Decision: The plaintiffs had proved that, for a significant part of the public, the words ‘Swiss chocolate’ denoted a group of products of distinctive reputation, as Swiss chocolate was perceived to have special qualities. ‘The fact that members of the public have different views of what the features of the distinctive quality are or are incapable of defining it is of little relevance.’ The class of products entitled to bear the designation ‘Swiss chocolate’ was chocolate made in Switzerland in accordance with Swiss food regulations and which was free from vegetable fat other than cocoa fat. The use of the word ‘Swiss’ in ‘Swiss Chalet’ by Cadbury would confuse some members of the public in the sense of indicating that the product was Swiss chocolate. For some people, the Swiss scene on the packaging would reinforce such a message. While the numbers who would be confused into thinking that Swiss Chalet was Swiss chocolate were likely to be smaller than the numbers who would not be confused, nonetheless a substantial number were likely to be confused into thinking that Swiss Chalet belonged to a group of products possessing a particular reputation (Swiss chocolate). As a result, there would be an erosion of the exclusiveness, and damage to the distinctiveness of the term ‘Swiss chocolate’. Cadbury’s use of the words ‘Swiss Chalet’ and the form of its packaging constituted passing off.

A similar allegation was made in Mars Australia Pty Ltd v Sweet Rewards Pty Ltd,138 where Mars argued that the use of red and orange jars by the defendant conveyed representations that the Malt Balls they contained were made from the same ingredients, made from the same recipe, or provided the same taste experience as Maltesers when eaten — in other words, that the products were equivalent in taste and quality. It was common ground that the product equivalence representation 138 (2009) 81 IPR 354; [2009] FCA 606, see 6.11C3.

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was not true if it was made. The judge concluded that the use of the red and orange jars by the defendant did not contain any express representation about product equivalence. There was no statement on the jars to the effect that ‘Malt Balls taste like Maltesers’. The link between the appearance of the red and orange jars and the supposed product equivalence was, therefore, founded upon some aspect of the reputation inherent in the Maltesers product. The defendant submitted, and the judge agreed, that it must be implicit in Mars’s case that there is a deceptive similarity between the appearance of the defendant’s ‘Delfi’ brand jars and the Maltesers get-up. On this view of things, a consumer would think that Malt Balls taste like, or are made from the same ingredients as, Maltesers, only because of the similarity between the two sets of packaging. This argument was rejected. In light of the fact that the orange and red jars were found to be not deceptively similar to the Maltesers get-up, the judge decided that the premise upon which the ‘product equivalence’ argument rested was unsound, and dismissed the allegation.

Character merchandising and sponsorship139

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6.42 Character merchandising and sponsorship is the use of well-known characters or personalities, fictional or real, usually from the entertainment and sporting fields, to advertise, promote, sponsor, and sell products; for example: • singers (Rihanna);140 • comic strips (Superman,141 Batman, Peanuts, Popeye the Sailorman,142 Garfield); • film cartoons and animations (Mickey Mouse, Minnie Mouse143); • television shows (The Muppets,144 Bananas in Pyjamas, South Park, The Simpsons145); • films (Star Wars, ET, Crocodile Dundee,146 Lord of the Rings); • pop groups (Abba,147 INXS148); • singers (Olivia Newton-John,149 Michael Jackson,150Adam Ant);

139 For further information on this topic see L Stevenson, ‘Protection of Character Merchandise Marks under the UK Copyright Act 1956’ [1979] EIPR 66; J McKeough, ‘Character Merchandising: Legal Protection in Today’s Marketplace’ (1984) UNSWLJ 97; S Ricketson, ‘Character Merchandising in Australia: Its Benefits and Burdens’ (1990) IPJ 191; and A Terry, ‘Proprietary Rights in Character Merchandising Marks’ (1990) 18 ABLR 229. 140 Robyn Rihanna Fenty v Arcadia Group Brands Ltd (t/a Topshop) [2015] EWCA Civ 3. 141 DC Comics v Pan American Grain Mfg Co Inc 77 USPQ2d 1220 (TTAB, 2005). 142 King Features Syndicate Inc v Kleeman (O & M) Ltd [1941] AC 417. 143 Radio Corporation Pty Inc v Disney (1937) 57 CLR 448. 144 Children’s Television Workshop Inc v Woolworths (NSW) Ltd (1981) 1 NSWLR 273. 145 Twentieth Century Fox Film Corp & Matt Groening Productions Inc v South Australian Brewing Co Ltd & Lion Nathan Australia Pty Ltd (1996) 66 FCR 451; 34 IPR 225; [1996] FCA 1484. 146 Hogan v Pacific Dunlop Ltd (1988) ATPR 40-914. 147 Lyngstad v Anabas Products Ltd [1977] FSR 62. 148 Hutchence (t/as ‘INXS’) v South Sea Bubble Co Pty Ltd (trading as ‘Bootleg T-shirts’) (1986) 8 ATPR 40-667. 149 Newton-John v Scholl-Plough Australia Ltd (1986) ATPR 40-697. 150 Sony Music Productions Pty Ltd v Tansing (1993) 27 IPR 640.

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• advertising campaign characters (The Smurfs, Mr Goggomobil151); • greeting card characters (Holly Hobbie152); • books (Pooh-Bear, The Wombles, Mr Men153); • film and television stars (Demi Moore, Paul Hogan,154 Hugh Jackman, Andie MacDowell, Sarah Jessica Parker); • models (Elle MacPherson,155 Claudia Schiffer); • media personalities (Ita Buttrose156); and • sporting personalities (Ian Thorpe,157 Kieren Perkins,158 Lisa Curry-Kenny, Greg Norman, Tiger Woods,159 Tracey Wickham,160 Michael Jordan, Andre Agassi, Pat Rafter, Mark Taylor, Ricky Ponting, Adam Gilchrist, Leigh Matthews).

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Character merchandising involves commercialising popular names or characters, and is most often utilised in appealing to children and youth markets. Character merchandising usually consists of: • additions to products, such as the reproduction of images or names upon stationery, clothing (such as shirts and windcheaters), toys, toiletries, food, and so on; or • the product itself, such as dolls, badges, collector cards, and posters, where without the character the product would not exist.161 Sponsorship usually consists of a well-known person ‘giving’ their name to a product in the form of a recommendation or endorsement. The person involved will usually be a celebrity in the entertainment or sporting field, such as an actor attributing his or her beautiful complexion to a particular brand of soap; or a sporting personality attributing his or her success (at least partially) to the use of a particular product (for example, a tennis racquet or golf ball); or his or her healthy condition or fitness to the consumption of certain brands or types of food (such as fat-reduced milk or fibre-enriched bread). This type of advertising is used very broadly in the marketplace and is aimed at virtually all age groups. For the owner or creator of the character, or the celebrity involved, character merchandising and sponsorship provides extra income from licensing the use of the character or the name or image of the celebrity. 151 Telstra Corporation Ltd v Royal & Sun Alliance Insurance Australia Ltd (2003) 57 IPR 453; [2003] FCA 786. 152 Re ‘Hollie Hobbie’ Trade Mark (1984) 1 IPR 486. 153 Nostac Enterprises v New Concept Imports Services Pty Ltd (1981) ATPR 43-135. 154 Hogan v Pacific Dunlop Ltd (1988) ATPR 40-914. 155 See, for example, Trade Mark Number 516423, at . 156 Buttrose v Senior’s Choice (Australia) Pty Ltd [2014] FCCA 2156. 157 Torpedoes Sportswear Pty Ltd v Thorpedo Enterprises Pty Ltd (2003) 132 FCR 326. 158 Talmax Pty Ltd v Telstra Corporation Ltd [1997] 2 Qd R 444. 159 ETW Corporation v Jireh Publishing Inc 332 F 3d 915 (6th Cir, 2003). 160 Wickham v Associated Pool Builders Pty Ltd (1988) ATPR 140-910. 161 Note there is a strong crossover with trade mark in this area, and celebrities will often (sometimes unsuccessfully) attempt to trade mark their names to provided added protection. Kylie Minogue and Kylie Jenner had a long running dispute as to who owned the name ‘Kylie’ (which appears to have been settled out of court) and Beyonce is attempting to trade mark the name of her daughter, Blue Ivy, in a broad range of categories.

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In recent years, there have been many cases concerned with establishing the extent of protection in claims relating to character merchandising and sponsorship. Protection often depends upon the ability to establish passing off, whether at common law or under statute. Further protection can sometimes be claimed utilising the Copyright Act 1968 (Cth) or Trade Marks Act. These statutes are discussed in Chapters 4 and 7 respectively. Copyright protection exists where the copyright creator has a monopoly in the work for a limited period of time. Anyone copying such works, in any form, may be sued for infringement of copyright. A trade mark infringement action can be brought when a character name or motif has been registered as a trade mark for particular products, and someone else uses the mark without authority in connection with their products. In establishing passing off, it is not enough simply to show that some unauthorised use of a character or personality has taken place. There must be a misrepresentation involved. This usually involves proving that the unauthorised use has misled or confused members of the public into believing, contrary to fact, that permission to use the character’s or personality’s name or image has been given.

A. Real persons 6.43 It has now been clearly established in the courts that well-known personalities (celebrities) can protect their name and characteristics, such as their appearance (image) or distinctive voice.

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6.43C1

Hutchence v South Sea Bubble Co Pty Ltd (1986) 64 ALR 33; 6 IPR 473; (1986) ATPR 40-667 Facts: INXS was a successful pop group. The group had granted MMA Management the exclusive right to exploit its name and other property in relation to T-shirts and other clothing. South Sea Bubble Co Pty Ltd (trading as Bootleg T-Shirts) was in the business of retailing T-shirts. Its practice was to take existing designs, mostly associated with successful pop groups, print those designs on T-shirts, and sell them at markets such as Paddy’s Market in Sydney. Without seeking the permission of INXS, the defendant sold T-shirts depicting designs from three of INXS’s albums. The T-shirts were sold from a stall which displayed the following small, handwritten sign at the front: ‘The T-shirts are genuine Bootleg products which have not been authorised by the relevant parties’. Each T-shirt also bore a label and/or adhesive sticker to the following effect: ‘The manufacturer does not warrant the depiction hereon has been authorised’. On the other hand there was evidence that at least one purchaser had been assured that INXS had granted permission to use their album covers on the T-shirts. INXS sought orders for breaches of ss 52 and 53(c) of the Trade Practices Act (now ss 18 and 29(1)(g) of the Australian Consumer Law), passing off, and copyright infringement. Decision: The Federal Court held at an interim hearing that an injunction should be granted on the grounds of passing off and breach of s 52 of the Trade Practices Act, in that some members of the public were likely to be misled or deceived into thinking that the members of INXS had produced, distributed, or authorised the defendant’s T-shirts. The disclaimer was unlikely to have much effect where the target audience was young, the product was inexpensive, and the

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Chapter 6: Passing Off and Unfair Trading sale took place at a crowded market. The court also found that the defendant had represented that its goods, the T-shirts, had a sponsorship or approval that they did not, in fact, have, in breach of s 53(c) of the Trade Practices Act.

Talmax Pty Ltd v Telstra Corp Ltd [1997] 2 Qd R 444; (1996) 36 IPR 46; (1996) ATPR 41-535162 Facts: Telecom (now Telstra) placed a four-page telecommunications advertising supplement, which generally promoted Telstra’s products and services, in the Brisbane Courier Mail. The supplement also contained some general articles, one of which was headed ‘Keiren Leads Charge By Telecom Dolphins’. This article promoted the upcoming Telecom Australian Open Swimming Championships. It included a colour photograph of Keiren Perkins wearing a Telstra Dolphins swimming cap. Telstra sponsors the Australian Swimming Team and National Swimming Squad, which is often described as the ‘Telstra Dolphins’. The advertorial included in the supplement had not been consented to by Perkins or his management company, Talmax. It was alleged that the public would be misled into believing that a commercial relationship existed between Perkins and Telstra, in breach of the Trade Practices Act (now the Australian Consumer Law). Decision: Although Perkins was unsuccessful at first instance, on appeal it was held that the article was misleading. It suggested to the ordinary reader that Perkins was endorsing Telstra products or services or had consented to the article, and that he was a member of the Telecom Dolphins, which at the time was not true. The diminution of an opportunity to exploit commercial advantage was loss or damage for which Perkins should be compensated.

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Clearly, a disclaimer may be used in cases such as these which, in appropriate circumstances, will save the public from being misled: see Newton-John v SchollPlough (Australia) Ltd.163

B. Voice 6.44 In the original hearing of Sim v HJ Heinz Co Ltd, McNair J said:164 It was urged before me that in the case of a professional man like an actor, his reputation in the mind of the public, based on his performances, is a right of property capable of invasion, just as is the right of property contained in a particular kind of goods or method of get-up of goods, and that here the defendants were passing off as and for a performance by the plaintiff a performance that was not by him. Put in a slightly different way, it was said that an actor had business or trade resting in performance by him of dramatic or musical works and that his goodwill lay in that performance. To confuse the public as to his performances was to do injury to that goodwill. 162 Contrast Honey v Australian Airlines Ltd (1989) 14 IPR 264; (1989) ATPR 40-961. 163 (1986) 11 FCR 233; (1986) ATPR 40-697, see 10.21C. 164 [1959] 1 All ER 547 at 551; [1959] RPC 75.

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Marketing and the Law I am not at this stage going to rule on the question whether, in any circumstances, an action of passing off would lie for the unauthorised use of a man’s voice, be he actor or not an actor, though it would seem to me to be a grave defect in the law if it were possible for a party, for the purpose of commercial gain, to make use of the voice of another party without his consent.

The sentiments of McNair J would appear to have subsequently been borne out by the case law, and there seems to be no reason to disallow a person with a distinctive voice from preventing unauthorised imitation in an appropriate case. However, obvious parodies would not generally confuse or mislead and, as such, would not be prohibited.

C. Fictitious characters and images

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6.45 As is the case with real persons, the creators (or owners) of fictitious characters and images can now fairly readily prevent the name or characteristics of their creations from being copied or imitated, relying upon passing off laws. This has not always been the case. In Wombles Ltd v Wombles Skips Ltd,165 the court refused to grant an injunction to the owners of the well-known television characters called ‘the Wombles of Wimbledon Common’. A hirer of rubbish skips in the Wimbledon area called itself ‘Wombles Skips’. The court did not accept that users of Wombles Skips would believe that there was a connection between the plaintiff and the skip company. However, this case was determined at a time when licensing arrangements were much less common. More recently, the courts are far more ready to infer a misrepresentation that a business connection, generally in the form of a licensing arrangement, exists: see Hexagon Pty Ltd v Australian Broadcasting Commission,166 Children’s Television Workshop Inc v Woolworths (NSW) Ltd,167 and Surge Licensing Inc v Pearson168 (the Teenage Mutant Ninja Turtles case).

6.45C

Twentieth Century Fox Film Corp & Matt Groening Productions Inc v South Australian Brewing Co Ltd & Lion Nathan Pty Ltd (1996) 66 FCR 451; 34 IPR 225; [1996] FCA 1484 Facts: The Simpsons is produced by Fox Film. In the series Homer Simpson drinks ‘Duff’ beer, a make-believe product. At least two episodes of The Simpsons are devoted mainly to Duff beer. The characters from The Simpsons appear on a wide range of merchandise. Duff beer appears on T-shirts and caps. SA Brewery produced a beer called ‘Duff’. On its beer can and in its promotion, SA Brewery made no reference to The Simpsons. The design, colour (yellow), and get-up of the SA Brewery can were quite different from that featured in The Simpsons. SA Brewery sent letters to retailers asking them not to use ‘Simpsons’ imagery when selling the beer. SA Brewery did not seek 165 [1977] RPC 99. 166 (1975) 7 ALR 233. 167 [1981] 1 NSWLR 273; (1980) 1B IPR 609, see 6.14C. 168 (1991) 21 IPR 228; (1991) ASC 56-077.

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Chapter 6: Passing Off and Unfair Trading permission from Fox Film to use the word ‘Duff’’. The evidence suggested that consumers drew an immediate and strong connection with The Simpsons. Fox Film sued SA Brewery for passing off and a breach of s 52 of the Trade Practices Act (now s 18 of the Australian Consumer Law). Decision: The court found in favour of Fox Film. The word ‘Duff’, when used in association with beer, had acquired a secondary meaning. It had become associated in the minds of the relevant section of the public with The Simpsons. SA Brewery had not taken any, or any sufficient, steps to disclaim any such association. On the issue of intention, Tamberlin J said:169 The intention of the breweries is to persuade consumers to believe that there is a strong association between their product and The Simpsons. The breweries realised that they might be running a risk in promoting their can yet their intention was to obtain full benefit of The Simpsons association while at the same time attempting to distance the product from the series just sufficiently to avoid liability under the Act or at common law … In short, the breweries and their advisers intended to exploit the association between The Simpsons series and the beer by attempting to use the least necessary degree of overt connection, while at the same time being able to rely on the force of that association in promoting their beer. In accordance with the advice received, they decided to rely on the ‘Duff’ name as sufficient alone to make the connection. Their intention was to ‘sail as close as possible to the wind’ in order to ‘cash in’ on the reputation of The Simpsons without stepping over the line of passing off or deceit … Accordingly, I consider this knowledge is important evidence to support the inference that the goal of creating and exploiting the powerful association with The Simpsons had been achieved.

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If a person loosely imitates the image of a person or character in such a way that it should be evident to the average member of the public that what is being done is a send-up, spoof, or parody, then the consumer is not likely to be confused, misled, or deceived, and the law will not be broken. However, if the conduct is engaged in for commercial advantage, the imitator must be extremely careful to avoid breaching the law: see Pacific Dunlop Ltd v Hogan.170

Marketing Advice 6.46 When choosing a trade name or designation, the following principles should be kept in mind. • Descriptive or semi-descriptive names or designations can be protected pursuant to a passing off action, but it is not easy, and generally evidence establishing that the name or designation has acquired a secondary meaning associated with the user will need to be produced.

169 At 466–467. 170 (1989) 87 ALR 14; 14 IPR 398; (1989) ATPR 40-948, see 10.29C.

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• The more distinctive and the less descriptive a name or designation, the easier it will be to protect the name or designation relying upon passing off. A reputation attaches more easily to a distinctive name. • Distinctive names are far more easily registered under the Trade Marks Act and it is advisable to take this step whenever possible: see Chapter 7. Registered trade designations are more readily protectable than unregistered designations: see Chapter 7. • Ensure that any chosen trade name or designation is not too similar to that used by another trader in the marketplace. Solicitors and trade mark attorneys can carry out ‘clearance’ searches to assist your investigations of the market. If there is any likelihood of confusion with your chosen trade name or designation and one already in use by another trader, reconsider your choice. • If some similarities to another trader’s name or designation are unavoidable, consider the strategic use of an appropriate disclaimer to avoid possible confusion. • Distinctiveness in packaging is also important and can overcome the use of a similar name. • Do not use the names or designations (including images and likenesses) of personalities or fictitious characters in connection with your business without first obtaining explicit permission (or a licence) to do so.

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Registration of Trade Marks

7

Introduction to Trade Marks ............................................................. 7.1 History of Trade Marks Protection ................................................... 7.2 Overview of the Trade Marks Act ..................................................... 7.3 Consumer protection ..................................................................... 7.4 Trader protection ............................................................................. 7.5 What is a Trade Mark? ....................................................................... 7.6 The Registration Process .................................................................... 7.7 Classification of goods and services ............................................ 7.8 Registering a trade mark for all classifications ........................... 7.9 Requirements for Registration of a Trade Mark ........................... 7.10 Capable of distinguishing ............................................................ 7.11 Inherently adapted to distinguish ............................................... 7.12 A. Non-descriptive words ........................................................ 7.13 B. Invented words ..................................................................... 7.14 C. The signature of an applicant ............................................. 7.15 D. Device marks or logos ......................................................... 7.16 E. Shapes, sounds, and scents ................................................. 7.17 i. Shapes ......................................................................... 7.18 ii. Sounds ......................................................................... 7.19 iii. Scents .......................................................................... 7.20 F. Marks not inherently adapted to distinguish .................. 7.21 G. Marks only partially inherently adapted to distinguish ............................................................................ 7.22 i. Slogans ........................................................................ 7.23 ii. Colours ........................................................................ 7.24 H. Marks distinguished through extensive use .................... 7.25 i. Shapes and colours ..................................................... 7.26 267

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Marketing and the Law

ii. Surnames ..................................................................... iii. Place names ................................................................. Other registration requirements ................................................ A. The trade mark consists of or contains prohibited signs ....................................................................................... B. The trade mark cannot be represented graphically ........ C. The trade mark is scandalous ............................................ D. Use of the trade mark would be contrary to law ........... E. The trade mark is likely to deceive or cause confusion .............................................................................. F. The trade mark is too similar to another registered mark .................................................................... i. Substantially identical ................................................ ii. Deceptively similar ...................................................... iii. Similar goods or services ............................................. iv. Closely related goods or services ................................ When can a Sign be Registered as a Trade Mark? ...................... Disclaiming Rights to Exclusive Use ............................................... Opposition to Registration ............................................................. Trade Mark Rights ............................................................................ Term of Protection ........................................................................... Infringement of Registered Trade Mark Rights ........................... Use on the same goods or services ............................................ A. Use ‘as a trade mark’ .......................................................... B. The difference between ‘substantially identical’ and ‘deceptively similar’ .................................................... Use on similar goods or services ................................................ A. Goods or services of the same description...................... B. Closely related goods and services .................................... C. Confusion or deceptive use ............................................... Use on unrelated goods or services ........................................... Importing trade-marked goods .................................................. Dealing in second-hand trade-marked goods .......................... Defences to an Infringement Action ............................................. Remedies for Infringement .............................................................. Unjustified threats ........................................................................ Criminal liability ........................................................................... Amendment, Revocation, or Cancellation of Trade Marks ....... The trade mark has become descriptive .................................... Non-use of the trade mark ......................................................... On any grounds which could have been used to oppose a trade mark ............................................................................... Further reasons for amendments or cancellation ................... Defensive Trade Marks .................................................................... Certification Marks ........................................................................... 268

7.27 7.28 7.29 7.30 7.31 7.32 7.33 7.34 7.35 7.36 7.37 7.38 7.39 7.40 7.41 7.42 7.43 7.44 7.45 7.46 7.47 7.48 7.49 7.50 7.51 7.52 7.53 7.54 7.55 7.56 7.57 7.58 7.59 7.60 7.61 7.62 7.63 7.64 7.65 7.66

Chapter 7: Registration of Trade Marks

7.67 7.68 7.69 7.70 7.71 7.72 7.73 7.74 7.75 7.76 7.77

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International Registration of Trade Marks ................................... Management of Trade Marks ......................................................... Comparison between Passing Off and the Trade Marks Act ..... Business and Company Names ...................................................... Definition of a business name ..................................................... Purpose of the business names legislation ................................ Refusal of registration ................................................................. Company names ........................................................................... No rights conferred on registered business and company names.......................................................................... Internet Domain Names ................................................................. Marketing Advice ...............................................................................

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Introduction to Trade Marks 7.1 Trade marks, usually in the form of brand names or logos, have long been used by suppliers in the marketplace to identify a connection between themselves and their products. A successful and well-established trade mark is one of the most valuable intangible assets a marketer can possess. The value attached to internationally recognised brand names such as Amazon, Google, Coca-Cola, Mercedes, adidas, Nike, and the like, and the symbols or logos used in connection with such names, are almost incalculable. A trade mark performs two significant roles. 1. Trader protection: The primary purpose of a trade mark is to indicate the origin of goods or services, thus protecting the interests and reputation of traders. Trade marks clearly facilitate the advertising of products. Mass advertising and distribution have significantly increased the importance and value of trade marks by encouraging brand loyalty. Furthermore, a new product bearing an existing mark has a much higher likelihood of success than a new product with a totally new mark, and considerably less advertising expenditure needs to be incurred in persuading consumers to try such products.1 2. Consumer protection: Consumers use trade marks to choose between competing goods and services. Consumers often rely on the fact that a trade mark emanates from a particular trader recognised for consistency and quality.

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History of Trade Marks Protection2 7.2 Trade marks law is an extension of the law of passing off. The passing off action has always protected unregistered or ‘common law’ trade marks, and still does. However, the often difficult, time-consuming, and costly procedure involved in successfully proving that passing off has occurred in the marketplace, led to agitation for a voluntary system of registered trade marks, resulting in the trade marks legislation being introduced. The creation of a Register of trade marks was designed to overcome the need for a trader to prove, in each case, the elements of passing off, such as reputation, deception, and damage. Registration alone was evidence of the rights of the trade mark proprietor. The origins of the Australian registered trade marks system are to be found in the United Kingdom, which passed the Merchandise Marks Act in 1862, followed by the Trade Marks Registration Act in 1875. Legislation along the lines of these 1 2

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See A Stewart, P Griffith, J Bannister and A Liberman, Intellectual Property in Australia, 5th ed, LexisNexis, Australia, 2014 at [19.2]. For a comprehensive reference, see B Elkington, M Hall and D Kell, Butterworths Annotated Acts: Annotated Trade Marks Act 1995, LexisNexis, Sydney, 2010.

Chapter 7: Registration of Trade Marks

Acts was enacted by various Australian colonies, but after Federation uniform legislation was passed by the Commonwealth parliament in the form of the Trade Marks Act 1905 (Cth). The current Act is the Trade Marks Act 1995 (Cth).

Overview of the Trade Marks Act 7.3 The Trade Marks Act establishes a Trade Marks Office, which is part of IP Australia. The Trade Marks Office is administered by a Registrar of Trade Marks. A Register of trade marks is kept at the Trade Marks Office, which contains particulars of trade marks, certification trade marks, collective trade marks, and defensive trade marks. The Register is open to public inspection and can be searched online.3 The Register establishes a convenient system for determining whether a trade mark might belong to another.

Consumer protection 7.4 By preventing the registration of the same or very similar marks,4 the Trade Marks Act prevents confusion in the minds of the public in relation to similar registered trade marks.

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Trader protection 7.5 The Trade Marks Act also assists the owner of a registered trade mark in passing off situations, by allowing the registered proprietor to sue for infringement without the need to rely on common law passing off. This is done by establishing that another mark is a copy or imitation of the registered mark. In this sense, the protection provided to the registered trade mark owner can be narrower than that provided by the passing off action, as trade mark infringement is concerned with only one method of passing off, namely, the wrongful use of a trade mark.5 However, the statutory protection provided by the Trade Marks Act has one significant advantage: protection can be absolute, in the sense that, once the wrongful use of a mark on goods or services for which it has been registered has been established within the terms required by the Act, infringement is proven. In other words, with respect to infringement under s 120(1) of the Trade Marks Act, there is no requirement that the owner of the trade mark prove that its use by another trader has caused confusion in the marketplace.6

3 4 5 6

The Register can be searched at . Usually with respect to the same or similar goods or services. This has been offset to some degree by the expanded definition of a trade mark adopted in the Trade Marks Act 1995, which now allows for a significant array of indicia to be registered: see 7.6. See Trade Marks Act 1995 s 120(1); see also 7.45–7.55, where infringement is discussed.

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What is a Trade Mark? 7.6 A trade mark is defined by s 17 of the Trade Marks Act as follows: A trade mark is a sign used, or intended to be used, to distinguish goods or services dealt with or provided in the course of trade by a person from goods or services so dealt with or provided by any other person.

In order to register a trade mark, it therefore must be a ‘sign’, which is defined in s 6 of the Trade Marks Act as including (individually or in combination): any letter, word, name, signature, numeral, device, brand, heading, label, ticket, aspect of packaging, shape, colour, sound or scent.

By far the most common forms of trade mark are those consisting of a word or words, and logos and devices, which are sometimes combined with words. However, the definition of a sign in the Trade Marks Act was broadened to specifically recognise that shapes, colours, sounds, scents, and aspects of packaging can potentially perform the function of a trade mark. This flexible definition is intended to serve the needs of the marketplace, so as to be capable of adapting to changes in marketing practices. Furthermore, it should be noted that the definition is not exclusive. Thus, the Trade Marks Office has indicated its willingness to accept trade marks which consist of moving images, holograms (which change their character when viewed from different angles), gestures, textures, and possibly even the taste of goods.7 If a sign actually functions in the marketplace as a trade mark, it should be registrable as a trade mark, provided it satisfies the usual requirements.

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The Registration Process 7.7 An application to register a trade mark may only be made by a person who claims to be the owner of the mark.8 Ownership is not established by the applicant showing ‘invention’ of the mark or that the mark is novel, but merely that it was first adopted by the applicant as a trade mark for the goods or services in question. An application for registration is made on an approved form prescribed by the Trade Marks Regulations 1995 (Cth), which must be accompanied by a specified fee. The form contains a section upon which the trade mark must be graphically represented, or for special types of trade marks such as scents or sounds, described in words. The application is examined to see if the mark meets the requirements of the Trade Marks Act before it is accepted. This can take some time, so the Trade Marks Act has a provision whereby, upon payment of an extra fee, the approval 7 8

272

See IP Australia, Trade Marks Office Manual of Practice and Procedure, available at , pt 21 at [9] and [10]. Trade Marks Act 1995 s 27(1).

Chapter 7: Registration of Trade Marks

process can be accelerated. Procedures exist so that other traders in the marketplace have the opportunity to oppose the registration of a trade mark after its acceptance and prior to its registration. If the mark passes through the examination process and is not successfully opposed, it is accepted and registered. When registering a trade mark, an applicant must indicate the class of goods or services for which registration is sought. Furthermore, within that class, the applicant must nominate the specific goods and/or services in connection with which the trade mark is to be used. The appropriate classification system is contained in the Trade Marks Regulations.

Classification of goods and services 7.8 The Schedule contained in the Trade Marks Regulations classifying goods and services under the Trade Marks Act is as follows. TABLE 7.1 SCHEDULE 1 TO THE TRADE MARK REGULATIONS: CLASSIFICATION OF GOODS AND SERVICES

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PART 1 — CLASSES OF GOODS 1.

Chemicals used in industry, science and photography, as well as in agriculture, horticulture and forestry; unprocessed artificial resins, unprocessed plastics; manures; fire extinguishing compositions; tempering and soldering preparations; chemical substances for preserving foodstuffs; tanning substances; adhesives used in industry

2.

Paints, varnishes, lacquers; preservatives against rust and against deterioration of wood; colourants; mordants; raw natural resins; metals in foil and powder form for painters, decorators, printers and artists

3.

Bleaching preparations and other substances for laundry use; cleaning, polishing, scouring and abrasive preparations; soaps; perfumery, essential oils, cosmetics, hair lotions; dentifrices

4.

Industrial oils and greases; lubricants; dust absorbing, wetting and binding compositions; fuels (including motor spirit) and illuminants; candles, wicks for lighting

5.

Pharmaceutical and veterinary preparations; sanitary preparations for medical purposes; dietetic food and substances adapted for medical or veterinary use, food for babies; dietary supplements for humans and animals; plasters, materials for dressings; material for stopping teeth, dental wax; disinfectants; preparations for destroying vermin; fungicides, herbicides

6.

Common metals and their alloys; metal building materials; transportable buildings of metal; materials of metal for railway tracks; non-electric cables and wires of common metal; ironmongery, small items of metal hardware; pipes and tubes of metal; safes; ores

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Marketing and the Law

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TABLE 7.1 SCHEDULE 1 TO THE TRADE MARK REGULATIONS: CLASSIFICATION OF GOODS AND SERVICES — cont’d

274

7.

Machines and machine tools; motors and engines (except for land vehicles); machine coupling and transmission components (except for land vehicles); agricultural implements, other than hand operated; incubators for eggs; automatic vending machines

8.

Hand tools and implements (hand operated); cutlery; side arms; razors

9.

Scientific, nautical, surveying, photographic, cinematographic, optical, weighing, measuring, signalling, checking (supervision), life-saving and teaching apparatus and instruments; apparatus and instruments for conducting, switching, transforming, accumulating, regulating or controlling electricity; apparatus for recording, transmission or reproduction of sound or images; magnetic data carriers, recording discs; compact discs, DVDs and other digital recording media; mechanisms for coin-operated apparatus; cash registers, calculating machines, data processing equipment, computers; computer software; fire-extinguishing apparatus

10.

Surgical, medical, dental and veterinary apparatus and instruments, artificial limbs, eyes and teeth; orthopaedic articles; suture materials

11.

Apparatus for lighting, heating, steam generating, cooking, refrigerating, drying, ventilating, water supply and sanitary purposes

12.

Vehicles; apparatus for locomotion by land, air or water

13.

Firearms, ammunition and projectiles; explosives; fireworks

14.

Precious metals and their alloys; jewellery, precious stones; horological and chronometric instruments

15.

Musical instruments

16.

Paper and cardboard; printed matter; bookbinding material; photographs; stationery; adhesives for stationery or household purposes; artists’ materials; paintbrushes; typewriters and office requisites (except furniture); instructional and teaching material (except apparatus); plastic materials for packaging; printers’ type; printing blocks

17.

Unprocessed and semi-processed rubber, gutta-percha, gum, asbestos, mica and substitutes for all these materials; plastics in extruded form for use in manufacture; packing, stopping and insulating materials; flexible pipes, not of metal

18.

Leather and imitations of leather; animal skins, hides; trunks and travelling bags; umbrellas and parasols; walking sticks; whips, harness and saddlery

19.

Building materials (non-metallic); non-metallic rigid pipes for building; asphalt, pitch and bitumen; non-metallic transportable buildings; monuments, not of metal

20.

Furniture, mirrors, picture frames; unworked or semi-worked bone, horn, ivory, whalebone or mother-of-pearl; shells; meerschaum; yellow amber

21.

Household or kitchen utensils and containers; combs and sponges; brushes (except paintbrushes); brush-making materials; articles for cleaning purposes; steelwool; unworked or semi-worked glass (except glass used in building); glassware, porcelain and earthenware

22.

Ropes and string; nets; tents, awnings and tarpaulins, sails; sacks; padding and stuffing materials (except of paper, cardboard, rubber or plastics); raw fibrous textile materials

Chapter 7: Registration of Trade Marks TABLE 7.1 SCHEDULE 1 TO THE TRADE MARK REGULATIONS: CLASSIFICATION OF GOODS AND SERVICES — cont’d 23.

Yarns and threads, for textile use

24.

Textiles and substitutes for textiles; bed covers; table covers

25.

Clothing, footwear, headgear

26.

Lace and embroidery, ribbons and braid; buttons, hooks and eyes, pins and needles; artificial flowers

27.

Carpets, rugs, mats and matting, linoleum and other materials for covering existing floors; wall hangings (non-textile)

28.

Games and playthings; gymnastic and sporting articles; decoration for Christmas trees

29.

Meat, fish, poultry and game; meat extracts; preserved, frozen, dried and cooked fruits and vegetables; jellies, jams, compotes; eggs; milk and milk products; edible oils and fats

30.

Coffee, tea, cocoa and artificial coffee; rice; tapioca and sago; flour and preparations made from cereals; bread, pastry and confectionery; ices; sugar, honey, treacle; yeast, baking-powder; salt; mustard; vinegar, sauces (condiments); spices; ice

31.

Agricultural, horticultural and forestry products; raw and unprocessed grains and seeds; fresh fruits and vegetables; natural plants and flowers; live animals; foodstuffs for animals; malt

32.

Beers; mineral and aerated waters and other non-alcoholic beverages; fruit beverages and fruit juices; syrups and other preparations for making beverages

33.

Alcoholic beverages (except beers)

34.

Tobacco; smokers’ articles; matches

35.

Advertising; business management; business administration; office functions

36.

Insurance; financial affairs; monetary affairs; real estate affairs

37.

Building construction; repair; installation services

38.

Telecommunications

39.

Transport; packaging and storage of goods; travel arrangement

40.

Treatment of materials

41.

Education; providing of training; entertainment; sporting and cultural activities

42.

Scientific and technological services and research and design relating thereto; industrial analysis and research services; design and development of computer hardware and software

43.

Services for providing food and drink; temporary accommodation

44.

Medical services; veterinary services; hygienic and beauty care for human beings or animals; agriculture, horticulture, and forestry services

45.

Legal services; security services for the protection of property and individuals; personal and social services rendered by others to meet the needs of individuals

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PART 2 — CLASSES OF SERVICES

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Once registered, the owner of a trade mark can generally prevent other traders from using that mark, or a very similar mark, on or in relation to the goods or services for which it has been registered.9

Registering a trade mark for all classifications 7.9 In theory it is possible to register a trade mark for all goods or services in all 45 classifications listed in Sch 1 to the Trade Marks Regulations. However, in practice such an exercise would not only be extremely expensive (the IP Australia fees are paid per class), but usually pointless. The Trade Marks Act requires that a person applying to register a trade mark must be ‘using or intending to use’ the trade mark ‘in relation to the goods and/or services in respect of which registration is sought’: Trade Marks Act s 27.10 Even if a trade mark is registered, it can subsequently be removed from the Register for non-use: see 7.62. If an applicant for a trade mark intends to use a particular mark (or a series of marks) on goods or services in more than one class, in Australia, it is possible to do so in a single registration: Trade Marks Act ss 19(2) and 51A.

Requirements for Registration of a Trade Mark 7.10 There are a number of limitations which prevent the registration of some signs as a trade mark. The grounds for rejecting an application for a trade mark are contained in Pt 4 Div 2 of the Trade Marks Act.

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Capable of distinguishing 7.11 The primary requirement for registration of a trade mark is that it must be capable of distinguishing the applicant’s goods or services (in respect of which the trade mark is sought to be registered) from the goods or services of other persons: Trade Marks Act s 41(1). This requirement is clearly fundamental, for unless a trade mark distinguishes one person’s goods or services from another’s, it is simply not performing the function of a trade mark. In other words, it will not assist customers in differentiating between the goods or services offered by competing traders.

9

Use by other traders of a registered mark on different classes or types of goods or services can be prevented in more limited situations: see discussion of infringement at 7.45–7.55. 10 Owners of very well-known trade marks may be able to protect those trade marks by a defensive registration: see 7.65.

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In dealing with this issue, the Registrar11 is required by the Trade Marks Act to consider the extent to which the applicant’s trade mark is inherently adapted to distinguish the goods or services applied for. In doing so, the Registrar determines whether (and if so, to what extent) the mark is inherently adapted to distinguish. If the mark is not inherently distinctive (or is partly inherently distinctive), the Registrar looks to see whether the mark has acquired distinctiveness.

Inherently adapted to distinguish 7.12 Inherent adaptation refers to the nature of the mark itself and not how it may have already been used or is known. It ‘is to be assessed by reference to the perception and understanding of members of the public seeing it for the first time’.12 When a mark is examined to see if it is inherently adapted to distinguish, the question is whether the mark is ‘such that by its use the applicant is likely to attain his object of thereby distinguishing his goods from the goods of others’.13 After assessing the ‘ordinary signification’ of the mark, a further question may need to be asked.14 Kitto J15 put it this way: is ‘the word … one which other traders are likely in the ordinary course of their business and without any improper motive, to desire to use upon or in connection with their goods’? Some trade marks are more likely to be inherently capable of distinguishing one trader’s goods or services from others. For example:16 • non-descriptive words; • invented words; • signatures; and • logos.

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A. Non-descriptive words 7.13 Common words, which have no direct reference to the character or quality of the goods or services to which they will be attached, would usually be inherently adapted to distinguish the applicant’s goods and services from those of other traders.

11 12 13 14 15

References to the Registrar include the Registrar’s delegates. Mantra Pty Ltd v Spagnuolo (2012) 290 ALR 158; 96 IPR 464; [2012] FCA 769. Clark Equipment Co v Registrar of Trade Marks (1964) 111 CLR 511 at 513; 38 ALJR 215; [1964] HCA 55. Cantarella Bros Pty Ltd v Modena Trading [2014] HCA 48, see 7.13C. F H Faulding & Son Ltd v Imperial Chemical Industries of Australia and New Zealand Ltd (1965) 112 CLR 537; 39 ALJR 95. 16 Trade marks that are not inherently adapted to distinguish usually describe the kind, quality, purpose, value, geographic origin, or some other characteristic of the goods or services: Trade Marks Act 1995 s 41(4) note 1.

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For example: • • • • • •

SHELL for petrol; ROSELLA for food stuffs; APPLE for recordings, computers, clothing; VENUS for pencils; SUNSHINE for powdered milk, biscuits; VELVET for soap powder.

This applies to common words in other languages if they are well-known in Australia. When assessing descriptiveness, the focus is not just on the literal translation, but on the meaning or impression of the words as understood by Australian consumers of the goods or services. Cantarella Bros Pty Ltd v Modena Trading [2014] HCA 48 7.13C

Facts: Cantarella is the owner of Australian trade mark registrations for CINQUE STELLE and ORO for coffee. CINQUE STELLE and ORO mean ‘five stars’ and ‘gold’ in Italian. Modena’s coffee products contained the words CINQUE STELLE and ORO. Cantarella commenced proceedings for trade mark infringement. Modena sought to revoke Cantarella’s trade marks on the basis that they were not inherently adapted to distinguish. The primary judge found in favour of Cantarella. Emmet J held that most Australian consumers would not know what CINQUE STELLE and ORO meant and so they were inherently distinctive in Australia.

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On appeal, the Full Federal Court disagreed. It held that Italian was the second most spoken language in Australia, that there was a strong association between coffee and Italy, and that other traders would thus be likely in the ordinary course of their coffee business to wish to use CINQUE STELLE and ORO to describe the quality of their coffee products. Cantarella was granted special leave to appeal to the High Court. Decision: The appeal was allowed. CINQUE STELLE and ORO were inherently adapted to distinguish Cantarella’s goods in Australia. Where common words make a ‘covert and skilful allusion’ to the goods or services, they can be inherently distinctive. Where common words make a ‘direct reference’ to the goods or services, they will be descriptive and therefore not inherently distinctive. The evidence did not establish that CINQUE STELLE and ORO were ‘understood in Australia by persons concerned with coffee products to be directly descriptive of the character of quality of such goods’. The majority held that CINQUE STELLE and ORO did not make a ‘direct reference to the character or quality of the goods’. As such, the words were not ones that other traders in the ordinary course of their business without improper motive were likely to use.

B. Invented words 7.14 An invented word, being unique, is often capable of distinguishing goods and services in the marketplace. Examples of invented words which are registered as trade marks are: KODAK, ASPRO, VEGEMITE, NESCAFE, AMPOL, QANTAS, 278

Chapter 7: Registration of Trade Marks

TARAX, PELACO, DULUX, TOYOTA, MAZDA, OXO,17 KANGARUCCI, iPOD, and GRANOLA.18 Misspellings, variations, and distortions of ordinary words will not necessarily be inventive enough to be capable of distinguishing the applicant’s goods and services from those of other traders. Examples of words which might be refused registration (because their derivation is obvious, combined with the fact that the words have a descriptive quality in relation to the goods for which they are registered) are: • ORLWOOLA for woollen goods;19 • SARILLA for beverages, including sarsaparilla;20 • ROHOE for rotary hoes;21 • ELECTRIX for electrics.22

C. The signature of an applicant 7.15 In recognition that no person has identical handwriting to another, it would seem appropriate to recognise a signature as being unique and therefore capable of distinguishing that person’s goods or services from others. Protection is given to the appearance of the signature, rather than the name being signed.

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D. Device marks or logos 7.16 Distinctive pictorial representations, symbols, shapes, logos, labels, tickets, aspects of packaging, and so on are more likely to be capable of distinguishing one trader’s goods or services from another’s. Again, it is the overall appearance or representation that is being registered. A common practice is to register composite marks, consisting of devices combined with words, letters, or numerals. Some common devices, such as border embellishments (wavy lines, circles, stripes, squares) will usually not help in distinguishing goods or services from others, nor will illustrations which merely represent the product, such as the use of grapes and vine leaves for wine, thistles and tartans for shortbread biscuits, and knives and forks for eating houses (unless the illustrations are drawn in a unique stylised fashion). For example, in Beecham Group plc v Colgate-Palmolive Co,23 devices featuring a neatly formed blob of toothpaste incorporating different patterns of coloured stripes were refused registration because the representations were not sufficiently stylised or otherwise distinctive to be capable of distinguishing. 17 See Re Liebig’s Extract of Meat Co Ltd’s Trade Mark; Re Wailes, Dov & Co (1902) 22 NZLR 165. 18 Trade Mark Number 32227; although see Australasian Health & Nutrition Association Ltd (t/as Sanitarium Health Food Co) v Irrewarra Estate Pty Ltd (t/as Irrewarra Sourdough) (2012) 292 ALR 101; [2012] FCA 592. 19 Brock and Co Ltd’s Application (1909) 26 RPC 683. 20 Schweppes Ltd v Rowlands Proprietary Ltd (1913) 16 CLR 162; [1913] HCA 18. 21 Howard Auto-Cultivators Ltd v Webb Industries Pty Ltd (1946) 72 CLR 175; 20 ALJR 117. 22 Electrix Ltd v Electrolux Ltd [1960] AC 722; [1959] 3 All ER 170. 23 (2001) 58 IPR 161; [2001] ATMO 119.

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Examples of some registered device marks are:

E. Shapes, sounds, and scents 7.17 Other forms of trade mark, perhaps not so obviously capable of distinguishing, may nevertheless meet this requirement in some circumstances.

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i. Shapes 7.18 Prior to the introduction of the Trade Marks Act in 1995, attempts to register the shape of goods commonly failed. For example, registration for the donut shape of the Life Saver sweet was refused in Australia;24 the House of Lords in England refused to allow registration for the shape of the well-known ‘Coke’ bottle.25 The basic reason for refusing registration in these cases was the view that a trade mark must be separate and distinct from the product itself, in the sense that it is something added to a product to distinguish it from competitive products. Views like these do not accord with modern business practice, and the changes introduced by the Trade Marks Act acknowledge this fact. As long as the shape of a product serves primarily to identify a product and to distinguish it from competing products, it may be registered as a trade mark. Many shapes have now been registered in Australia. The majority of registrations are for distinctively shaped containers and bottles for products including drink, coffee, jam, and perfume; and shapes applied to confectionery, biscuits, ice creams, and cereals. Examples include the shape of the Coca-Cola bottle, the bear shape used by Arnotts for its Teddy Bear brand biscuits and the Caramello koala shape used by Cadbury for a chocolate bar. For a case example, see Kenman Kandy Australia Pty Ltd v Registrar of Trade Marks,26 where the majority of the Full Federal Court allowed a fanciful six-legged bug shape to be registered for confectionery. Other shapes registered include such wellknown images as the Porsche sports car (for a range of goods and services) and a number of characters created and owned by Time Warner, such as Bugs Bunny and Daffy Duck (in connection with retail services). In Re Freshfood Holdings Pty

24 Life Savers (Australia) Ltd’s Application (1952) 22 AOJP 3106. Interestingly, even under the new legislation, an attempt to register the same shape has been unsuccessful: see Cadbury Schweppes Pty Ltd & Effem Foods Pty Ltd v Société des Produits Nestlé SA [2003] ATMO 74. The main reason for refusal to register was because other traders had a need in the ordinary course of business to use the shape on similar goods. 25 Re Coca-Cola’s Trade Mark [1986] RPC 421. 26 (2002) 56 IPR 30; [2002] FCAFC 273.

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Ltd,27 it was accepted by the Registrar that a shape could be inherently adapted to distinguish if: • the shape is original; • the shape is striking to the eye; • the unusual aspects of the shape are not dictated by any functional requirements, but are rather purely ornamental; • the shape is unique to the goods of which registration is sought; and • other traders would have no reasonable basis for a desire to use the shape. An example of a shape registered for Toblerone chocolate is as follows:

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The packaging used for Toblerone comprising a triangular box and the snowcapped mountain depicted on the box has also been registered.

If a shape is not inherently capable of distinguishing one trader’s product from another’s, then it may not be registrable. This will be the case when the shape of a product is purely functional, such as an inverted ‘U’ shape of an umbrella to shelter its user from rain. Also, if a shape is one which other traders would normally expect to be freely available and which, for the sake of fair competition, they should be at liberty to use, the shape will not be considered inherently adapted to distinguish.28 Where an aspect of shape is designed for market appeal, that shape must be regarded as functional; for example, when a chocolate manufacturer produces chocolates in novelty shapes, such as sea-shells, thereby designing a product on the basis of visual appeal and in doing so adopting contemporary styles and current trends and fashions: see Re Chocolaterie Guylian NV.29 A later attempt by the same Belgian chocolate manufacturer to register seahorse shapes failed in the Federal Court, where Sundberg J concluded that ‘it does not seem to me likely that consumers would conceive of the seahorse shape on Guylian’s

27 (2005) 64 IPR 607; [2005] ATMO 8. 28 See Cadbury Schweppes Pty Ltd & Effem Foods Pty Ltd v Société des Produits Nestlé SA [2003] ATMO 74. 29 (1999) 46 IPR 201; [1999] ATMO 28.

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boxes as a trade mark, so much as simply an example of the novelty shapes that Guylian manufactures’: Chocolaterie Guylian NV v Registrar of Trade Marks.30

ii. Sounds 7.19 There are not many sound marks on the Register. The first sound mark registered in Australia was SPROING, an electronic sound used in a radio commercial for a rubber underlay floor covering.31 Other sound marks since registered include one owned by McCain Foods for the short high-pitched PING sound between the words ‘Ah McCain (“ping”) You’ve done it again’; a Sicilian waltz tune for Dolmio pasta sauces; the ‘Happy Little Vegemites’ tune registered by Kraft Foods; the musical score that introduces Fox Films; and the tune of ‘Greensleeves’ as used by Mr Whippy ice cream vans (for food services).

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iii. Scents 7.20 Scents will sometimes be capable of distinguishing one trader’s product from another’s, although it is rare for them to be registered as trade marks in Australia. While distinctive smells associated with particular items, such as beer and roses, could obviously never be registered by traders selling beer and roses respectively (they would be descriptive), such smells are capable of distinguishing completely unrelated products. Thus, the smell of cinnamon ‘applied to furniture’ and a Eucalyptus scent for golf tees were registered at the time of writing. The function of some products, such as perfumes, is to give off a scent, so the scent itself would therefore not be inherently adapted to distinguish the goods to which they were applied. Other products make use of non-functional scents, in the sense that they are designed to make the product more pleasant or attractive to use, rather than to distinguish the product from other similar products. For example, the lemon fragrance of a dishwashing liquid is unlikely to be seen as an indication of origin, as its use is common to the trade.

F. Marks not inherently adapted to distinguish 7.21 Trade marks that are not inherently adapted to distinguish goods or services are mostly trade marks that consist wholly of a sign that is ordinarily used to indicate: • the kind, quality, quantity, intended purpose, value, geographical origin, or some other characteristic of goods or services; or • the time of production of goods or the rendering of services.32 30 (2009) 258 ALR 545 at 575; 82 IPR 13; [2009] FCA 891. 31 Granted to Pacific Dunlop Ltd. The trade mark is described as ‘the sound of the word “sproing” pronounced such that there is initially a rise in pitch at the “oi” sound, which is then substantially elongated and pronounced with vibrato on the “oing” portion of the word, so as to imitate the sound of a spring reverberating on metal’. 32 Trade Marks Act 1995 s 41(4) note 1.

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The test of inherent distinctiveness is based on the overall impression that the mark creates: Fry Consulting Pty Ltd v Sports Warehouse Inc (No 2).33 Burger King Corporation v Registrar of Trade Marks (1973) 128 CLR 417; 1A IPR 504; [1973] HCA 15 Facts: The applicant ran a take-away food chain in America and was about to commence business in Australia. It applied to register the word WHOPPER as a trade mark in Australia for hamburgers. The Registrar refused to register the mark, and the applicant appealed to the High Court. Decision: The word ‘whopper’ is not inherently adapted to distinguish the applicant’s goods. ‘Whopper’ is an ordinary English word and, when applied to a hamburger, has one clear meaning, namely, that the hamburger is uncommonly large. The word is clearly descriptive of one of the characteristics of the applicant’s goods, namely their size. Another person selling a hamburger larger than normal might, in the ordinary course of business and without any improper motive, wish to use the word ‘whopper’ and, as such, the word should not be registered as a trade mark.34

Some other examples of trade marks refused registration or unlikely to be registered on such grounds are shown in the table below. TABLE 7.2 REFUSAL OF REGISTRATION

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INDICATION

TRADE MARK (SIGN)

DESIGNATED GOODS OR SERVICES

Kind

SHREDDED WHEAT NATURAL 8 PLY

Biscuits35 Knitting yarn36

Quality

CLASSIC PERFECTION LESS

Greeting cards37 Soap38 Pharmaceutical goods39

Intended purpose

WASH AND WEAR QUAFF BREAK-UP

Clothing Wine Cleaning detergents40

Value

BUDGET

Motels

Geographical origin

GREAT WESTERN YORKSHIRE

Sparkling wine41 Metal works42

33 34 35 36 37 38 39 40 41

(2012) 288 ALR 727; 94 IPR 551; [2012] FCA 81. But see 7.25 for the subsequent resolution of this matter. Shredded Wheat Co v Kellogg Co of Great Britain (1939) 57 RPC 137. Re application by JGL Investments Pty Ltd (1989) 15 IPR 349. WN Sharpe v Solomon Bros [1915] 32 RPC 15. Re Joseph Crosfield & Sons Ltd [1910] 1 Ch 130; (1909) 26 RPC 850. Registrar of Trade Marks v Muller (1980) 31 ALR 177; 54 ALJR 513. Re application by S C Johnson & Son Inc (1989) 15 IPR 349; (1989) AIPC 90-595. Thomson v B Seppelt & Sons Ltd (1925) 37 CLR 305; [1925] HCA 40, see 7.21C2. See also Trade Marks Act 1995 s 61(1)(d). 42 Yorkshire Copper Works v Registrar of Trade Marks [1954] 1 All ER 570.

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7.21C1

Marketing and the Law TABLE 7.2 REFUSAL OF REGISTRATION — cont’d INDICATION Other characteristics

Time of production

TRADE MARK (SIGN) CHARM HEAVENLY HEALTH PRESSURE PAK ALL THE COLOURS IN THE WORLD KWIK-KOPY 24 HOUR FITNESS

DESIGNATED GOODS OR SERVICES Stockings43 Lingerie44 Cocoa45 Package with pressurised contents46 Knitwear and clothing47 Printing services48 Health club services49

The reasons for these restrictions on registration are fairly obvious. Words which are directly descriptive of the characteristics, purpose, or virtues of goods or services are unsuitable for trade marks, as registration would prevent other traders from legitimately using common language in connection with their own goods or services. ‘The more apt a word is to describe the goods of a manufacturer, the less apt it is to distinguish them.’50 For example, the operator of the Mackay Airport was unable to register MACKAY AIRPORT as a trade mark for airport services: Re Mackay Airport Pty Ltd.51 Similarly, it would be inappropriate to allow a trader to obtain a monopoly in a place name, when it could be required by other traders to indicate the origin of their goods or services.52 Thomson v B Seppelt & Sons Ltd (1925) 37 CLR 305; [1925] HCA 4053

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7.21C2

Facts: Seppelt had established a winery near a small hamlet called Great Western, in the Western District of Victoria. It adopted the name ‘Great Western’ for its range of sparkling wine. It later sought to register the name as a trade mark for use on wine. Its application was opposed by other vignerons operating in the vicinity of Great Western.

43 44 45 46 47 48 49 50 51 52

Re Keystone Knitting Mills Ltd Trade Mark [1929] 1 Ch 92; (1928) 45 RPC 421. Heavenly Trade Mark [1967] RPC 306. Henry Thorne & Co v Sandow (1912) 29 RPC 440. Samuel Taylor Pty Ltd v Registrar of Trade Marks (1959) 102 CLR 650. Re application by Benetton Group SpA (1989) 14 IPR 188. Kwik Copy Trade Mark [1982] RPC 102. 24 Hour Fitness Inc (2001) 54 IPR 411; [2001] ATMO 121. Yorkshire Copper Works v Registrar of Trade Marks [1954] 1 All ER 570. (2013) 101 IPR 594, [2013] ATMO 17. In fact, s 61 of the Trade Marks Act 1995 provides for opposition to the registration of geographical indications as trade marks, although the opposition must relate to goods for which geographical indication is relevant, for example, for food or wine. 53 See also Yorkshire Copper Works v Registrar of Trade Marks [1954] 1 All ER 570; Clark Equipment Co v Registrar of Trade Marks (1964) 111 CLR 511; 38 ALJR 215; [1964] HCA 55; and Colorado Group Ltd v Strandbags Group Pty Ltd (2007) 243 ALR 127; 74 IPR 246; [2007] FCAFC 184.

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Chapter 7: Registration of Trade Marks Decision: It would be wrong to deprive other traders from using the words ‘Great Western’ for the purpose of indicating the place of origin on the wines they produced. The words denote, according to their ordinary signification, a geographical name and are therefore not adapted to distinguish the wines of Seppelt from those produced by other vignerons in the district.

However, a word will not be treated as a geographical name simply because some place on the earth’s surface has been called by it. The approach generally adopted is to ascertain whether the Australian public would recognise a name as having geographical connotations. Some names, although of a geographical nature, might be treated as fanciful and be registered as trade marks, for example, NORTH POLE for bananas.54 The rationale is that an honest competitor would simply not consider using such a name in the course of trade to indicate their bananas originated from the North Pole. In practice, this means that the Registrar often will not consider a mark to be inherently capable of distinguishing goods or services from others and will reject the application.

G. Marks only partially inherently adapted to distinguish

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7.22 If the Registrar of Trade Marks concludes that a trade mark is to some extent inherently adapted to distinguish the designated goods or services from those of other traders, but is not sufficiently inherently adapted to so distinguish, the Registrar will consider whether the mark is in fact capable of distinguishing the applicant’s goods or services from those of other persons,55 taking into account the combined effect of: • the extent to which the mark is inherently adapted to distinguish; • the use or intended use of the mark; and • any other circumstances. If it is, the mark will be accepted for registration. Some forms of trade mark are usually not so obviously capable of distinguishing one trader’s goods or services from others, such as slogans and colours. However, such marks may be registrable.

i. Slogans 7.23 While some marketing slogans may be unique and inventive, most make use, at least in part, of commonplace and/or descriptive words. As such, slogans often have a low inherent adaptation to distinguish. However, provided the mark is not entirely lacking in inherent adaptation, other factors may exist which justify registration. For example, the slogan ‘Dogs Go Wacko For Schmackos’

54 Per Kitto J in Clark Equipment Co v Registrar of Trade Marks (1964) 111 CLR 511 at 516; 38 ALJR 215; [1964] HCA 55. 55 Trade Marks Act 1995 s 41(4).

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Marketing and the Law

has been registered for pet food. An application to register the slogan ‘Make It A Blockbuster Night, Tonight’ by a trader in the retail video rental market has also been successful, despite the slogan’s semi-descriptive nature. The Trade Marks Office formed the view that, due to the extensive use made of the slogan by the applicant, on the balance of probabilities, the slogan would come to distinguish the goods and services of the applicant: Blockbuster Entertainment Inc v Civic Video Pty Ltd.56 Along similar lines, the slogans ‘Happiness Is A Cigar Called Hamlet’ (for cigars) and ‘Australians wouldn’t give a Castlemaine XXXX for anything else’ (for beer) have been registered in the United Kingdom. By way of contrast, see Austereo Pty Ltd v DMG Radio (Australia) Pty Ltd,57 where an application to register the words ‘sounds different’ by the Nova radio station was refused.

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ii. Colours 7.24 Provided the colour (or colours) applied to or used in connection with goods or services is (or are) capable of distinguishing the goods or services of a particular trader from others, registration of a colour as a trade mark is possible. Nevertheless, it will invariably be no easy task to register a colour as a trade mark, as such marks generally have a low level of inherent adaptation to distinguish. Most traders colour their products in order to make them more attractive to customers (rather than to indicate origin). In some cases it will clearly be inappropriate to register a colour as a trade mark, as the colour may be descriptive or functional. For example, a manufacturer of a mint-flavoured mouthwash should not be able to register the colour green (mint being naturally green and thus descriptive of the product), as competitors would have to use other inappropriate colours such as red or yellow for their mint-flavoured mouthwashes. It would also be wrong to allow Coca-Cola to register the colour ‘reddish-brown’ for its cola beverages, since cola is naturally this colour due to the effect of caramel in the ingredients mix. The public has become accustomed to this appearance, so a cola drink of a different colour would be difficult to sell. The colour of the drink is therefore functional and entirely unsuitable as a trade mark. Despite these observations, registering even a single colour is possible. In Philmac Pty Ltd v Registrar of Trade Marks,58 Mansfield J suggested that a single colour would be inherently registrable, provided: • the colour does not serve a utilitarian function, that is, it does not physically or chemically produce an effect, such as light reflection or heat absorption; • the colour does not perform an ornamental function, that is, it does not convey a recognised meaning such as the denotation of heat or danger or environmentalism;

56 [1999] ATMO 25. 57 (2004) 209 ALR 93; 61 IPR 257; [2004] FCA 968. 58 (2002) 56 IPR 452; [2002] FCA 1551, see 7.26C.

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• the colour does not serve an economic function, that is, it is not the naturally occurring colour of a product; and • the colour mark is not sought to be registered in a market in which there is a proven competitive need for the use of the colour, that is, it is not likely to be chosen by other properly motivated traders for use in connection with their goods or services. An example of a single colour registration obtained under what was then s 41(5) of the Trade Marks Act, now s 41(4), is a mark owned by Eagle Boys Dial-A-Pizza consisting of a ‘pink glow created by a row of pink coloured lights extending along a fascia of a building’ in which food and beverages are sold. Nevertheless, it will clearly be easier (although still difficult) to register a combination of colours, especially if arranged in a particular fashion, as a trade mark. For example, the colours RED and WHITE arranged in a particular way on motor vehicles has been registered for taxi transport services.

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H. Marks distinguished through extensive use 7.25 If the Registrar reaches the conclusion that a mark is not to any extent inherently adapted to distinguish, there is still another step that can be taken to obtain registration. If the applicant can establish that the trade mark, through extensive use in Australia, does distinguish the designated goods or services as those of the applicant, it will be eligible for registration: Trade Marks Act s 41(3). In Burger King Corporation v Registrar of Trade Marks,59 Burger King began operating in the Australian marketplace under the name Hungry Jacks. Despite its inability to register WHOPPER as a trade mark, it still elected to use the name ‘Whopper’ for its hamburgers. A significant portion of the public, because of the extensive use of the word ‘whopper’ in the selling and advertising of hamburgers by Burger King, eventually came to recognise ‘Whopper’ as a brand name associated with Burger King. At that point, the mark reached the stage when it factually distinguished Burger King’s hamburgers from the hamburgers of other persons, and when a new application was submitted, WHOPPER was registered as a trade mark.60

i. Shapes and colours 7.26 The difficulty of registering marks such as functional shapes and colours as trade marks was noted in 7.18 and 7.24. Nevertheless, extensive use of a particular shape or colour to indicate the source of a product might lead to a shape or colour being registered pursuant to s 41(3) of the Trade Marks Act. An application to register will usually need to be supported by survey evidence with a view to convincing the Trade Marks Office that a shape or colour does in fact 59 (1973) 128 CLR 417; 1A IPR 504; [1973] HCA 15, see 7.21C1. 60 See Trade Mark Number 751333. On similar grounds, the word ‘beautiful’ has been registered as a trade mark for perfume: Re Estee Lauder Cosmetics Ltd (2000) 50 IPR 131; [2000] ATMO 46.

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distinguish the applicant’s goods or services from similar goods or services sold in the marketplace. For example, when Nestlé lodged an application to register the shape of the Kit Kat chocolate-coated wafer biscuit bar (described as two or four bars attached to one another by a thin base), it was successfully opposed by a competitor (Aldi) on the grounds that the shape was functional, one that allowed the individual fingers of a Kit Kat bar to be snapped off. However, on appeal to the Federal Court it was accepted (on the basis of a survey which indicated that 77% of the public identified the shape as that of a Kit Kat bar), that the shape had acquired distinctiveness pursuant to what was then s 41(6), now s 41(3), of the Trade Marks Act: Société des Produits Nestlé SA v Aldi Stores.61 If using survey evidence to register a colour, the survey, for example, might ask consumers questions such as ‘What manufacturer makes pink insulation?’ and ‘Do you identify the product at the point of sale on the basis of this colour?’, with a view to establishing almost universal recognition of the supplier, ACI, as the relevant manufacturer of pink insulation. In other words, the colour must have acquired a secondary meaning as an indicator of trade source for members of the public. In such a case, ACI might be successful in registering the colour pink for home insulation products.62 Philmac Pty Ltd v Registrar of Trade Marks (2002) 56 IPR 452; [2002] FCA 1551 7.26C

Facts: Philmac applied to register the colour terracotta as a trade mark for the polypipe fittings and inserts it produced for use with rural irrigation pipes. The Registrar refused the application. Philmac appealed to the Federal Court.

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Decision: The colour terracotta was not inherently adapted to distinguish the applicant’s polypipe fittings and inserts from those of other manufacturers. The range of colours available to an honestly motivated trader is limited. The colour terracotta, or any deceptively similar shade of terracotta, might naturally and legitimately occur to another trader as a choice of colour for application to these types of fittings and inserts. Nevertheless, although not inherently adapted to function as a trade mark, Philmac had used the colour terracotta on its polypipe fittings and inserts to such an extent (prior to filing its application) that it had become distinctive in fact of Philmac’s products. This factual distinctiveness was satisfied through sales of approximately 2.7 million units per annum over a period beginning in 1995, which gave Philmac a market share of around 70%. Philmac had started using the terracotta colour to distinguish its products from those of competitors, who generally produced all black fittings and inserts. Importantly, the colour terracotta was not a naturally occurring colour for plastic fittings and inserts, in contrast to terracotta roof tiles and garden pots. An order was made that the trade mark be registered.

On the basis of similar criteria, MHCS (Veuve Clicquot) has registered the colour ORANGE in Australia for use on labels attached to its bottles of champagne, 61 [2010] FCA 218. 62 See Re Owens-Corning Fiberglass Corp 774 F 2d 1116 (Fed Cir 1985).

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Chapter 7: Registration of Trade Marks

and Yellow Cabs (Queensland) Pty Ltd has successfully registered the colour ORANGE when applied to the body of a taxi-cab. In contrast, BP has failed to obtain registration for the colour GREEN as used on the exterior of its service stations. Its application was opposed by Woolworths, who used the colours red, green, and white as part of the get-up for its service stations. The Full Federal Court found that, on the evidence, the green colour trade mark applied for by BP had not become factually distinctive through use. Although survey evidence presented by BP showed that green was widely recognised as being part of BP’s colour scheme, in the court’s view it did ‘not lead to the conclusion that green alone or green predominantly with other unspecified colours has been used as a trade mark’. The evidence showed the colour yellow remained ‘recognisably part of’ BP’s corporate colours, albeit subsidiary to the colour green: Woolworths Ltd v BP plc (No 2).63 BP applied to the High Court for special leave to appeal against this decision, but failed: BP plc v Woolworths Ltd.64 BP has registrations for its green and yellow petrol station.65 Like BP, Cadbury also has been involved in an extended battle in Australia to try to register a colour as a trade mark — in this instance a shade of the colour PURPLE for chocolate. When it first applied for registration, it failed: see Re application by Cadbury Ltd,66 where it was held that the colour purple used by Cadbury on its chocolate products had not (at the date of application) acquired a secondary meaning in addition to its ordinary meaning of being an attractive packaging for confectionery. For instance, Cadbury had not used the colour in a trade mark sense by utilising slogans such as ‘When you see the purple wrapper, you know it is Cadbury’s’ or ‘Think purple, think Cadbury’s’. Nor had it identified purple as a trade mark on the packaging itself.67 Cadbury subsequently lodged an amended application, but it was opposed by competitors, including Darrell Lea. The matter was referred to the Federal Court for determination, but the hearing was eventually suspended until the resolution of a passing off dispute between the same parties over the use of the colour purple: see 6.31. Although the passing off dispute was ultimately resolved in 2009 in favour of Darrell Lea, the trade mark dispute was settled. Darrell Lea withdrew its opposition and Cadbury was finally granted trade marks for several shades of purple by the Office of Trade Marks. However, this does not mean that Cadbury ‘owns’ the colour purple per se, rather it ‘owns’ the exclusive right to use certain shades of purple for use in relation to ‘block chocolate and boxed chocolate’. The settlement reached allows Darrell Lea to use a different shade of purple in its stores, for packaging and on staff uniforms. 63 64 65 66 67

(2006) 235 ALR 698; 70 IPR 25; [2006] FCAFC 132. [2007] HCA Trans 249. Trade Mark Number 728555. (2002) 55 IPR 561; [2002] ATMO 56. See also Re Minnesota Mining & Manufacturing Co [2002] ATMO 8, in which Minnesota Mining & Manufacturing Co was denied registration of the colour ‘canary yellow’ in respect of POST-IT adhesive stationery notes.

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This was followed up by Mars Australia Pty Ltd (formerly Effem Foods Pty Ltd) v Société des Produits Nestlé SA,68 where the Federal Court allowed Mars to register its WHISKAS PURPLE to identify cat food. In the hearing, Mars acknowledged that registration of WHISKAS PURPLE did not prevent its primary use as a colour for trivial, descriptive, or other non-trade mark use by competitors; for example, to indicate a particular variety in a product range. Frucor Beverages was unsuccessful in its attempt to register the colour green for its ‘V’ line of energy drinks, in part because the Federal Court found that the green colour of the packaging functioned more as an indicator of the variety of the energy drink, and as such was descriptive of the product, rather than functioning as a trade mark to distinguish Frucor’s energy drinks from those of other traders.69 TABLE 7.3 EXAMPLES OF COLOURS REGISTERED IN AUSTRALIA7071727374 COLOUR

GOOD/SERVICE

REGISTERED OWNER

LIGHT BLUE

for metal building frames

Bluescope steel70

RED applied to the sole of a shoe

for ladies high-heeled shoes

Christian Louboutin71

PALE BLUE

for jewellery and packaging

Tiffany and Company72

SAPPHIRE WITH SILVER SPECKS applied to kitchenware

for pots, pans and saucepans

Danoz Direct73

PINK

for laundry bleaching preparations

Reckitt Benckiser74

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ii. Surnames 7.27 Another example of trade marks which might be registered under s 41(3) of the Trade Marks Act is surnames. Surnames are not specifically dealt with by the Trade Marks Act. However, the fact remains that common surnames are generally less suited to performing the function of a trade mark; that is, to distinguish one trader’s goods or services from another.75 Many people share the same surname 68 69 70 71 72 73 74 75

[2010] FCA 639. Frucor Beverages Ltd v Coca Cola Company (2018) 358 ALR 336; 132 IPR 318. Trade Mark Number 1157536. Trade Mark Number 1352410. Trade Mark Number 1414010. Trade Mark Number 1517365. Trade Mark Number 1194047. Rare surnames may be easier to register, for example, Bogart (for perfumes or cosmetics): Amco Wrangler Ltd v Jacques Konckier (1978) 10 IPR 376; and Cassini (for clothing): Cassini v Golden Era Shirt Co Pty Ltd (1985) 6 IPR 247; (1986) AIPC 90-263.

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and ought to be entitled to use it on their goods or services. Thus, it may be difficult to establish that common surnames have any inherent adaptation to distinguish. However, it is possible for surnames to satisfy registration requirements after long and extensive use. TABLE 7.4 EXAMPLES OF SURNAMES REGISTERED UNDER THE TRADE MARKS ACT

SURNAME REGISTERED

GOOD/SERVICE

HOLDEN

for motor vehicles

HEINZ

for baby foods

CADBURY

for chocolate

KELLOGG

for breakfast cereal

Even if a surname is registered as a trade mark, a person will not infringe that mark if the person is using his or her own name in good faith: Trade Marks Act s 122(1)(a).

iii. Place names

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7.28 As with surnames, well-known geographical or place names are generally not capable of distinguishing one trader’s goods or services from another’s. Many people may operate a business from a particular location and ought to be entitled to refer to that location on or in connection with their goods and services. Despite the general unsuitability of geographical or place names for trade marks, extensive use of some geographical names may lead to registration pursuant to s 41(3) of the Trade Marks Act. Blount Inc v Registrar of Trade Marks [1998] FCA 440 Facts: The applicant, Blount Inc, applied to register the following trade mark, for use on various goods, including chainsaws, hand tools, and machinery:

The application was rejected by the Registrar of Trade Marks on the grounds that Oregon is a US state, and a state known for its forestry products and instrument-making industry, which meant that other manufacturers and traders of goods similar to Blount’s were highly likely to want to use the word ‘Oregon’ to show the origin of their goods. As such, the mark was not capable of distinguishing the applicant’s goods from other traders’ goods. Blount appealed against the Registrar’s decision, relying upon its extensive use of the ‘Oregon’ mark in Australia. It presented evidence in the Federal Court which showed that Blount had sold chainsaw parts, accessories, and hand tools bearing the ‘Oregon’ brand in Australia since the 1950s. During that time, Oregon products had been substantially promoted and advertised to the trade and householders, with the result that everyone concerned with chainsaws and related equipment recognised and used the word ‘Oregon’ as a brand for such products.

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Marketing and the Law Decision: The court concluded that the word ‘Oregon’ was not inherently adapted to distinguish the applicant’s goods from those of other traders on the grounds that the word ‘Oregon’ was a geographical name (being the name of a US state) and a descriptive term (being a common name in Australia for timber from the Douglas Fir). However, the court accepted that, because of Blount’s extensive use of the trade mark ‘Oregon’ before its application to register had been filed, the trade mark did in fact distinguish the goods to which it was applied. The issue was entirely one of fact. On the evidence, the mark did distinguish Blount’s goods from similar goods of other traders and was therefore capable of distinguishing such goods. The application to register was accepted.

It should be noted that even if a geographical or place name is registered as a trade mark, a person will not infringe that mark if the person in good faith uses the mark to indicate the person’s place of business: Trade Marks Act s 122(1)(a); or the geographical origin of the person’s goods or services: Trade Marks Act s 122(1)(b); see Angoves Pty Ltd v Johnson.76

Other registration requirements

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7.29 Apart from the main requirement that a trade mark must be capable of distinguishing an applicant’s goods or services from those of other persons, there are several other grounds for refusing registration of a trade mark. Registration will be refused if the trade mark: • consists of or contains prohibited signs; • cannot be represented graphically; • is scandalous; • is contrary to law; • is likely to deceive or cause confusion; or • is too similar to another registered trade mark.

A. The trade mark consists of or contains prohibited signs 7.30 Certain signs are ineligible for use as a trade mark, for example, the words ‘patent’, ‘registered’, ‘registered design’, ‘copyright’, or symbols to the same effect; and a representation of a flag or seal of the Commonwealth, state, or territory: Trade Marks Act s 39 and Trade Mark Regulations reg 4.15.

B. The trade mark cannot be represented graphically 7.31 An application for the registration of a trade mark must be rejected if the trade mark cannot be represented graphically: Trade Marks Act s 40. It is essential that a system which allows traders to assert rights to registered trade marks allows other traders to ascertain the scope of existing rights. Usually other traders will search 76 (1982) 43 ALR 349, see 7.56C1.

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the Register to obtain such information. Thus, for the purposes of registration, trade marks must be represented in a form which can be recorded and published. Graphic representations can be achieved by writing, drawing, or by graph. For example, a three-dimensional mark might be portrayed by one or more drawings or photographs and/or described in words. Perspective or isometric drawings are preferable for all shape marks, showing all features of the sign. However, the requirement that marks must be represented graphically would appear to create problems from a practical viewpoint when registering sensory trade marks, like sounds or scents, even though both may effectively indicate the trade connection of certain goods or services. Some assistance, however, is given by the Regulations:77 If a trade mark for which registration is sought contains or consists of a sign that is a colour, scent, shape, sound or an aspect of packaging, or any combination of those features, the application for registration of the trade mark must include a concise and accurate description of the trade mark.

If the Registrar reasonably believes that the description or representation of a trade mark in an application for registration of the trade mark does not:78

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(a) demonstrate the nature of the trade mark sufficiently; or (b) show each feature of the trade mark sufficiently; to permit proper examination of the trade mark, the Registrar may require the applicant to give to the Registrar: (c) a description, or further description, of the trade mark; and (d) a specimen of the trade mark.

The application form to register a trade mark produced by the Trade Marks Office indicates that a clear description of a sign (in the form of diagrams and/or writing) consisting of a shape, scent, sound, or colour can be used in lieu of a graphic representation. For instance, sound trade marks can be represented by a precise description of the sound. The application should include the graphic representation of the trade mark (for example, ‘clip, clop, moo’) and a precise and accurate description of the trade mark (for example, ‘the trade mark consists of the sound of two steps taken by a cow on pavement, followed by the sound of a cow mooing as rendered in the recording accompanying the application’).79 If a trade mark consists of a tune or contains music, it can be represented by musical notation. Sound marks must also be recorded and filed when an application to register such a mark is made. Scents can also be represented by a precise verbal description. The trade mark should be represented graphically (for example, a ‘high impact fresh floral fragrance reminiscent of plumeria blossoms’ — a fragrance emanating from the frangipani tree) and accurately described (the ‘floral fragrance of the frangipani tree blossom as applied to embroidery yarn’).80 Such a mark was registered in 77 78 79 80

Trade Mark Regulations reg 4.3(7). Trade Mark Regulations reg 4.3(8). IP Australia, Trade Marks Office Manual of Practice and Procedure, above n 7, pt 21 at 6.1. Ibid, at 7.1.

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the US case Re Clarke,81 the first fragrance mark in history. The Australian Trade Marks Office has formed the view that the use of a verbal or written description is currently the only practical way of representing a scent that would actually convey a meaning to the ordinary person examining the Register for the purpose of comparison. For example, using the results of analytical techniques to represent a scent would convey little or nothing to the ordinary person.82 Nevertheless, it is clear that the current system may cause problems when it comes to defining precisely the extent of the right, once such marks have been registered.83

C. The trade mark is scandalous 7.32 A trade mark application will be rejected if it contains or consists of scandalous matter: Trade Marks Act s 42(a). Whether or not a trade mark is scandalous should be evaluated in the context of how an ordinary person would react.84 While an application for strong profanity would likely be rejected, NUCKIN FUTS was registered in 2012 for nuts, dried fruits, and snacks. Interestingly the registration was endorsed to say ‘it is a condition of registration that the trade mark will not be marketed to children’.85

D. Use of the trade mark would be contrary to law 7.33 A trade mark application will be rejected if its use would be contrary to law: Trade Marks Act s 42(b). This does not include common law (such as passing off),86 but can capture clear breaches of legislation.

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TABLE 7.5 EXAMPLES OF TRADE MARKS WHICH MUST BE REJECTED DUE TO USE BEING CONTRARY TO LAW ITEM Olympic symbol Australian flag AFC Asian Cup 2015 Cricket World Cup 2015 Gold Coast Commonwealth Games 2018 Red Cross ANZAC

LEGISLATION Olympic Insignia Protection Act 1987 (Cth) Flags Act 1953 (Cth) Major Sporting Events (Indicia and Images) Protection Act 2014 (Cth) Geneva Conventions Act 1957 (Cth) War Precautions Repeal Act 1920 (Cth)

81 17 USPQ 2d 1238 (TTAB 1990). 82 IP Australia, Trade Marks Office Manual of Practice and Procedure, above n 7, pt 21 at 7.1. 83 D Lyons, ‘Sounds, Smells & Signs’ [1994] 12 EIPR 540. See also H Burton, ‘The UK Trade Marks Act 1994: An Invitation to an Olfactory Occasion’ [1995] 8 EIPR 379. 84 Nevertheless, it has been held in Australia that ‘crudity’ or ‘bad taste’ do not constitute sufficient grounds for refusal: see, for example, Cosmetic, Toiletry and Fragrance Association Foundation v Fanni Barns Pty Ltd (2003) 57 IPR 594, [2003] ATMO 10 (LOOK GOOD+FEEL GOOD=ROOT GOOD accepted for cosmetics, sexual hygiene products, and clothing). 85 Trade Mark Number 1408134. 86 This may be relevant under s 43 of the Trade Marks Act: see 7.34.

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The Tobacco Plain Packaging Act 2011 (Cth) requires tobacco to be sold in plain packaging. Enacted to discourage the use of tobacco products, the Tobacco Plain Packaging Act severely limits the use of trade marks on tobacco products and otherwise regulates their display and appearance. Despite this, an application for a trade mark for tobacco will not be rejected as being contrary to law under s 42(b) of the Trade Marks Act.87

E. The trade mark is likely to deceive or cause confusion 7.34 A trade mark will not be registered if it is likely to deceive or cause confusion because of some connotation conveyed by the mark: Trade Marks Act s 43. For example, a mark may deceive or confuse in the sense of indicating a quality or origin that the goods do not have. Re Yanx Registered Trade Mark; Ex parte Amalgamated Tobacco Corp; Sub nom Menzala Cigarette Co Ltd (1951) 82 CLR 199; 1B IPR 504 Facts: An English importer of cigarettes sought to register the trade mark YANX for a brand of cigarettes made in the United Kingdom. The Trade Marks Office refused to register the mark on the grounds that it was deceptive and misleading. The applicant appealed.

7.34C1

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Decision: In its ordinary use the word ‘Yankee’ or ‘Yank’ has come to mean a citizen of the US and ‘Yanx’ means such citizens in the plural. The word ‘Yanx’, which is simply a misspelling of ‘Yanks’, is so conspicuously displayed on the label that its use alone would suggest to persons buying the cigarettes that they were American cigarettes, and this suggestion is heightened by its combination with the stars and stripes which are emblematic of the national flag and song of the US. The words ‘Made in England’ are not very conspicuous on the label and could easily be overlooked. The label is therefore likely to deceive the public and should not be registered.

A mark may also deceive or confuse in the passing off sense, by suggesting an association between goods or services that does not exist. Such confusion may arise even when the mark is used in respect of different categories of goods or services.88 If so, registration will be refused. Re Players Trade Mark [1965] RPC 363 Facts: The applicant sought to register the word PLAYERS for confectionery cigarettes. The mark had already been registered for tobacco goods. Registration was refused and the applicant appealed. Decision: Given the extensive reputation of the trade mark PLAYERS for tobacco products and the similar appearance of the goods, use of the mark on confectionery cigarettes would be liable to deceive and cause confusion. The decision to refuse registration was upheld.

87 Tobacco Plain Packaging Act 2011 s 28(2). 88 See Southern Cross Refrigerating Co v Toowoomba Foundry Pty Ltd (1954) 91 CLR 592; 1A IPR 465.

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Marketing and the Law

F. The trade mark is too similar to another registered mark 7.35 A trade mark will not be registered if it is ‘substantially identical’ or ‘deceptively similar’ to a registered trade mark for ‘similar’ or ‘closely related’ goods or services: Trade Marks Act s 44. Each of these concepts is discussed below.

i. Substantially identical 7.36 The courts use a side by side test to determine whether marks are substantially identical based upon appearance; that is, by using the eye. The similarities and differences are assessed with regard to the essential features of the marks. If they differ only in inessential respects, then they are substantially identical. This is discussed further at 7.48.

ii. Deceptively similar 7.37 A trade mark is taken to be deceptively similar to another trade mark if it so nearly resembles that other trade mark that it is likely to deceive or cause confusion: Trade Marks Act s 10. The relevant legal test is discussed further at 7.48.

iii. Similar goods or services

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7.38 Goods or services are similar to other goods or services if they are the same or of the same description as the other goods or services: Trade Marks Act s 14. In Re Players Trade Mark,89 despite the fact that tobacco cigarettes and confectionery cigarettes are often sold in the same outlets, the court felt this was counteracted by the fact that the uses and the nature of the two products were clearly quite different and could not be said to be goods of the same description. This issue is discussed at 7.49.

iv. Closely related goods or services 7.39 Sometimes goods will be ‘closely related’ or allied with particular services and vice versa; for example, take-away food services and certain food items.90 This issue is discussed at 7.51.

When can a Sign be Registered as a Trade Mark? 7.40 Based on the discussion above, the following decision tree illustrates when a sign can be registered as a trade mark. 89 [1965] RPC 363, see 7.34C2. 90 See Rowntree plc v Rollbits Pty Ltd (1988) 10 IPR 539, see 7.51C.

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Chapter 7: Registration of Trade Marks FIGURE 7.1 WHEN CAN A SIGN BE REGISTERED AS A TRADE MARK? NO

Is the mark a sign and being (or intended to be) used as a trade mark? YES Is the mark inherently capable of distinguishing one product from another?

NO

Is the mark capable of distinguishing one product from another due to extensive use by the applicant?

NO

Is the mark to some extent inherently adapted to distinguish? If yes, will it distinguish through use or other circumstances?

NO

YES

YES Is the trade mark scandalous or illegal?

YES

NO Is the use of the trade mark likely to deceive or cause confusion?

YES

NO Is the trade mark substantially identical with or deceptively similar to a registered trade mark for similar or closely related goods or services?

YES

NO Can the mark be depicted graphically?

NO

YES THE MARK WILL USUALLY BE REGISTRABLE

THE MARK IS NOT REGISTRABLE

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Disclaiming Rights to Exclusive Use 7.41 Sometimes a trade mark will contain matter which is not capable of distinguishing, such as descriptive words; for example, the word BIG in Big Mac for hamburgers — or the words PRESSURE PAK in Mortein Pressure Pak on packages containing liquid under pressure (such as fly spray). Under the previous trade marks legislation,91 the Registrar of Trade Marks would only register such marks on the condition that the applicant agreed not to claim rights to the exclusive use of specific components of the mark; for example, the descriptive words ‘big’ or ‘pressure pak’ in the above examples. There is no requirement for entry of disclaimers as a condition of registration under the Trade Marks Act. Instead, an applicant for registration may voluntarily disclaim the exclusive right to use part of the trade mark, which will be duly entered on the Register if the trade mark is accepted for registration: Trade Marks Act s 74. While this step does have the advantage of overcoming the time and expense previously incurred by the Trade Marks Office in applying the compulsory disclaimer provision, the provision did at least provide certainty and clarity of rights arising from registration. It is now likely that there will be more conflicts 91 Trade Marks Act 1955 (Cth).

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between traders over the use of certain signs in the marketplace. An owner of a trade mark may consider that registration grants exclusive rights to all components of the mark, when in fact this will not always be the case. For example, registration of ‘Coca-Cola’ protects the composite mark, but does not prevent other traders from using the term ‘cola’, a word describing a type of drink. If a disclaimer has been registered in respect of a part of a registered trade mark, such as the word ‘big’ in the registered trade mark BIG MAC owned by McDonald’s, another trader does not infringe the trade mark by using that part of the trade mark: Trade Marks Act s 122(2). Thus, a take-away food outlet advertising that its ‘hamburgers are BIG’ would not infringe the BIG MAC trade mark.

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Opposition to Registration 7.42 Once a trade mark has passed the examination stage and been accepted for registration, but before it proceeds to registration, another trader can oppose a trade mark application. Any grounds which the Trade Marks Office can use to refuse to register a trade mark, can also be utilised in such opposition proceedings, except the ground that the trade mark cannot be represented graphically: Trade Marks Act s 57. These grounds were discussed at 7.10–7.39, and include: • the mark is not a sign; • the mark does not distinguish the relevant goods or services; • the mark consists of or contains prohibited signs; • the mark is scandalous; • the mark is contrary to law; • the mark is likely to deceive or cause confusion if used; • the mark is substantially identical with or deceptively similar to a registered trade mark for similar or closely related goods or services. The following cases involve opposition proceedings where some of these grounds were relied on. McDonald’s Corporation v Lubowski [2004] ATMO 5692 7.42C1

Facts: The applicant (Lubowski) applied to register the word mark MCCHINA for restaurant services providing Chinese food and other Asian food (in Class 42). The McDonald’s Corporation opposed the proposed acceptance on several grounds, one being that the use of the mark would be likely to mislead or cause confusion. It was the practice of McDonald’s to invent trade marks for use in relation to food and beverages by combining the prefix MC with words 92 See also McDonald’s Corporation v Bellamy (2004) 62 IPR 133; (2004) AIPC 91-995, where McDonald’s successfully opposed registration of MCBABY as a trade mark. In Scotch Whisky Association v De Witt (2008) 75 IPR 280; [2008] FCA 73, the trade mark GLENN OAKS was allowed to be registered for some spirits, but was not allowed to be used on whisky not emanating from Scotland because of the Scottish connotations suggested by the word ‘glen’. Consumers might be misled into thinking that the whisky was Scottish in origin.

298

Chapter 7: Registration of Trade Marks describing or alluding to the nature of goods or services. McDonald’s was the owner of 25 word marks consisting of the prefix MC with a word or words with a descriptive tinge, and it extensively used and promoted these trade marks in Australia. Decision: The trade mark MCCHINA is contextually deceptively similar to the existing trade marks of McDonald’s when considered in relation to Chinese food. Given the extensive reputation of McDonald’s trade marks and its history of offering ‘ethnic-style’ food for sale as part of special promotions, a substantial number of persons would be likely to regard MCCHINA as the sort of trade mark McDonald’s would use if it were to provide take-away Chinese food. Therefore, use of MCCHINA by the applicant in connection with a take-away Chinese food restaurant is likely to result in confusion, as a reasonable number of persons will be in doubt as to whether the services are provided by McDonald’s. It was held that the mark should not be registered.

Coca-Cola Company v The Big Australian (Australia) Pty Ltd [1999] ATMO 5893 Facts: The Big Australian (the applicant) applied to register the word mark SOLA COLA for soft drinks and fruit juices (in Class 32). The Coca-Cola Company opposed the registration of this mark on the ground that the mark was substantially identical with or deceptively similar to its registered trade marks COCA-COLA and SOLO, which were registered for similar goods.

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Decision: Substantially identical trade marks: In considering whether trade marks are substantially identical, they should be compared side by side, noting the similarities and differences, especially with regard to the essential features of the marks, and the total impression of resemblance or dissimilarity that emerges from the comparison. • Coca-Cola v Sola Cola: The differences between COCA and SOLA are both visually and aurally striking. Placed side by side, only a very careless or stupid person could confuse these marks. Coca-Cola and Sola Cola are not substantially identical. • Solo v Sola Cola: Placed side by side, the marks SOLO and SOLA COLA have some similarity, but not of sufficient magnitude to find that the marks are substantially identical. The first three letters of each mark are identical, but the similarity ends there. One mark is for one word and the other for two words; one mark has a dictionary meaning and the other does not; and the aural differences are substantial. The marks are not substantially identical. Deceptively similar trade marks: The test for deceptive similarity is centred upon the impression based on an imperfect recollection of one mark when the two marks to be compared are not seen side by side. In making an assessment, the court should consider the effect of careless pronunciation and speech on the part of both buyers and sellers. • Coca-Cola v Sola Cola: Given that the word ‘cola’ is generic on cola goods, the marks are not deceptively similar. Although the two words COCA and SOLA share common vowels in the same locations in their four letters, the pronunciation and appearance of the words are very 93 See also Effem Foods Pty Ltd v Wandella Pet Foods Pty Ltd (2006) 69 IPR 243; [2006] FCA 767, where the brand name ‘Whackos’ was found to be deceptively similar to the registered trade mark ‘Dogs Go Wacko for Schmackos’ (both marks being used for pet food). Contrast Kingswood Distillery Pty Ltd v Guinness United Distillers & Vintners (Australia) Ltd (2002) AIPC 91-829; [2002] ATMO 78, where the trade marks LEMON RUSKI and LIMONSKY were held not to be deceptively similar; and Torpedoes Sportswear Pty Ltd v Thorpedo Enterprises Pty Ltd (2003) 204 ALR 90; 59 IPR 318; [2003] FCA 901.

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7.42C2

Marketing and the Law different. COCA-COLA and SOLA COLA provide quite different aural presentations. Even allowing for rather lazy speech, the sounds are sufficiently different to enable differentiation by the average purchaser or seller. Similarly, differences in the visual impressions are sufficiently marked to ensure that deception and confusion are readily avoided. • Solo v Sola Cola: Although SOLO is actually used on lemon-flavoured soft drinks in the marketplace, the registration of the word for use on soft drinks in general means that the possible use of the mark SOLO on cola drinks has to be considered. On such drinks, the word cola is simply a generic description. The general public would request such goods as SOLO cola and SOLA COLA. Aurally, these requests would be very similar. The only difference lies in the vowel ‘o’ or ‘a’ at the end of the first word. These vowel sounds could readily be mispronounced or misheard. The first part of each word, ‘sol’, is identical. The visual similarity of SOLO and SOLA may also provide some difficulties, particularly to a younger child or customer with a measure of thirst, given that the goods are not costly. The marks SOLO and SOLA COLA are deceptively similar. The opposition was successful.

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Another common form of dispute arises from the registration of logos that are alleged to be confusing, or deceptively similar, to an existing mark. For example, the Victorian Dairy Industry Authority successfully opposed the application by McDonald’s of its ‘M’ logo for milkshakes and prepared coffee on the grounds that the mark was too similar to its ‘Big M’ logo and would cause confusion in the marketplace.94 The respective marks involved were as follows:

Some other opposition case examples where the courts decided that the trade marks were not deceptively similar or confusing, and upheld the decision to register, are as follows.

94 Re application by McDonald’s Corporation (1986) 9 IPR 509.

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Chapter 7: Registration of Trade Marks TABLE 7.6 TRADE MARKS HELD NOT TO BE DECEPTIVELY SIMILAR OR CONFUSING95 REGISTERED MARK

OPPOSED MARK

Pacific Dunlop v Bonny

Dunlop logo

Bonny logo

Oroton Pty Ltd v Kovac

Oroton logo

Bush Collection logo

Nike International Ltd v Champion Socks Pty Ltd

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Nike logo

Nile logo

Other grounds that can be used to oppose registration include: • the applicant is not the owner of the mark: Trade Marks Act s 58; • the opponent’s earlier use of a similar trade mark: Trade Marks Act s 58A; • the applicant does not intend to use the mark: Trade Marks Act s 59; • the mark is substantially identical with or deceptively similar to another mark which, although unregistered, had acquired a reputation in Australia in relation to the relevant goods or services prior to the registration (or proposed registration) date, so that use of the mark applied for would be likely to deceive or cause confusion in the marketplace: Trade Marks Act s 60; • the mark contains or consists of a false geographical indication: Trade Marks Act s 61; • the applicant has relied on documentation containing materially false evidence or representations: Trade Marks Act s 62; and • the application was made in bad faith: Trade Marks Act s 62A.

95 Pacific Dunlop v Bonny (1995) 31 IPR 511; Oroton Pty Ltd v Kovac (1994) 31 IPR 145; Nike International Ltd v Champion Socks Pty Ltd [2001] ATMO 117.

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The Sizzler case concerned the s 58 ground of opposition concerning ownership of a trade mark. Sizzler Restaurants International v Sabra International Pty Ltd (1990) 20 IPR 331 7.42C3

Facts: Sabra applied to register as a trade mark the word SIZZLER for restaurant services. The opponent had used the mark SIZZLER extensively overseas in relation to restaurant services, but had not actually established any restaurants in Australia at the time of the application. It had, however, carried out market research and conducted negotiations with prospective franchisees in Australia. Decision: The opponent, by conducting market research and engaging in trade negotiations, had exposed its use of the mark SIZZLER to the public, at least so far as the restaurant industry in Australia was concerned. The opponent had thereby established public use of its mark by the time of the applicant’s application, and the latter’s application should therefore be refused.

Occasionally trade mark applications are filed by so-called ‘name pirates’ — persons who foresee that a particular trader (usually located overseas) may expand its business to include Australia, or that a particular trader may expand its present product offerings to include other classes of goods or services. Such persons have no genuine intention to use the mark themselves, but register the mark more in the hope of being able to sell it to the original creator of the mark. The following case concerned an opposition on the grounds that the applicant for the mark had no intention to use the mark at the time of applying for it. Rawhide Trade Mark [1962] RPC 133

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7.42C4

Facts: The applicant made a practice of studying the titles of film series to be shown on American television and, if he expected that any particular one was likely to be televised in England, applying for a trade mark in respect of that title to be used if the expectation was realised. In this case, the application was in respect of certain toys and games for the mark RAWHIDE, which was the title of a series of ‘Westerns’. The application was opposed by a licensee associated with the film proprietors, who had merchandising rights in respect to the series. Decision: The Registrar has a discretionary right as to whether or not to register a mark, although it must be exercised judicially on reasonable grounds. As the applicant in this case did not have a sufficiently present and unconditional intention to use the mark, the proposed use being contingent on the show being screened in the United Kingdom, the court upheld the Registrar’s decision not to register the mark.

If an applicant actually registers and first uses a trade mark in Australia, even if it has been used on similar goods overseas by another, the registration cannot usually be challenged in the absence of fraud or breach of confidence. There are some potential exceptions to this rule. The Trade Marks Act allows a person who has registered a trade mark in a convention country (countries that have entered into treaties with each other) to seek registration of the trade mark in Australia 302

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and claim priority based on the date of the overseas application: Trade Marks Act ss 29, 72, and 225. However, to take advantage of this right, the application must be made in Australia within six months of the overseas application. More importantly, as already outlined, registration of a trade mark can be opposed on two grounds relevant to this point. The first ground is that the mark is substantially identical with, or deceptively similar to, a trade mark that (before the application was made) had acquired a reputation in Australia in respect of the goods or services involved — in other words, a reputation may exist in Australia for a particular trade mark, even though it has not yet been specifically used on goods or services marketed in this country: s 60.96 The second ground relates to applications that have been made in ‘bad faith’: Trade Marks Act s 62A. DC Comics Ltd v Cheqout Pty Ltd [2013] FCA 478 Facts: Cheqout applied to register SUPERMAN WORKOUT for conducting exercise classes and fitness clinics. The application was accepted by the Trade Marks Office and opposed by DC Comics. Cheqout used SUPERMAN WORKOUT together with a shield device in relation to its personal training and other videos on its website. DC Comics has an Australian registered trade mark for Superman with the superhero figure or the S Shield device but not the word Superman alone. The grounds of opposition included s 60 (trade mark similar to another mark that has acquired a reputation in Australia and likely to deceive or cause confusion) and s 62A (trade mark application made in bad faith) of the Trade Marks Act. DC Comics argued that consumers would make an association between fitness and DC Comics. Cheqout argued that consumers might think of the Superman character, but would not be caused to wonder whether its fitness classes were licensed by DC Comics because DC Comics has never operated in the health and fitness industry.

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DC Comics was unsuccessful before the delegate of the Registrar and appealed to the Federal Court. Decision: Section 60: The dictionary meaning of superman refers not only to the DC Comics character, but also to the strength of a superior being. DC Comics does not have a trade mark registration for the word SUPERMAN alone. The use of the word ‘superman’ is descriptive of strong qualities in a person. When not used with other DC Comics or superhero indicia, Bennett J held97 that ‘the public would not be caused to wonder whether “superman workout” came from the same source as the Superman character or DC Comics’, they would see the word as descriptive. Section 62A: Previous authorities have rejected the proposition that ‘mere awareness that an overseas company owning the mark operated or intended to operate in Australia would amount to bad faith’ and that the applicant’s mental state would be relevant.98 Bad faith suggests behaviour that is unscrupulous or underhand. Bennett J held that the inference is clear that, by using SUPERMAN WORKOUT together with a shield device, its particular design, and use of the colours red, white, and blue, Cheqout intended to ‘strengthen the allusion to Superman. The inference can also be drawn that this use was designed to gain a benefit by appropriating

96 See Anheuser-Busch Inc v Castlebrae Pty Ltd (1991) 32 FCR 64; 23 IPR 54. 97 At 50. 98 At 63, citing Dodds-Streeton J in Fry Consulting Pty Ltd v Sports Warehouse Inc (No 2) (2012) 288 ALR 727; 94 IPR 551; [2012] FCA 81.

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Marketing and the Law Superman indicia and the reputation of the DC Comics superhero, so as to further the viewer’s association’99 between DC Comics and Cheqout. The application was made in bad faith. The application to register the trade mark was refused.

The opponent bears the onus of proof in an opposition: Food Channel Network Pty Ltd v Television Food Network GP.100

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Trade Mark Rights 7.43 If a trade mark is registered, the registered owner of the trade mark obtains the exclusive rights: • to use the trade mark; and • to authorise other persons to use the trade mark, in relation to the goods and/or services in respect of which the trade mark is registered: Trade Marks Act s 20(1).101 The registered owner also has the right to obtain relief if the trade mark has been infringed: Trade Marks Act s 20(2). A trade mark is a proprietary right: Trade Marks Act s 21. Thus, it can be licensed or assigned. The Registrar of Trade Marks can register a trade mark subject to conditions and limitations: Trade Marks Act s 69(1)(c). The exclusive right to use a trade mark may include limitations as to: • mode of use; • use within a territorial area within Australia; or • use in relation to goods or services to be exported: Trade Marks Act s 102. Other limitations that may be imposed include limitations as to colour: Trade Marks Act s 70. If such a limitation is not imposed, the trade mark is taken to be registered for all colours.

Term of Protection 7.44 The initial period of protection granted upon registration of a trade mark is 10 years from the filing date of the application: Trade Marks Act s 72(3). The registration can then be renewed perpetually for further 10-year periods: Trade 99 At 73. 100 [2010] FCAFC 58. 101 Although see Campomar Sociedad Limitada v Nike International Ltd (2000) 202 CLR 45; 169 ALR 677; [2000] HCA 12, see 6.30C, where a valid registration was restricted in how it could be used to avoid misleading or deceptive conduct and passing off.

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Marks Act ss 75–77. If an owner fails to renew a trade mark, it will expire and be removed from the register six months after the day on which the registration expired. However, prior to removal, a late application to renew will be accepted.

Infringement of Registered Trade Mark Rights 7.45 There are three main grounds upon which an owner of a trade mark can rely in bringing an infringement action against another trader: 1. using a substantially identical or deceptively similar mark on goods or services for which the mark is registered: s 120(1); 2. using a substantially identical or deceptively similar mark on goods or services ‘of the same description’ as, or ‘closely related to’, the goods or services for which the mark is registered, unless it can be established by the defendant that such use is not likely to deceive or cause confusion: s 120(2); and 3. using a substantially identical or deceptively similar mark to a ‘well-known’ trade mark on unrelated goods or services, subject to the use being likely to suggest a trade connection between those goods or services and the registered owner of the well-known mark: s 120(3). These three grounds will be examined in detail.

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Use on the same goods or services 7.46 It is an infringement for another trader to use as a trade mark a sign that is substantially identical with, or deceptively similar to, the trade mark in relation to goods or services in respect of which the trade mark is registered: Trade Marks Act s 120(1). A competitive trader dealing in the same goods or services as the owner of the trade mark must not use a trade mark which is the same or too similar to that of the registered owner. Mere ‘use’ of the trade mark as a trade mark will constitute infringement. A mark is ‘used’ if it is placed upon goods, or in physical or other relation to goods or services: Trade Marks Act s 7(4) and (5). A verbal representation of a trade mark also amounts to use: Trade Marks Act s 7(2). The alleged infringer cannot argue under s 120(1) that the use did not or was not likely to deceive or cause confusion in the marketplace. However, in order to establish infringement, it must be shown that the ‘use’ is use ‘as a trade mark’.

A. Use ‘as a trade mark’ 7.47 A mark is used ‘as a trade mark’ when it is used to indicate the origin or source of goods or services. It is ‘use of the mark as a ‘badge of origin’ in the sense 305

Marketing and the Law

that it indicates a connection in the course of trade between goods and the person who applies the mark to the goods’.102 This assessment requires consideration of the allegedly infringing mark, not the registered mark: Edgetec International Pty Ltd v Zippykerb (NSW) Pty Ltd.103

7.47C1

Mark Foy’s Ltd v Davies Coop & Co Ltd (1956) 95 CLR 190; 1A IPR 470; [1956] HCA 41 Facts: Mark Foy was the registered proprietor of the trade mark TUB HAPPY for clothing. Davies Coop manufactured and marketed Exacto brand windcheaters. In a newspaper advertisement for Exacto windcheaters it described its product as ‘Cotton Fresh, Budget Wise, Tub Happy’. The words ‘Tub Happy’ were meant to suggest that the garment could be washed in a washing machine (or ‘tub’). Mark Foy sued for infringement of its trade mark. Decision: Mark Foy had the exclusive right to use the words TUB HAPPY ‘as a trade mark’. If the defendant had claimed that its goods were as good as TUB HAPPY goods, in a comparative sense, then this would not have been use ‘as a trade mark’. However, in this case the defendant was advertising the words TUB HAPPY in relation to its own goods in the course of trade, which was an infringement. It was using the words TUB HAPPY as a trade mark.

In Coca-Cola Company v PepsiCo Inc (No 2),104 Besanko J was not persuaded that consumers would consider the outline or silhouette of the PepsiCo ‘Carolina’ bottle alone as a feature to indicate a connection between the drink and PepsiCo. As a consequence, there was no infringement of the Coca-Cola Company’s CONTOUR BOTTLE trade mark registrations. If the use of a trade mark is not understood to indicate the origin of goods or services, then it is not use of the mark ‘as a trade mark’, and there is no infringement.

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Musidor BV v Tansing (t/as Apple Music House) (1995) 123 ALR 593; 29 IPR 203 7.47C2

Facts: The defendant, trading as Apple Music House, produced and sold unauthorised recordings of famous artists. One of these recordings featured the Rolling Stones, whose name naturally appeared on the cover of the CD recording. Musidor BV was the registered proprietor of the trade mark ROLLING STONES. It alleged that the use of the words ‘Rolling Stones’ by the defendant on CD recordings infringed its trade mark. Decision: The use by the defendant of the words ‘Rolling Stones’ was not a use ‘as a trade mark’. The words were being used accurately to identify the recording artists to be heard on the CD recording. The mark was not being used in the sense of indicating that the recording originated from or was produced by Musidor BV, the owner of the mark.

102 Coca-Cola Company v All-Fect Distributors Ltd (1999) 47 IPR 481; (2000) ATPR 41-735; [1999] FCA 1721. 103 (2012) 98 IPR 1; [2012] FCA 281. 104 (2014) 109 IPR 429; [2014] FCA 1287.

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Australian Health & Nutrition Association Ltd (t/as Sanitarium Health Food Co) v Irrewarra Estate Pty Ltd (t/as Irrewarra Sourdough) (2012) 292 ALR 101; [2012] FCA 592 Facts: Sanitarium is the licensed user of the trade mark GRANOLA, which has been registered for cereals in Australia since 1921. (The owner of the trade mark was also a party to the infringement proceedings.) Irrewarra makes and sells breads and cereals. Its labelling includes use of the word ‘granola’. Sanitarium alleged that Irrewarra infringed the GRANOLA trade mark.

7.47C3

Decision: The trade mark was not infringed because the use by Irrewarra was not use ‘as a trade mark’. In coming to this decision, Jagot J looked at the packaging as a whole, which included the prominent use of the IRREWARRA SOURDOUGH trade mark and the fact that the use of the word ‘granola’ was in plain font as part of the phrase ‘all natural handmade granola’ in a smaller size. Irrewarra used the word ‘granola’ to describe the bread and cereal products. It was not used as a ‘badge of origin’ to indicate the source of the product.

In Solarhart Industries Pty Ltd v Solar Shop Pty Ltd,105 Perram J reiterated that, while mere registration of a domain name does not amount to trade mark infringement, use of a domain name to attract customers to a website to benefit from a flow of traffic to the website might amount to use as a trade mark. It will depend on the context.

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Lift Shop Pty Ltd v Easy Living Home Elevators Pty Ltd (2014) 311 ALR 207; 106 IPR 419; [2014] FCAFC 75 Facts: Lift Shop is the owner of an Australian trade mark registration for elevators (lifts) for a composite device mark which includes the words LIFT SHOP and an image of an arrowhead in a circle-shaped button. Easy Living is a competitor in the market for disability platform elevators. Easy Living engaged a marketing firm to use search engine optimisation (SEO) to improve the ranking of its website in search results. It added the words ‘lift shop’ to the title of its website, included ‘lift shop’ on its home page, and purchased keyword advertising for ‘lift shop’. Lift Shop commenced proceedings for trade mark infringement and misleading or deceptive conduct under s 18 of the Australian Consumer Law. The primary judge dismissed the proceedings. Buchanan J found that the keyword advertising by Easy Living used ‘lift shop’ descriptively (to refer to stores from which one could purchase an elevator) and not ‘as a trade mark’. (It was not misleading and deceptive conduct because consumers would not have understood this to have suggested an association between the two businesses). Lift Shop appealed to the Full Federal Court. Decision: The LIFT SHOP trade mark was not infringed because the use by Easy Living was not use ‘as a trade mark’. The court held that the relevant question is whether the words ‘lift shop’, when used by Easy Living on its website and in its advertising, ‘functioned to distinguish its goods or services from those of others’. In other words, was it functioning ‘as a trade mark’ to indicate origin? No. Consumers searching the internet for ‘lift shop’ would have understood the results to mean that Easy Living ‘was using those words to convey that its business was one of supplying “lifts” and “home elevators” … that their only functional significance was to describe the character 105 [2011] FCA 700.

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Marketing and the Law of that business … not to distinguish its business from others … Such use is the antithesis of trade mark use.’106 The appeal was dismissed.

The overall circumstances in Mantra Group Pty Ltd v Tailly Pty Ltd (No 2)107 led Reeves J to find that use of domain names such as ‘circleoncavile.com.au’ and ‘circleoncavillapartments.com.au’ by a real estate agent (for various apartments, including those in the Circle on Cavill complex) was use as a trade mark and infringed the CIRCLE ON CAVILL trade mark registered by the Circle on Cavill owner/on-site rental agent. In Accor Australia and New Zealand Hospitality Pty Ltd v Liv Pty Ltd,108 Accor was the licensed user of trade mark registrations for ‘Cairns Harbour Lights’ and ‘Harbour Lights’, which it used to promote the sale of apartments at the Harbour Lights, also known as the Cairns Harbour Lights complex in the city of Cairns in Northern Queensland. The Full Federal Court found that use of metatags in the source data of Accor’s competitor, Liv’s, website, infringed the registered trade marks, given that the words ‘Harbour Lights Apartments’ effectively functioned as a business name to distinguish Liv’s business from those of other traders.

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B. The difference between ‘substantially identical’ and ‘deceptively similar’ 7.48 The legal tests for assessing the difference between these criteria are well established. • ‘Substantial identity’ is assessed using a side by side test. This involves assessing the similarities and the differences of a mark’s essential features. If two marks differ only in inessential respects, they are substantially identical. The judgment will usually be made by the eye alone; but in the case of words and sounds, judgment can be made by the ear; or in the case of scent by the nose. • ‘Deceptive similarity’ exists when one mark so nearly resembles the other that it is likely to deceive or cause confusion: Trade Marks Act s 10. The test does not involve a side by side comparison. It is based on impression.109 The question posed by the court is: Would the recollection of a mark held by a person of ordinary intelligence and memory be such that confusion between the mark and the defendant’s mark was likely? Allowance must also be made for those who know of one mark, but not the other: REA Group Ltd v Real Estate 1 Ltd.110 106 At 46. 107 (2010) 267 ALR 347; 86 IPR 19; [2010] FCA 291. 108 (2017) 345 ALR 205; [2017] FCAFC 56. 109 Adidas AG v Pacific Brands Footwear Pty Ltd (No 3) (2013) 308 ALR 74; 103 IPR 521; [2013] FCA 905. 110 (2013) 102 IPR 1; [2013] FCA 559, see 6.27C4.

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Polaroid Corporation v Sole N Pty Ltd [1981] 1 NSWLR 491111 Facts: The plaintiff was the registered proprietor of the trade mark POLAROID for plastic sheets or blocks. The defendant had used the trade mark SOLAROID for window tinting materials, which are goods of a similar class. The plaintiff sued the defendant for infringement on the grounds that the defendant’s trade mark was ‘substantially identical’ with or ‘deceptively similar’ to its registered mark.

7.48C1

Decision: Were the trade marks substantially identical? SOLAROID was not substantially identical with POLAROID in regard to the essential features of the mark because the first letter conveys a difference to the mind when the two marks are judged side by side. ‘Solar’ involves a concept of the sun; whereas ‘Polar’ evokes an entirely different concept, so there is not a total impression of resemblance between them to the extent of substantial identity. Were the trade marks deceptively similar? In determining this issue, the impression is not judged by viewing the two marks side by side. Instead the impression is based on the recollection — sometimes an imperfect recollection — that persons of ordinary intelligence and memory would have. In applying the test, the similarity between the two marks is such as to qualify as deceptive similarity. The two words are so alike that there is a strong likelihood of confusion arising from such similarity in the marketplace, especially given the nature of the goods and of the prospective purchasers. An infringement had therefore occurred.

Aldi Stores Ltd Partnership v Frito-Lay Trading Co GmbH (2001) 190 ALR 185; 54 IPR 344; [2001] FCA 1874

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Facts: Frito-Lay was the registered proprietor of the trade mark TWISTIES in respect of goods in class 30 for ‘tasty preparations made from cereals, primarily for use as a snack’. Aldi, which operated a discount chain of grocery stores, sold a cereal-based cheese-flavoured snack food called CHEEZY TWISTS in its outlets. The words CHEEZY TWISTS were prominently displayed on the front of the packet. A blue logo containing the word ‘Chazoos’ appeared above the words CHEEZY TWISTS. Frito-Lay sought an injunction restraining Aldi from infringing its TWISTIES trade mark by using the words CHEEZY TWISTS. Aldi denied infringement on the ground that the words CHEEZY TWISTS were not used as a trade mark and were only used descriptively.112 Aldi argued that ‘Chazoos’ was the only trade mark on its package and CHEEZY TWISTS was merely a description of the snack — ‘twists’ was descriptive of the shape of the product and ‘cheezy’ properly described the cheese flavour of the product. Frito-Lay was successful at first instance, with the trial judge finding that the composite sign CHEEZY TWISTS sounded so similar to the mark TWISTIES that it was likely to deceive or cause confusion. Aldi appealed to the Full Federal Court. Decision: The court was unanimous in finding that the words CHEEZY TWISTS were being used by Aldi as a trade mark (ie, to distinguish its goods in the eyes of consumers from the products of other traders) in addition to the ‘Chazoos’ trade mark.

111 See also Noodle Box Pty Ltd v Dave’s Noodle Box [2002] FCA 579. 112 The same defence failed in Mark Foy’s Ltd v Davies Coop & Co Ltd (1956) 95 CLR 190; 1A IPR 470; [1956] HCA 41, see 7.47C1.

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Marketing and the Law However, the majority found that although Aldi had set out to produce a product that rivalled Twisties, it had not appropriated the TWISTIES trade mark for itself. The sign CHEEZY TWISTS was not substantially identical with the TWISTIES mark, nor was it deceptively similar. The trial judge had erred in not considering matters other than aural resemblance, such as the price of the two products, the outlets in which the products were sold, and the role of speaking and hearing the two marks when considering aural resemblance. Given that both products were invariably sold on a self-service basis, the aural resemblance was given too much significance by the trial judge. The dual word character of CHEEZY TWISTS afforded a clear visual distinction from the one word TWISTIES mark, and the latter was a more memorable word with a long and well established reputation.

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The appeal was upheld in favour of Aldi.

A dispute with many similarities to Aldi Stores Ltd Partnership v Frito-Lay Trading Co GmbH113 occurred in Mars Australia Pty Ltd v Sweet Rewards Pty Ltd,114 a case discussed in relation to passing off. Apart from the passing off allegation, Mars claimed that the use of the words ‘Malt Balls’ by the defendant infringed its registered mark MALTESERS. The defendant clearly displayed the brand name ‘Delfi’ on its product, and claimed that the use of the words ‘Malt Balls’ was descriptive only. In contrast to the Aldi case, the judge agreed that this was not a case where one label bore two marks, finding that the words ‘Malt Balls’ were only being used descriptively (and not as a trade mark). However, the judge then went on to say that even if the defendant had been using ‘Malt Balls’ as a trade mark, it was not ‘deceptively similar’ to the MALTESERS mark. He concluded that persons of ordinary intelligence and memory would not be left with an impression of similarity when recollecting these two marks. If a trade mark is ‘notoriously so ubiquitous and of such long standing that consumers must be taken to be familiar with it’, confusion is less likely to occur. The MALTESERS mark is very famous, so it was impossible for consumers to be confused between it and ‘Malt Balls’, a conclusion supported by the fact that, aurally, ‘Maltesers’ does not sound like ‘Malt Balls’. Similarly, in Australian Postal Corporation v Digital Post Australia,115 the Full Court of the Federal Court held that DIGITAL POST AUSTRALIA was not deceptively similar to AUSTRALIA POST. This was another example of where the fame of the AUSTRALIA POST mark may have contributed to the court’s finding.

Use on similar goods or services 7.49 It is an infringement for another trader to use as a trade mark a sign that is substantially identical with, or deceptively similar to, a registered trade mark which is registered for: 113 (2001) 190 ALR 185; 54 IPR 344; [2001] FCA 1874, see 7.48C2. 114 (2009) 81 IPR 354; [2009] FCA 606, see 6.11C3. 115 (2013) 308 ALR 1; 105 IPR 1; [2013] FCAFC 153.

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• goods of the same description as the user’s goods; or • services of the same description as the user’s services; or • goods closely related to the user’s services; or • services closely related to the user’s goods: Trade Marks Act s 120(2). A trader can infringe a registered trade mark even where the mark is used on goods or services which are not exactly the same as those for which the mark has been registered. Protection is provided by preventing use of the same or a very similar mark on goods or services of the same description, or which are closely related to one another. For example, the Coca-Cola Company was able to prevent the sale of confectionery in the shape of a contour bottle with ‘Cola’ inscribed on it, on the grounds that it was deceptively similar to the registered drawing of the CONTOUR BOTTLE that it used to package soft drink: see Coca-Cola Company v All-Fect Distributors Ltd.116 By way of contrast, Apple Inc, the owner of the well-known iPOD trade mark for small portable music players, was unable to prevent the seller of accessories for digital devices (such as laptop carry bags) from using ‘Dopi’ (the letters of Apple’s trade mark in reverse order) as a trade mark. The Registrar of Trade Marks concluded that the two marks were not ‘deceptively similar’, as a person of ordinary intelligence and memory would not be caused to wonder,117 or be left in doubt, about whether the ‘Dopi’-marked goods came from Apple merely because the trade mark terminates in the letter ‘i’, no matter how presented. Nor was it considered likely that a significant or substantial number of relevant consumers would wonder whether the goods were those of Apple because ‘Dopi’ is made up of the letters of the iPOD trade mark in reverse order: Apple Inc v Wholesale Central Pty Ltd.118 It is important to note that a defence, internal to s 120(2) only, to an infringement action exists for this form of use. In such cases the alleged infringer is allowed to argue that the use did not or was not likely to deceive or cause confusion in the marketplace.119

A. Goods or services of the same description 7.50 In determining whether goods are of the same description as other goods, or whether services are of the same description as other services, the courts have utilised the following criteria: • the nature and characteristics of the goods or services; • the use or purpose of the goods or services; and • the trade channels and customers for the goods or services. 116 (1999) 47 IPR 481; (2000) ATPR 41-735; [1999] FCA 1721. 117 This test is different from the test applied in passing off: Southern Cross Refrigerating Company v Toowoomba Foundry Pty Ltd (1954) 91 CLR 592 at 608; 1A IPR 465. 118 [2010] ATMO 7. 119 Although the plaintiff does not carry the burden of having to prove deception or confusion, evidence of actual cases of deception or confusion will greatly assist in proving infringement: see Nike International Ltd v Champion Socks Pty Ltd [2001] ATMO 117.

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Marketing and the Law TABLE 7.7 COURT DECISIONS REGARDING GOODS OR SERVICES OF THE SAME DESCRIPTION120121122123124125126127128 GOODS OR SERVICES GOODS OR SERVICES UPON FOR WHICH MARK WAS WHICH MARK WAS USED BY REGISTERED ANOTHER TRADER Wine Wines Jellies Cheese Insurance services Spices/seasonings Boots/shoes Sportswear Footwear

Beer Spirits Ice creams Flavoured milk Travel services Instant fish batter Shoe polish Sports equipment Camping gear

DECISION: WERE GOODS OR SERVICES OF THE SAME DESCRIPTION? Yes120 Yes121 Yes122 Yes123 Yes124 Yes125 No126 No127 No128

B. Closely related goods and services

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7.51 The concept of ‘closely related goods and services’ has been explained as follows:129 [I]n certain cases there is likely to be confusion if similar trade marks are used by different proprietors, one for services and the other for goods. So, for example, the use of identical or deceptively similar marks in respect of prepared foods and in respect of a takeaway food service would suggest that both the goods and the service might be attributed to the same source. Motor vehicles and vehicle hire services, cosmetics and beauty salon services, insecticides and pest eradication services are other examples. These are all likely to fall within the concept of ‘closely related goods and services’.

120 E & J Gallo Winery v Lion Nathan Australia Pty Ltd (2010) 241 CLR 144; 265 ALR 645; 86 IPR 224; [2010] HCA 15. 121 Re Australian Wine Importer’s Trade Mark (1889) 6 RPC 311. 122 J Lyons & Co Ltd’s Application [1958] RPC 466. 123 New South Wales Dairy Corp v Murray Goulburn Co-operative Co Ltd (No 1) (1989) 86 ALR 549; 14 IPR 26. 124 American Express Co v NV Amev (1985) 5 IPR 267; [1985] RPC 466. 125 McCormick & Co Inc v McCormick (2000) 51 IPR 102; [2000] FCA 1335. 126 Jellinek’s Application (1946) 63 RPC 59. 127 General Sportscraft Co Ltd v Sportscraft Consolidated Pty Ltd (1993) AIPC 90-967. 128 Walkabout Footwear Pty Ltd v Sunshine Aust Group Pty Ltd (1987) 9 IPR 558. 129 F J Smith, ‘The Trade Marks Amendment Act 1978’ (1979) 53 ALJ 118 at 119.

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Rowntree plc v Rollbits Pty Ltd (1988) 10 IPR 539 Facts: The plaintiff was the registered owner of the trade mark ROLO in relation to ‘confectionery, including toffee, chocolate and chewing gum’. The defendant sought to register the following mark:

It was to be used on biscuits, cakes, pastry goods, and in respect of the services of providing food and drink through restaurants, take-away food stores, and all other retail food outlets. The plaintiff opposed the registration on the grounds that the proposed mark was substantially identical with or deceptively similar to its mark, which was registered for goods of the same description and goods closely related to the applicant’s services. Decision: The defendant’s goods were of the same description as those of the plaintiff,