Botox, floor plans and gaming machines – a High Court update

By Tommy Chen, Paul Mersiades , Tahlia Rodrigues
Intellectual Property Patents & Trade Marks

In brief 6 min read

Three important IP cases are now before the High Court of Australia. They cover a range of key issues: implied licence terms when a copyright work is produced for use on a third party website; when a trade mark is used as a trade mark, and the availability of the comparative advertising defence; and when computer-implemented inventions are patentable.

These cases have the potential to clarify Australian law in some key respects, and may have a significant impact on creators and innovators, as well as users of IP.

Key takeaways

  • The High Court has granted special leave to appeal in RP Data Pty Limited v Hardingham. The appeal focuses on the arrangement between Mr Hardingham, a creator of photographs and floor plans, and real estate agents who commissioned those works and put them on third party real estate websites. The court has an opportunity to clarify the test for implying a term into a contract, especially an informal (eg oral) contract. The outcome of the appeal will be particularly significant for creators of commissioned content.
  • The High Court has also granted special leave to appeal in Self Care IP Holdings Pty Ltd v Allergan Australia Pty Ltd. The appeal focuses on whether the phrase 'instant Botox® alternative' infringes the trade mark BOTOX, and whether the comparative advertising defence is available for this use.
  • The High Court recently heard the appeal in Aristocrat Technologies Australia Pty Ltd v Commissioner of Patents, concerning the patentability of computer-implemented inventions. The question before the court focused on the correct test for assessing whether an invention implemented on a computer is properly characterised as a patentable invention, or merely an abstract idea.

Who in your organisation needs to know about this?

Legal; licensing; compliance; marketing; R&D

Can I put photos I commissioned on a third party website?

Mr Hardingham, a professional photographer, was commissioned by real estate agencies to produce photographs and floor plans for use in marketing campaigns. These works were commissioned over the phone, and the oral agreement between him and the agencies didn't expressly deal with the licensing or ownership of copyright. It was acknowledged in the case that one of the purposes for the commission was for agencies to upload the works to the third party real estate website as part of their campaign, subject to the website operator's (REA's) terms. These terms grant REA significant rights to use (and sub-license) uploaded content. REA sub-licensees uploaded photos to RP Data, a subscription-based property data site. Mr Hardingham claims that REA had no right to sub-license to RP Data, and that RP Data infringed copyright in his works.

At first instance, the Federal Court found there was no copyright infringement, as Mr Hardingham had authorised the use of his works by way of an implied licence with the agencies to upload them to the website in accordance with its terms and conditions. On appeal, the Full Federal Court disagreed, on the basis that the implied licence didn't extend that far. The High Court has now granted special leave to appeal this decision.

The issue before the High Court focuses on whether the informal agreements made between Mr Hardingham and the real estate agencies are subject to the terms and conditions contained on, either because they're inferred from the parties' conduct, or on the basis that a term should be implied in order to give business efficacy to those agreements. It gives the High Court an opportunity to consider the established test for implied terms in BP Refinery (Westernport) Pty Ltd v Hastings Shire Council (1977) 180 CLR 266, and potentially clarify its application to informal contracts. This case is a timely reminder for photographers and other content creators to clarify the scope of any licences they grant through written agreements.

Can I say 'instant Botox® alternative'?

Allergan is the manufacturer of Botox, an injectable product containing botulinum toxin, and the owner of various trade marks for BOTOX. As previously reported, Allergan brought a trade mark infringement claim against Self Care, because it was using the brand name PROTOX and the phrase 'instant Botox® alternative' in connection with Self Care's Freezeframe products. A trial judge of the Federal Court dismissed Allergan's claims of trade mark infringement, but this decision was reversed on appeal in the Full Federal Court. The High Court has now granted Self Care special leave to appeal that decision to the High Court.

The High Court will review at least two key aspects of the Full Court's decision. The first is whether the phrase 'instant Botox® alternative' infringes the trade mark BOTOX. The trial judge considered that the word 'alternative' indicated that the Freezeframe product had a different trade origin to Botox products. The Full Court disagreed, holding that although the word 'alternative' implies that the products are different, it doesn't necessarily imply that the trade source of those products is different. The phrase was therefore being used as a trade mark, as it denoted a trade source connection between those products, though the products were different. 

The High Court will also consider the Full Court's treatment of the comparative advertising defence in section 122(d) of the Trade Marks Act 1995 (Cth). The Full Court determined that the defence couldn't apply, since the phrase 'instant Botox® alternative' wasn't the same as the infringed mark BOTOX (the provision requires that the alleged infringer uses 'the trade mark' for the purposes of comparative advertising to qualify for the defence). Self Care is expected to argue before the High Court that the Full Court erred in its interpretation of the section, as it's in the very nature of comparative advertising to use a competitor's trade mark in a composite phrase.

Can I patent my gaming machine?

In 2016, Aristocrat Technologies applied for an innovation patent relating to an electronic gaming machine with a particular feature game. 'Innovation patents' are being phased out in Australia. They offer shorter-term protection than standard patents, and have a lower threshold of inventiveness. However, an invention must be subject matter that is patentable (for both innovation patents and standard patents). This requires it to be a 'manner of manufacture' within the meaning of the Statute of Monopolies (enacted in 1624). This requirement has been interpreted to exclude 'mere schemes', abstract ideas or intellectual information, such as mathematical methods or business schemes. In many cases, innovative computer software is also excluded from patentability.

At the Patent Office, Aristocrat's innovation patent application was assessed as sufficiently novel and inventive, but was rejected for not being a method of manufacture, because the inventions were game rules, and therefore a mere scheme or abstract idea, implemented using conventional computer technology. The trial judge of the Federal Court disagreed, holding that the claimed invention related to a machine of particular construction, with hardware, firmware and software components. On appeal, the Full Court of the Federal Court took a different approach and held that the invention was a computer-implemented invention (the feature game), and that it didn't present an advance in computer technology. There was therefore no patentable invention.

Before the High Court, the parties' arguments focused on whether the trial judge or the Full Court had departed from existing case law, and how the general principles relating to patentable subject matter should be applied in the context of computer-implemented inventions.

What's next?

We will keep you updated on all further developments in these landmark cases.