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Intellectual Property

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What's happening in intellectual property

June 2018

In this issue: we provide an update on defamation law in the digital context; look at how having a name famous enough to be registered as a trade mark can be a double-edged sword; give the lowdown on some intriguing new applications for drones; report on a US decision on whether embedded Tweets infringe copyright, which could have important consequences for online media; explain how to take ownership of social media accounts when purchasing a business; and analyse the Federal Court's first look at enablement and support in the patent context.

Defamation law developments in the digital context

In brief: The NSW Attorney-General has released the long-awaited statutory review of the Defamation Act 2005 (NSW), recommending that consideration be given to certain changes to the Model Defamation Provisions that form the basis for the National Uniform Defamation Law. The High Court's decision in Trkulja v Google LLC [2018] HCA 25 (13 June 2018), allowing a defamation action regarding search engine results to proceed against Google, highlights the importance of getting the policy settings right in the digital context. Managing Associate Alison Beaumer reports.

Review of the Defamation Act

The Review recommends that consideration be given to possible changes to the Model Defamation Provisions, including:

  • the introduction of a 'single publication rule', rather than the current rule that a separate cause of action arises each time a matter is published (or, in the digital context, downloaded). The current rule has the effect of nullifying the one-year limitation period where material remains on the internet;
  • whether a 'serious harm' test should be introduced as a threshold matter to deter trivial, vexatious or spurious claims;
  • whether the innocent dissemination defence requires amendment, to better reflect the operation of ISPs, internet content hosts and search engines;
  • the introduction of a specific safe harbour provision and clear takedown procedures for digital publishers; and
  • enabling corporations to sue for defamation. At present, they are excluded from bringing an action for defamation unless they are not for profit or employ fewer than 10 people. While this is out of step with other comparable jurisdictions, the Review suggests it remains appropriate.

The High Court's decision in Trkulja

Mr Trkulja alleged that he was defamed by Google's publication of certain Google search results. The search results included images of him mixed with images of convicted Melbourne criminals and certain text suggested by autocomplete. Mr Trkulja alleged that the search results conveyed defamatory imputations that he was associated with the Melbourne criminal underworld.

Google's application for summary dismissal was dismissed at first instance. Google's appeal succeeded, with the Court of Appeal holding that the content was incapable of being defamatory. It held that it would have been apparent to an ordinary reasonable person using the Google search engine that Google made no contribution to the search results that conveyed a connection between Mr Trkulja and criminality.

The High Court overturned this decision, holding that it was not an appropriate case for summary dismissal. It would be open to a jury to conclude that an ordinary reasonable person using the Google search engine would interpret the search results in the manner alleged. Google's liability in the circumstances may turn more on whether it can bring itself within the defence of innocent dissemination than on whether the content of what has been published has the capacity to defame.

What next?

The NSW Review has been referred to the Council of Attorneys-General for further consideration of possible amendments to the Model Defamation Provisions. The Trkulja case will be of ongoing interest to lawmakers. With the High Court having allowed the case to proceed, it is likely to raise the scope of the innocent dissemination defence and the potential need for legislative amendment if Google is unable to meet the requirements of that defence. We will keep you updated on developments.

When trade mark law gets Messi, better call the Dr (Dre)

In brief: Having a famous name has many perks, and as Lionel Messi recently found out, registering your name as a trade mark is one of these. However, such fame is a double-edged sword, as Dr Dre recently experienced. Lawyer Edward Thien reports.

Lionel Messi's trade mark succeeds

Lionel Messi, the world's highest-earning soccer player, has recently been granted the right to register his own name as a trade mark in the EU by a European Court ruling that might prove money and fame can get you anything. Messi's trade mark, as shown in the image, was originally knocked back after it was argued that 'Messi' was too similar to 'Massi', which is a trade mark registered for clothes, shoes and bicycle equipment.

Fears that the similarity between the two trade marks would cause confusion were not accepted by the court. It was found that Messi's fame was so great that even the non-sport loving population would realise the 'Messi' brand was associated with the soccer player. Therefore, the potential confusion caused by the similarities between the marks was neutralised by Messi's notoriety. Such is Messi's dominance in the market that, if you Google 'Massi trade mark', it comes up with 'showing results for Messi trade mark'.

However, such fame comes with its drawbacks. If Messi were later to make an attempt to block the registration of marks similar to 'Messi', his own arguments may be used against him. It could be argued that just as 'Messi' would not be confused for 'Massi', so too would future marks not be confused with 'Messi'. This flipped argument was recently used against Andre Rommel Young, better known by his stage name, Dr Dre.

Dr Dre fails to block Dr Drai

In the US, Dr Dre sought to block a trade mark registration from Dr Draion Burch, an osteopathic doctor, obstetrician and gynaecologist, who has written books and made television and radio appearances. Dr Draion Burch sought to register two trade marks, being the words 'Dr. Drai' and the device shown in the image for educational, entertainment and health care services.

In this matter, it was also held that there was no likelihood of confusion despite a finding that the marks were similar. It was found that the 'Dr Dre' mark had achieved a degree of renown in the music industry. It was further found that the goods in which the two parties' marks were to be used were not sufficiently similar – Dr Draion Burch's mark was to be used on books, downloadable files and education services on men's and women's health and a web-site providing medical information; by contrast, Dr Dre's mark is used on goods and services relating to music. On the combined weight of those two factors, it was found that Dr Draion Burch's mark would not be confused with Dr Dre's mark. Dr Dre was well-known enough in the music industry to ensure the public would not mistake Dr Draion Burch's mark on educational and motivational speaking services or products as being associated with Dr Dre. It was held that if Dr Dre were less well-known, public recollection of his mark may be less strong and therefore, the risk of confusion would be greater.

Drones – a patent perspective

In brief: The military and high-priced wedding videographers are no longer the only ones actively using drones. Companies from a variety of fields are coming up with innovative uses for drone technologies, and patenting them. Associate Evan Wilcox, aeronautical engineer turned patent attorney, describes a few of these intriguing new applications.

DJI

DJI is a large manufacturer of drones based in China. In a recent US patent application (US 15/827787), DJI is seeking to protect a method and system for walking pets that could put dog walkers out of business. Figure 7 from the application, shown below, speaks for itself. The invention includes the drone walking the 'target object' along a predefined route, providing positive and negative stimuli to the animal, as well as recognising and managing 'waste generated by the target object'.

Amazon

Amazon was recently awarded a US patent (US 9,921,579) for delivery drones that may be configured to receive human gestures and, in response, instruct and adjust the drone's flight operations. Human gestures may include visible gestures, audible gestures, and other gestures capable of recognition by the drone. An example of an 'unwelcoming' gesture from the patent is shown below.

Amazon has clearly invested heavily in drone development and research, and is already planning for rapid deployment of drones in its parcel delivery service.

Another example of a drone patent recently granted in Amazon's portfolio (US 9,828,097) is for managing a worst-case scenario. While the drone is in-flight, the on-board computer is constantly evaluating the terrain and updating a potential crash sequence, should flight operation of the drone be disrupted. For example, the terrain information can identify bodies of water, forested areas, open fields and other locations (as in the figure below) to determine an area more suitable for dropping components of the drone if (or when) flight operation errors, malfunctions or unexpected conditions occur.

This technology may help to satisfy aviation authorities' concerns about autonomous passenger flight, and will go a long way to further implementation of drone technologies.

IBM

Also looking to improve package delivery is IBM – a technology company expanding into drones. A recent IBM US patent application (US 15/823,832), directed to the in-flight transfer of packages between aerial drones as shown below, highlights its ambitions.

This interesting technology could help to ensure a continuous supply of package-delivering drones.

Boeing

An Australian patent application (AU 2017219137) owned by The Boeing Corporation is directed to a method and system for non-destructive testing using an unmanned aerial vehicle.

While the target structure (110) is illustrated above as an I-beam, the system is equally well adapted for use in inspecting a wide range of other structures, including, but not limited to, power lines, power generating facilities, power grids, dams, levees, stadiums, large buildings, large antennas and telescopes, tanks, containers, water treatment facilities, oil refineries, chemical processing plants, high-rise buildings, and infrastructure associated with electric trains and monorail support structures. Thus, it is clear that Boeing is also interested in commercialising its drone technology in a variety of applications.

Department 13

The military, of course, has not forgotten about drones. Department 13, a US-based 'counter-drone' technology company, was recently awarded a contract with the South Korean army. It has a pending Australian patent application (AU 2016332918) directed to a method comprising detecting wireless communication systems by extracting identifying features of transmitted signals of interest. Essentially, they determine if detected signals correspond to a particular communication system used with a target device (eg a UAV). If the target is deemed a threat, they can force it to land or return home.

Department 13 has a moderate US patent portfolio, but only a small Australian patent portfolio and no patent protection in Korea. It will be interesting to see how it expands.

Brace for the Twitterstorm – US appeals court to decide whether embedded Tweets infringed copyright

In brief: A US district court judge has found that several online publishers infringed copyright when they embedded Tweets featuring a photograph protected by copyright. The decision has now been appealed, and could have far-reaching consequences for online media outlets. Lawyer Anna Conigrave reports.

Background

In July 2016, Justin Goldman took a photo of Tom Brady (an NFL player), Danny Ainge (the general manager of the Boston Celtics NBA team) and others in the street. Goldman then uploaded the photo to his Snapchat Story. The photo subsequently went viral on social media platforms, including Twitter.

A number of online publishers picked up Goldman's photo and displayed it alongside articles relating to the Boston Celtics' efforts to recruit basketball player Kevin Durant. Relevantly, the publishers did not download the photo and store it on their own servers. Instead, they embedded Tweets that featured the photo (and were hosted on Twitter's server) into their articles.

'Embedding' is a technical process, which involves adding an 'embed' code to the HTML code for a webpage. The embed code integrates content (eg an image or video) hosted on a third-party server into the webpage. The result is that when a user visits the webpage, they can see the content, without having to click on a hyperlink or do anything else.

In April 2017, Goldman commenced proceedings in the US District Court for the Southern District of New York against online publishers, including Time, Inc. and Yahoo, Inc., for violation of his exclusive right to display his photo. Following a motion for partial summary judgment by several of the defendants, in February 2018, Judge Katherine Forrest granted partial summary judgment to Goldman (Goldman v Breitbart News Network, LLC, No. 17-CV-3144 (KBF) (S.D.N.Y. Feb. 15, 2018)).

Findings and reasons

Judge Forrest found that the defendants had violated Goldman's exclusive display right. She rejected their argument that the 'Server Test' established in an earlier case (Perfect 10, Inc. v Amazon.com, Inc 508 F.3d 1146 (9th Cir. 2007)) should apply. Under that test, an online publisher only 'displays' an image if it is hosted on the publisher's server. Judge Forrest said that the US Copyright Act and Supreme Court jurisprudence 'provide no basis for a rule which allows the physical location or possession of an image to determine who may or may not have "displayed" a work'. She also distinguished Perfect 10 on its facts.

Pending appeal

In March 2018, Judge Forrest granted the defendants' motion to certify her decision for interlocutory appeal. She acknowledged that her decision had 'created tremendous uncertainty for online publishers'.

The state of the law in Australia

The Australian courts are behind in this area of law – they have not yet considered whether embedding or hyperlinking might constitute direct copyright infringement. The closest they have come is Cooper v Universal Music Australia Pty Ltd (2006) 156 FCR 380. In that case, the operator of a website that provided hyperlinks to websites containing infringing sound recordings was found to have authorised copyright infringement. Therefore, whichever way the Goldman v Breitbart appeal goes, it could be instructive as to how similar cases would be decided in Australia – we eagerly await the outcome!

Acquiring a business? How to 'transfer' social media accounts

In brief: Our IP team frequently assists with the sale or purchase of a business, advising on the scope of relevant IP to be transferred and how to transfer that IP. These days, businesses often have a number of social media accounts – YouTube, Facebook, Twitter, Instagram, etc – and the purchaser will wish to take ownership of those accounts. How can it be done? Senior Associate Kimberley Evans explains.

What do the relevant Terms and Conditions say?

A common question is: how does one actually 'transfer' ownership of a social media account? The short answer (which features quite often in IP advice) is: It depends.

Here is a brief summary (as of 1 June 2018):

Social media Can it be transferred?

YouTube channels

Yes, if the YouTube channel is linked to a Brand Account (see YouTube's support page). The owner of the Brand Account signs into the YouTube Brand Account and can select 'Transfer ownership' through Settings.

If the YouTube channel is not linked to a Brand Account, ownership cannot be transferred.

Instagram accounts

Instagram's Terms of Use prohibit a user from selling, transferring, licensing or assigning their account, followers, username or any account rights.

The Terms of Use further state that 'You cannot transfer your rights or obligations under this agreement without our consent.' Violating the Terms of Use can result in Instagram terminating the account.

Facebook Pages

Facebook Pages are controlled by 'administrators' (as opposed to accounts/profiles, which are controlled by 'users'). Changing administrators of a Facebook page effectively results in a 'transfer' of the account and is a relatively simple process, described in Facebook's Help Centre.

While Pages can be transferred by changing administrators, Facebook's Terms of Service state in 'Your commitments to Facebook and our community' that users may not transfer their accounts to another person without permission from Facebook.

Twitter accounts

Twitter's Terms of Service remain silent on the transfer of Twitter accounts.

However, the Twitter Rules, which form part of the Terms of Service, expressly prohibit the buying and selling of usernames.

There are suggestions on Twitter's community page about how to transfer control of a Twitter account (eg by changing the password for the account to something temporary, so the new owner can log in and update the account details to associate it with a new email address). However, given the ambiguity, there may be a cancellation risk.

LinkedIn Company Pages

LinkedIn's User Agreement states that a user agrees not to transfer any part of their account (including connections and groups). If you breach the User Agreement, LinkedIn has the right to terminate your account.

However, transferring a Company Page only involves changing administrators of the Page, which LinkedIn explains.

What should you do?

With the exception of YouTube, there is a common trend among the various social media terms of service or user agreements that accounts cannot be transferred. If an account is 'transferred', the account may be terminated by the service provider. However, a social media following can be very important for a business, and you wouldn't want to lose it because of a sale. When drafting a sale agreement, it is worthwhile considering whether it may be more appropriate to include an obligation on the vendor to provide the purchaser with access to operate the relevant social media account by updating the details, rather than requiring the account to be assigned. However, for abundance of caution, it may be best to seek consent from the social media platform to a transfer of an account.

The Federal Court's first look at enablement and support

In brief: The Federal Court has taken a first look at the enablement and support provisions of section 40 of the Patents Act 1990 (Cth) (the Act) as amended by the 'Raising the Bar' Act 2012 (Cth) (RTB). Senior Associate Tony Shaw reports on the case.

Background

In Encompass Corporation Pty Ltd v InfoTrack Pty Ltd [2018] FCA 421, InfoTrack admitted its REVEAL data information display technology infringed two Encompass patents, but asserted that both patents were invalid. While InfoTrack was ultimately successful, one interesting aspect of the case was the court's approach to the enablement and support provisions of s40 of the Act.

Section 40 sets out, among other things, that an invention must be described in the patent specification in a manner that provides a 'clear enough and complete enough' disclosure of the claimed invention. The specification must also provide 'support' for the claimed invention.

Enablement

In arguing that the claims of the Encompass patents were not enabled (ie the disclosure did not enable a person skilled in the art to perform the invention claimed), InfoTrack correctly noted that the invention claimed by Encompass only involved a method for querying remote data sources. Yet, the specification was silent in relation to whether the data sources were remote or local – ie the claimed invention was not the same as the invention disclosed in the specification. InfoTrack relied on that difference to argue that the claims were not enabled and should be revoked.

Encompass said that the difference between the claims and the specification did not matter, and all that was needed was that the specification should allow a skilled person to perform the invention. InfoTrack argued that the description should also 'make plain' the nature of the invention. Relevantly, before RTB a patent had to describe the invention 'fully' (ie make the invention plain).

By arguing as it did, InfoTrack advanced the proposition that pre-RTB provisions and case law were imported into the current s40. In rejecting this proposition Justice Perram looked to the plain English meaning of s40, as well as the Explanatory Memorandum to the RTB. It is clear that the court's position is that the relevant part of s40 only requires the description of the patent to be complete enough to allow a person skilled in the art to perform the invention, and there is not a further requirement to 'make plain' the nature of the invention.

Support

The old requirement for claims to be 'fairly based' on the specification was removed from the Act by RTB and replaced with a requirement that the claims be 'supported' by the specification. InfoTrack had to contend with the fact that, although the specification was indifferent or 'agnostic' as to whether data sources were local or remote, it still clearly 'supported' the narrower claims that specified the data source had to be remote. To address this, InfoTrack argued that RTB's effect was to 'strengthen' the 'fair basis' requirements.

Again, looking at the wording of the current s40 as well the Explanatory Memorandum, Justice Perram rejected this argument on the basis that the wording of s40 was plain and the Explanatory Memorandum sets out that the support requirement is to replace the High Court’s approach in Lockwood Security Products Pty Limited v Doric Products Pty Limited [2004] HCA 58. The former law in relation to fair basis has no 'continuing vitality with respect to the new provision'.

Where to from here?

While Justice Perram relied on the Explanatory Memorandum, which favours a UK/European approach to assessing enablement and support, there appears to be some merit in the observation that the Federal Court's approach may actually have 'lowered the bar' for s40.

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