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Intellectual Property Bulletin – January 2002

In this issue: Our intellectual property lawyers and patent and trade marks attorneys review the latest cases and legislative developments affecting patents, copyright, trade marks and the Internet.

Patents – Changes in Australian patent law: what they mean for you

In brief: The Patents Amendment Act 2001 will come into force on 1 April 2002, making significant changes to Australian patent law and practice. Chris Bird Special Counsel with Allens Arthur Robinson Patent & Trade Marks Attorneys looks at the background to this reform, the main changes that have been made and, crucially, the implications for you and for the industry in general.

A recent report on Australian intellectual property legislation recommended that it should be tougher to get a patent, and this recommendation has now been adopted in the new Act. There are three reasons for this:

  1. Protecting weak innovations excessively restricts competition;
  2. Higher thresholds will give greater confidence in a patent's validity and reduce uncertainty for both the patent owner and the public; and
  3. Making it harder to get a patent should reduce the costs and complexity of later litigation.
How will it be tougher?

The new law raises the bar in three ways.

First, there is the 'prior art base' – basically, what is known in the relevant field of the invention. The prior art base has been extended to publicly available information anywhere in the world whether disclosed in writing, orally or by use. Further when testing obviousness of an invention, it will now be possible to combine pieces of information if a skilled person could reasonably be expected to do so. Conversely, at the moment, you have to show that different documents would be regarded by a skilled reader as a single source of information. Not surprisingly, this is very hard to show.

This is a major shift in Australian law, which brings it into line with international practice.

The second way in which it will be harder to get a patent relates to the current grounds for rejection. Currently, the Patent Office may not refuse your application if it finds no lawful ground of objection – in other words, your application has the benefit of the doubt. But this is out of step with international practice, and the new Act shifts to a 'balance of probabilities' approach. Now, you have to show that your application positively clears the hurdles in relation to novelty and obviousness. This requirement is designed to make it more likely that granted patents are valid.

Finally, the third way in which it is going to become harder to get a patent relates to searches of the existing state of knowledge. Today, the Commissioner of Patents can only ask you to provide the results of searches carried out in other countries for applications filed outside Australia about the same invention. This is, in fact, a very confined enquiry. The new provisions require you to disclose the results of all searches both here in Australia and abroad up until the grant of the patent. This new duty of disclosure is likely to lead to a more comprehensive examination of patent applications. But it also places a greater burden on you as an applicant – as well as on us, your patent attorney – to provide the required full disclosure to the Patent Office. Failing to make full disclosure may not lead to loss of the patent. You will not be able to amend your patent if you fail to comply with this new duty of disclosure, and your amendment attempts to avoid an invalidity claim based on information that you should have disclosed.

More changes coming
  1. The grace period: Many an application has foundered through disclosures by inventors or applicants before lodging a patent application. To avoid this happening some countries offer a 'grace period' which enables an application to be made within a specified period after initial publication of the invention.
    Although the new Act does not touch on the subject, the Government has committed itself to implementing a 12 month grace period, similar to that under US practice. It is likely that this change will be implemented as an amendment to the regulations and timed to commence at the same time as the Act's introduction, 1 April 2002.
    There are, however, dangers in adopting these provisions. One important market that does not have a grace period is Europe. So any disclosure before lodging a patent application would destroy potential rights there.
  2. The 'prior use' defence: There is an exemption from infringement that permits you to carry on using a process or making a product, provided you were doing so at the time someone lodges a patent application. The new Act widens this exemption, but as a 'prior user' you still face a major hurdle in proving your right to the defence.
  3. Extensions of time: To harmonise with formal international registration requirements, the Act widens the Commissioner's power to grant extensions of time.
  4. Pre-grant re-examination: In another move designed to increase the validity of granted patents, the Act will empower the Commissioner to conduct pre-grant re-examinations of applications, for instance when the validity of the patent is called into question through new information.
So, what does all this mean for you?

Although there are issues still to be resolved before this Act becomes law, particularly the details of the accompanying amendment to the Patent Regulations, it is clear that this Act represents a major reform of Australian patent law, one that demands a complete overhaul of your patent strategy.

Strengthening Australian patent rights is a positive step for both patent owners and the public concerned with their freedom to adopt or develop new technologies. Further, aligning Australian patent standards with those already in place overseas is in the interests of local industries, particularly those focused on overseas markets.

Even so, it will be some time before the Australian courts deal with these new provisions, and it may therefore be some years before the practical impact of them becomes clear.

Allens Arthur Robinson Patent & Trade Marks Attorneys are of course watching this situation very closely. We will continue to provide comprehensive and up-to-date reports.

Copyright – Who has the right to rent DVDs?

In brief: The DVD rental market is increasing at a rapid pace, with some estimates putting the number of DVD players in Australia close to 500,000 by the end of the year. A recent decision of the Federal Court has major ramifications for this market, and may affect other related industries as well1. Lawyer Jonathan Barlow reports.

DVD is an abbreviation of both Digital Video Disc and Digital Versatile Disc. Either way, it describes a device or format which digitally stores material – including audio-visual material – and enables such material to be accessed in a far more flexible manner when compared with the analogue VHS format.

In the Federal Court of Australia, Emmett J had to consider the nature of copyright in a motion picture DVD and corresponding rental rights for computer programs under the Copyright Act 1968 (Cth) (the Act), and decided that:

  • in playing a motion picture DVD, a DVD player does not make a substantial 'copy' of the cinematograph film embodied in the DVD or a substantial reproduction of any embedded computer programs;
  • material on a motion picture DVD which constitutes a 'computer program' does not include audio, visual and caption content of the DVD disc; and
  • the Act does not grant a rental right in respect of copyright subject matter embodied in motion picture DVDs, particularly computer program elements.
Background

Warner Home Video (WHV) is one of Australia's major suppliers of motion picture DVDs. The Australian Video Retailers Association (AVRA) represents various video retailers around Australia, most of whom were also parties to this action.

WHV proposed to introduce an additional charge on retailers for renting DVDs to consumers. The introduction of the charge was dependant on WHV being able to show that, under the Act, it had a right to prevent owners of DVD discs from renting out those discs. This is a novel issue and the case has been followed closely by the industry and in the media.

Under the Act, copyright owners have an exclusive rental right in respect of only two types of subject matter: sound recordings and computer programs. Importantly, there is no exclusive rental right in relation to films. Further, section 31(5) states that the computer program rental right:

...does not extend to entry into a commercial rental arrangement if the computer program is not the essential object of the rental.

Thus Emmett J had three main questions for determination:

  • Did the playing of a motion picture DVD constitute copying of the film embodied in the DVD in contravention of the Act?
  • What 'computer programs' (as defined in the Act) are embodied in DVDs?
  • Does the s 31(5) exception apply, such that the computer program (or, possibly, programs) is not the 'essential object' of the rental?
Temporary and ephemeral copying of a film: a copy in RAM

Emmett J considered that temporary and ephemeral copying of the film in a DVD player's RAM during the playing process was not a copy of the whole or a substantial part of the film under the Act, notwithstanding that an article that embodies a film in an electronic machine readable form is taken to be a copy of the film (s 21(6)). The fact that very small sections of the film were copied into RAM for a short period (as a buffer) but were then removed and were not thereafter reproducible, was relevant in the finding that a substantial copy of the film is not made in the course of playing.

Similarly, in respect of a computer program embodied on a motion picture DVD, Emmett J found that the playing of the DVD does not ordinarily amount to a reproduction of the whole or a substantial part of the computer program.

DVD films: which parts are also computer programs?

'Computer program' is broadly defined in the Act as:

a set of statements or instructions to be used directly or indirectly in a computer in order to bring about a certain result.

Emmett J equated the interactive menu system (the result of a DVD authoring process) with a computer program. Emmett J said that: '...in the case of a DVD disc, the computer program is intended to cause the DVD player to play and navigate through the audio, visual and caption content of the DVD disc.'

His Honour found that the definition of 'computer program' did not extend to the original material embodied in a DVD disc (ie. the audio, visual and caption content). He held that 'computer programs' on a DVD are limited to the program instructions.

That decision relies on finding a difference between an application and its associated data or content – a recurring theme in judicial reasoning. His Honour did not consider whether the film itself, as stored in its encoded form on a DVD, would fit within the definition of 'computer program'. When encoded for a DVD, a film becomes a series of instructions to a decoder (the DVD player) to recreate the original. It is arguable that the DVD encoded version of a film satisfies the statutory definition of 'computer program' and the decoded result the definition of 'cinematograph film'.

Essential object of the rental

Having found that 'computer programs' on a DVD are limited only to the program instructions (such as menu and branching structure), Emmett J went on to consider whether these program instructions were 'the essential object of the rental'.

Emmett J considered that 'essential object' referred to the purpose of the rental, rather than the subject-matter. In that sense, he found that the essential object of the rental was neither the computer program nor the cinematograph film, but in fact was to place the renter in a position to experience the video and audio content of the DVD discs.

Under this interpretation, it is difficult to see how a multimedia computer program could ever be the essential object of a rental.

Accordingly, the court in this case found there is no rental right in relation to copyright subject matter embodied in motion picture DVDs.

An appeal to the Full Federal Court is expected.

Copyright – ACCC succeeds in trade practices case against major record companies involved in parallel importing

In brief: The ACCC was successful in its recent actions against Universal and Warner and individual executives of each company for breaches of sections 46 and 47 of the Trade Practices Act 1974 (Cth)2, writes Lawyer Bashi Kumar.

The ACCC brought actions against Universal and Warner (the defendants) and certain executives of each company for breaches of ss45, 46 and 47 TPA. The allegations related to the marketing in Australia by the defendants of sound recordings, primarily embodied in compact discs (CDs). On 30 July 1998, the Copyright Act 1968 (Cth) (Copyright Act) was amended to permit parallel importation of CDs provided that those CDs were manufactured with the license of the copyright owner in the country of manufacture3.

In order to parallel import and sell the CDs, the importer or vendor must be able to establish that the sound recording was manufactured with the licence of the copyright owner in the country of manufacture. Given that the identity of the copyright owner is not necessarily a matter of public record in some countries, and that many record companies are members of multinational groups of companies, it may be difficult (if not impossible) for the importer or vendor to show that the copy was 'a non-infringing copy'.

This case is primarily concerned with the steps said to have been taken by Universal and Warner respectively to deter importers and others from parallel importing in the period shortly after the copyright amendments were passed. The ACCC claimed that Universal and Warner had engaged in conduct which constituted a breach of ss45, 46 and 47 TPA. In particular, it was claimed that the defendants each:

  • were a part of a worldwide group of companies which, at the relevant time, manufactured and distributed CDs;
  • had, at any time, some catalogue music in the 'charts', that is, music that is highly popular although usually for a relatively short period, such as, for example, 'the Top 40' list (chart music); and
  • were, prior to the legalisation of parallel importation, the sole source of supply of chart music from their respective catalogues.

In addition, the ACCC claimed that:

  • as suppliers had no choice as a matter of practical or commercial necessity but to obtain supplies of chart music CDs from the defendants, small independent wholesalers could not supply, prior to the parallel importation provisions being legalised, an exclusive or comprehensive range of chart music CDs;
  • the defendants adopted policies whereby retailers who stocked parallel imported CDs were vulnerable to summary decisions to cease trading or alter existing terms of trade (including benefits such as wholesale discounts, marketing subsidies, support of sales and promotional teams, extensive point of sale material, television, print and radio advertising and promotional visits) and, in some cases, acted on those policies; and
  • the defendants entered into agreements with the Indonesian representatives of major record companies to prevent or minimise the export of CDs from Indonesia to Australia (the overseas agreement).
Findings

Market: The parties agreed that the relevant markets were the wholesale and retail markets for recorded music, of which CDs formed by far the greater segment. Technologies relating to the downloading of digital information which translated into music and the burning of CDs from that information were also disregarded as they are in their infancy.

Section 45 allegations: In summary, s45 TPA provides that a corporation shall not enter into a contract, arrangement or understanding that has the purpose, effect or likely effect of substantially lessening competition.

In Hill J's view, the evidence did not establish that the defendants themselves entered into the overseas agreements in contravention of s45 TPA.

Section 46 allegations: In summary, s46 TPA provides that a corporation with a substantial degree of power in a market (market power) shall not take advantage of that power for the purposes of eliminating or injuring a competitor or preventing or deterring entry of a person, in that or any other market.

Whether or not the defendants each had market power was rigorously contested by the economic experts for each party. According to Mr Ergas, the ACCC's expert, although Warner and Universal each had less than 30% market share respectively, each had the ability to act in a manner unconstrained by its competitors, whether that included the supply of CDs at a nominated price or the supply of non-price benefits such as marketing and promotional support. In addition, each enjoyed, at different times, temporary monopolies in relation to particular chart music titles, as there are high levels of product differentiation in the recorded music market.

According to Professor Hausman, the defendants' expert, a low market share or a market share of less than 30% was not synonymous with a substantial degree of market power. Moreover, in product differentiated industries, a small shift in consumer preference will result in a change in price as evidenced by the shift in CD titles from the chart music list to the back catalogue in a very short time. This showed that substitution occurred as between the chart music titles held by each recording company. As well, the record companies faced significant countervailing power from large music retailers such as HMV, Big W, and Target.

Hill J decided that a particular record company could have a degree of market power even if its market share was less than 30%. Further, this is not an industry in which market share is the sole determinant of market power. Hill J was prepared to accept Mr Ergas' view that the ability to act in a manner unconstrained by competitors included conduct in relation to non-price elements.

A similar view was adopted by Finkelstein J in ACCC v Boral (2000) 106 FCR 328 (presently on appeal to the High Court, leave to appeal having been granted on 14 December 2001). This is despite the fact that Hill J did not consider copyright law, economies of scale relating to distribution and high advertising and promotional costs as barriers to entry.

Instead, his Honour said that the statutory requirement of copyright proof prior to parallel importation and the behaviour of incumbent firms could constitute barriers to new entry. Moreover, as a matter of commercial reality and in order to meet consumer demands, retailers (particularly small retailers unable to import effectively) will need to stock CDs from all the major record companies to supply the chart music list.

Accordingly, Hill J found that the conduct of the defendants would be regarded by business people in Australia as involving both market power and the exercise of that power. This is especially the case in relation to the small retailers who lacked the countervailing power to import effectively.

Hill J held that the defendants each took advantage of their substantial market power for the purposes of preventing the entry into the wholesale market of both importers in Australia and exporters from overseas of sound recordings under the Universal or Warner labels. The defendants sought to show that their conduct was guided by sound business justifications so as to negate the finding of an anti-competitive purpose.

Both Universal and Warner sought to argue that their actions were aimed at minimising piracy and free-riding. The legitimising of parallel importation provides substantial opportunity for the importation of counterfeit CDs into Australia as legitimate products mixed with pirate products are frequently undetected by Customs resulting in revenue losses to the record companies.

In addition, retailers who import from overseas free-ride on the defendants' marketing and promotional programs as they take the benefit of such promotional investments without giving returns. For these commercial reasons, the defendants had taken steps to limit supply or reduce favourable terms of trade. Hill J rejected these arguments.

Section 47 arguments: Section 47 provides that a corporation shall not in, trade or commerce, engage in the practice of exclusive dealing. The ACCC alleged that the defendants engaged in exclusive dealing when they offered to supply CDs on the condition that retailers would not acquire the CDs from competitors overseas.

Due to the intervention of the ACCC, the period of time in which this condition was imposed was brief. The question arose as to whether there was a substantial impact on competition given this intervention. Hill J held that since he had already formed the view that the defendants took advantage of their market power in the wholesale market, there was likely to be an impact on competition by force of their conduct. This was sufficient to found the case against the defendants for the purposes of s47 TPA.

Accessorial Liability: Section s75B TPA attaches accessorial liability on those knowingly involved in a contravention under the TPA.

Certain executives of the defendants were found to be knowingly concerned in the essential facts which constituted a contravention under s75B TPA.

A hearing on appropriate orders as to penalties is due to be heard by March 2002.

Trade Marks – 'McCHINA' restaurants: McDonald's fails to prevent registration

In brief: Australian trade mark owners are considering the impact of a UK High Court decision which shows both the limit of the rights which well-known trade mark owners may face in attempts to prevent others from registering 'similar' marks and the importance of the evidence led in such oppositions. Senior Associate David Yates reports.

Although the result was very much affected by the evidence in the case, the High Court's approach will be of interest to managers of Australian trade mark portfolios, and in particular to the owners of well-known Australian registered trade marks involved in the early stages of similar opposition disputes.

The applicant, Mr Yuen, appealed against a decision of a Hearing Officer of the UK Trade Marks Registry in which the applicant's application to register the mark 'McCHINA' had not been accepted for registration following opposition by McDonald's Corporation and its UK subsidiary.

The applicant sought to register the mark 'McCHINA', which was filed on 10 June 1992, in respect of various goods in classes 29, 30, 31 and restaurant services in class 42, which could be broadly described as 'food and restaurant services'. The provisions of the Trade Marks Act 1938 (UK) applied. The opponents contended that registration should be refused by virtue of ss 11 and/or 12(1) of the 1938 Act.

The appropriate test for s 12 was described by Mr Justice Neuberger as follows: assuming user by the opponents of their marks in a normal and fair manner for any of the goods or services covered by the registrations of those marks, is the tribunal satisfied that there will be no reasonable likelihood of deception or confusion amongst a substantial number of people if the applicant uses the mark 'McCHINA' normally and fairly in respect of any goods or services covered by their proposed registration?

His Honour described the test in relation to s 11 as: having regard to the opponents' use of their marks, is the tribunal concerned satisfied that the mark applied for, 'McCHINA', if used in a normal and fair manner in connection with any goods or services covered by the registration proposed will not be reasonably likely to cause deception and confusion amongst a substantial number of persons? In both cases the burden of proof was on the applicant.

There were about 340 McDonald's restaurants in the UK prior to June 1992. In 1991, the McDonald's group spent nearly £23 million on advertising, his Honour concluding that its marks are very well known. Apart from the marks 'McDONALDS', 'MACDONALDS' and 'MAC', there was evidence of literature, posters, packaging and publicity material using the prefix 'Mc'. Some of the names currently used by the opponents bear titles of an oriental nature, including 'CHICKEN MCNUGGETS SHANGHAI', 'ORIENTAL MCRIB' and 'MCFORTUNE COOKIE', although these were not used until after 1992.

The opponents led evidence of a survey by which interviewees were asked three questions:

  1. What would be your immediate reaction on hearing that a restaurant had recently opened in your area called 'McCHINA'?
  2. If a restaurant called 'McCHINA' was to open in your area would you see it as being part of an existing chain of restaurants?
  3. Which existing chain of restaurants?

The survey was carried out during the middle of March 1996 and 2,000 people were interviewed. The results were, overall, favourable to the opponents. The opponents' evidence also included a statement made in March 1999 from the manager of one of the opponents' suburban restaurants. He stated that in the six months prior to March 1999 he had received two telephone calls from different members of the public 'asking if the McChina restaurant was in any way part of or accessible from the McDonald's restaurant' which he managed. There were no other instances of confusion relied upon by the opponents.

Justice Neuberger held that the applicant had discharged its onus under s12: there was no real tangible risk of confusion or deception amongst a substantial number of persons. His Honour highlighted the difference between the applicant's proposed registered mark and the opponents' registered marks.

Justice Neuberger disagreed, however, with the Hearing Officer's decision in relation to s 11 and also held that the applicant had discharged its onus under this section. His Honour did not consider that the survey assisted the opponents. The survey, with its various defects (which were considered in detail in the judgment), did not establish that the use of 'McCHINA' would be reasonably likely to cause deception and confusion amongst a substantial number of persons, having regard to the opponents' user of their marks.

The evidence of the instance of confusion itself had difficulties. His Honour noted the possibility of the opponents using their marks in relation to oriental style food, although he did not regard it as a point of great weight. His Honour stated:

So far as the opponents' case under section 11 is concerned, it appears to me, on analysis, that, as under section 12, they are virtually seeking to monopolise all names and words with prefix 'Mc' or 'Mac', at least in relation to food or restaurant services. This is supported by the fact that there is no similarity between China, on the one hand, and, on the other hand, Donald or any of the other suffixes in the opponents' marks... I am prepared to accept that it is possible in principle for a person to have built up a reputation in specific names and marks beginning with 'Mc' and/or 'Mac' which is so great that he could successfully object to the registration by anyone else of any mark beginning 'Mc' or 'Mac' in the same class of goods or services.

Justice Neuberger highlighted the lack of similarity between the applicant's mark and the opponent's marks, the fact that the applicant was prepared to accept a condition limiting the use of his mark to oriental food and oriental food services, the lack of evidence, even after starting the oriental style food range, of any association of the opponents' marks with oriental foods and oriental food services, and the absence of any evidence of confusion, although the applicant had been trading on McCHINA for nearly ten years.

The applicant's appeal was allowed and the registration of the mark 'McCHINA' proceeded.

Trade Marks – How do you choose your Scotch whisky?

In brief: Do you choose your Scotch whisky by reading the label or do you recognise the bottle shape and label arrangement? There can be a crucial legal difference, writes Colin Oberin (view CV) Partner with Allens Arthur Robinson Patents & Trade Marks Attorneys and Articled Clerk Jacky Mandelbaum.

What maketh the mark

We recently obtained acceptance of an application to register – as a trade mark – the shape and label arrangement used on JOHNNIE WALKER Scotch Whisky bottles4. This decision is important because it shows that a bottle shape and label arrangement can now be regarded as a trade mark in its own right. The case also demonstrated the importance of presenting evidence of the market's perception of what constitutes a trade mark of such an iconic product.

The trade mark (pictured) consists of a smooth-edged, square-shaped bottle together with a specific arrangement of three labels. The Trade Marks Office (TMO) originally considered and examined this application as a shape mark. At the hearing, AAR Patents & Trade Marks Attorneys Partner, Colin Oberin successfully argued before the Registrar of Trade Marks, that the application should be considered as a mark for aspects of packaging. Given the numerous aspects of the mark, he argued that to consider the mark merely as a shape mark was far too restrictive.

The objections

Various examiners objected to the application on the grounds that:

  • it did not distinguish the product in the marketplace and that other traders may legitimately wish to use this bottle shape;
  • the shape lacked distinctiveness as it was functional; and
  • the words on the labels, rather than the packaging, distinguished the product.

Extensive evidence of sales and advertising figures, together with declarations from prominent liquor buyers for major retailers giving evidence of their recognition and association of the JOHNNIE WALKER mark, failed to convince various examiners to accept the application.

Reputation

In view of the long-standing use and reputation of JOHNNIE WALKER Scotch Whisky, the examiners' objections were taken to a hearing before the TMO registrar. Evidence showed the mark had been used continuously since 1906, and the shape and label arrangement shown on advertising and posters was remarkably consistent over that time. Evidence of extensive use and registration of the mark in the UK was also submitted.

Other significant evidence included two books that described the JOHNNIE WALKER Scotch Whisky bottle shape and label arrangement as an example of a significant 20th century trade mark. One of the books included pictures of various imitations. It was this evidence of recognition by others of the distinctive arrangement that convinced the hearing officer that the mark did distinguish JOHNNIE WALKER Scotch Whisky.

Comment

This decision highlights the importance of considering whether a trade mark consists purely of a shape, or whether it may be more. In light of the TMO's reluctance to register shape marks, it may be preferable to also highlight other aspects of packaging. This case also shows just how strong evidence of use must be in order to convince the TMO that a shape mark is, in fact, able to distinguish goods.

The Internet and Domain Names – Recent developments

In brief: In Australia there have been no direct judicial comments to date on the possibility of the registration or use of a domain name constituting trade mark infringement. However, given the potential applicability of trade mark law to cases of 'cybersquatting', it is pertinent to note two developments not specifically within the Australian trade mark realm which indicate the approach courts may adopt in the future5. Research Assistant Marina Lloyd Jones reports.

High Court first to consider issue of defamatory publication on the Internet – Gutnick v Dow Jones & Co Inc [Supreme Court of Victoria – Heidgan J, 28 August 2001]

Australia's High Court is set to become the highest appellate court in the world to consider the issue of jurisdiction for the purposes of publication of defamatory material on the Internet. In relation to a defamation action brought by prominent businessman Joseph Gutnick against Dow Jones6, the High Court recently granted the publisher defendant special leave to appeal against a decision of the Supreme Court of Victoria which, for the purposes of jurisdiction, found in favour of Gutnick.

The allegedly defamatory article appeared in a magazine published by the defendant which was available on a subscription website with a number of Australian subscribers. When Gutnick commenced proceedings in the Supreme Court of Victoria, complaining of publication in Victoria only, Dow Jones argued that the online version was published not in Victoria but in New Jersey, the site at which material was uploaded from the Web server each time a copy of the material was requested. They alleged that downloading was an independent action, akin to 'self-publishing', for which they could not properly be held responsible.

The plaintiff insisted that downloading was an intended and natural consequence of the defendant's control of the entire process of publication, from procuring subscribers to its website, to composing the article and placing it on its Web server. The plaintiff's argument, ultimately accepted by Hedigan J, was that actionable publication does not occur unless and until a defamatory meaning is conveyed to a hearer or reader, in other words where the subscriber 'downloads' the article onto their computer screen.

The High Court appeal, likely to be heard in mid-2002, will be closely watched by interested parties from around the world aware that the decision may well be considered and followed in a number of other jurisdictions.

New Zealand High Court classifies domain name registration as threat to infringe trade mark – DB Breweries Ltd v The Domain Name Company Ltd [High Court of New Zealand – Randerson J, 15 March 2001]

In New Zealand, the registration of a domain name has recently been held to constitute a threat of trade mark infringement in DB Breweries Ltd v The Domain Name Company Ltd & Ors7. The plaintiff, a well-known New Zealand beer brewer who had registered the trade mark 'DB' in relation to beer and related beverages, claimed that the registration and offering for sale of the domain name <db.co.nz> amounted to a threat of trade mark infringement, passing off and breach of the Fair Trading Act 1986.

The defendants argued that they had not used the DB trade mark in relation to the goods or services for which the marks were registered but rather for the unrelated business of trading in domain names. Randerson J rejected the defendants' applications to strike out the claims against them, relying on the One in a Million case8, a significant UK Court of Appeal decision involving passing off and trade mark infringement claims alleged in very similar circumstances. In doing so, he endorsed the arguments of the plaintiff that:

The (defendants') registration and/or continued registration and offering for sale of the db.co.nz domain name registration constitutes a threat to use a sign identical to the DB trade mark in relation to the provision of services or the offering of goods identical or similar to the goods or services in respect of which the DB trade mark is registered, such use, insofar as necessary, being likely to deceive or cause confusion.

Though the defendants argued that the domain name had not yet been used to offer goods or services for sale using the mark, Randerson J was satisfied that the threat of future use, pending trial, could be sufficient to justify injunctive relief.

Footnotes
  1. Australian Video Retailers Association Ltd v Warner Home Video Pty Ltd [2001] FCA 1719 (7 December 2001)
  2. Australian Competition and Consumer Commission v Universal Music Australia Pty Limited [2001] FCA 1800 (14 December 2001)
  3. Prior to this, parallel importation provisions prohibited the importation of records embodying sound recordings from a foreign country without the license of the Australian owner or licensee of copyright even where those goods were lawfully manufactured in that foreign country.
  4. Registration of Trade Mark No. 781534 'BOTTLE WITH OBLIQUE LABEL' in the name of Guinness United Distillers & Vintners B.V.
  5. For a detailed analysis of the area, see the newly-inserted Chapter 9 of Lahore's Patents, Trade Marks and Related Rights looseleaf service (Butterworths)
  6. Gutnick v Dow Jones & Co Inc [2001] VSC 305 (28 August 2001)
  7. High Court Auckland, M724/00, 15 March 2001 per Randerson J
  8. Marks & Spencer plc and Others v One in a Million Ltd (1997) 42 IPR 309

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