Archive for September, 2008

Stupefy!

Wednesday, September 10th, 2008

in which the spell has landed ….

Harry Potter’s creator, JK Rowling, and her movie producers have successfully obtained an injunction against the publication of The Harry Potter Lexicon.  The judge also awarded US$6,750.

Marty has the text of Warner Bros Entertainment Inc. v RDR Books (SDNY 8 Sept 2008) here.

IPKat has a short summary based on media reports here.

NY Times report (free subscription required) here.

It’s not clear yet if there will be an appeal.

Wonder how it would play out here?  Of course, without looking at the book and seeing just how extensively the takings were, any comments would be worse than idle speculation.  We do have Full Court authority that taking lots of little snippets can constitute a substantial part but that, of course, is under appeal.

Security over a business name

Tuesday, September 9th, 2008

A restaurant granted a bank, Westpac, security over its assets.  When the business went sour and the bank came to enforce the security, it found the registration of the business name, Melba’s on the Park, had been transferred to someone else and another company incorporated under the name too.  Apparently, the ability to sell the restaurant business with its name would add significant value.

What to do?

Somehow, the bank has persuaded the Supreme Court of Queensland to grant declarations and injunctions transferring the names back to Westpac.

Mark Davison explores the judgment and how it should have worked here.

I guess if you were taking security over something as risky as goodwill, it certainly wouldn’t hurt to try and tie down the business name registrations etc.  In the good old (monochrome) days, people giving licences or lending on security in such situations used to get signed Cessation/Transfer of Business Name forms and shareholders’ resolutions to change the corporate name.  That led to powers of attorney and stamp duty issues.  And, of course, wouldn’t have worked here once the business name was in someone else’s name!

Case is Westpac Banking Corporation v. McMillan & Melbas On The Park Pty Ltd (formerly Credit Systems Australia Pty Ltd) [2008] QSC 2006

Madrid system and ‘foreign’ trade marks in the USA

Monday, September 8th, 2008

So, you’re not a USA-based trade mark owner and you’ve got your “trademark” registered in the US through the Madrid system.  That means you don’t have to worry about all those annoying requirements actually to use the trade mark there, doesn’t it?

Well, no.

Saunders & Silverstein  lay out all the pitfalls that you are going to have to hurdle here.

Lid dip to the Kat with the plummy accent.

Time shifting – remotely

Monday, September 8th, 2008

For those who heard my brief summary of Cartoon Network v Cablevision, in which the 2nd Circuit found Cablevision did not infringe copyright in movies and other tv content by adding a “home” taping service for its subscribers, Prof. Raymond Nimmer provides a detailed critique arguing:

This may be among the worst appellate court decisions in copyright law history[!]

here; more favourable review here.

A different Chrome IP issue

Saturday, September 6th, 2008

For those of you wondering what Google Chrome is all about, David Pogue does an excellent review and Google, of course, has pretty good explanatory materials including a comic.

Something your brand owners may want to start thinking about is the new monoline address/search bar: you type in a word and Chrome starts suggesting a range of alternatives.  See an example and watch the video here.

Nothing to worry about, perhaps, if you type in coke and get taken here but what happens if the top suggestion takes you here (takes forever to load)?

This brings up the trade mark/IP issues Marty Schwimmer spotted emerging in Japan here.

Oh, that other, EULA issue here, there and everywhere else too.

How innovative must an innovation patent be?

Friday, September 5th, 2008

In Delnorth v Dura-Post, Gyles J had to decide whether or not innovation patents for (e.g.)

A roadside post comprising an elongate body formed of sheet spring steel and having a longitudinal axis, a transverse axis transverse to said longitudinal axis, a front face and a rear face, said front and rear faces transversely extending generally parallel to said transverse axis, wherein said body is elastically bendable through 90 degrees from an unbent state about said transverse axis.

were valid and infringed.  More detail here and here and here.

Much of the judgment concerns (fairly) routine questions of interpretation.  On the question of validity, however, his Honour had to confront, so far as I’m aware really for the first time, the quality that comprises an innovative step.

For this purpose, s 7(4) of the Patents Act 1990 tells us:

(4)  For the purposes of this Act, an invention is to be taken to involve an innovative step when compared with the prior art base unless the invention would , to a person skilled in the relevant art, in the light of the common general knowledge as it existed in the patent area before the priority date of the relevant claim, only vary from the kinds of information set out in subsection (5) in ways that make no substantial contribution to the working of the invention.

Gyles J first rejected a submission that the innovation had to be coterminous with the invention as claimed at [47] – [51].  Then, his Honour outlined how the statutory test is to be approached:

52 There is no need to search for some particular advance in the art to be described as an innovative step which governs the consideration of each claim. The first step is to compare the invention as claimed in each claim with the prior art base and determine the difference or differences. The next step is to look at those differences through the eyes of a person skilled in the relevant art in the light of common general knowledge as it existed in Australia before the priority date of the relevant claim and ask whether the invention as claimed only varies from the kinds of information set out in s 7(5) in ways that make no substantial contribution to the working of the invention. It may be that there is a feature of each claim which differs from the prior art base and that could be described as the main difference in each case but that need not be so. Section 7(4), in effect, deems a difference between the invention as claimed and the prior art base as an innovative step unless the conclusion which is set out can be reached. If there is no difference between the claimed invention and the prior art base then, of course, the claimed invention is not novel. (emphasis supplied)

HIs Honour then had to decide what’s a substantial contribution to the working of the (claimed) invention:

53 The phrase “no substantial contribution to the working of the invention” involves quite a different kind of judgment from that involved in determining whether there is an inventive step. Obviousness does not come into the issue. The idea behind it seems to be that a claim which avoids a finding of no novelty because of an integer which makes no substantial contribution to the working of the claimed invention should not receive protection but that, where the point of differentiation does contribute to the working of the invention, then it is entitled to protection, whether or not (even if), it is obvious. Indeed, the proper consideration of s 7(4) is liable to be impeded by traditional thinking about obviousness.

and

59 …. The focus is upon working of the invention (as claimed) not to the degree or kind of variation from the kinds of information set out in s 7(5). In other words, the variation from the kinds of information might be slight but, if a substantial contribution is made to the working of the invention, then there is an innovative step.

That, of course, led to the question what qualifies as ‘substantial” and concluded in this context:

61 In my view the provenance of the phrase “make no substantial contribution to the working of the invention” indicates that “substantial” in this context means “real” or “of substance” as contrasted with distinctions without a real difference. That confirms my impression from construction of the words of the section itself.

Here there was an innovative step.  For example, and at the risk of gross over-simplification, the key point against one citation was that the invention was for a roadside post made of sheet spring steel which would happily spring back into position after being bent flat by a heavy object (such as a car).  The citation, however, was made of plastic.  The fact that the (claimed) invention used sheet spring steel made a substantial contribution to the way it worked:

63 …. Each of the claims involves construction by sheet spring steel. The SupaFlex post is plastic. The materials are quite different, although, no doubt, they each have the same objective. As I have endeavoured to explain, the question is not whether flexible sheet steel is better than flexible PVC – it is certainly different. It cannot be seriously argued that the material sheet spring steel does not make a substantial contribution to the working of the roadside post claimed in each claim.

Other citations failed also.

Finally, at [67] – [76], his Honour reviewed and applied the case law on whether or not a prior act had made the invention publicly available.

Delnorth Pty Ltd v Dura-Post (Aust) Pty Ltd [2008] FCA 1225 (13 August 2008).  Lid dip, Duncan Bucknell.

A case on computer software licences and back ups in Australia

Thursday, September 4th, 2008

A rare and interesting decision on the scope of (mainframe) computer software licences and s 47C (computer program back-ups) and s 47F (security testing) of the Copyright Act:

RWWA (which runs the West Australian TAB).  SAG granted it a non-transferable, non-exclusive licence to run the ADABAS database management software on its mainframe computer.  This was the software used for its its betting business.  

In addition to installing the software on its mainframe computer, RWWA arranged with KAZ to use KAZ’ mainframe for a ‘warm’ disaster recovery site: RWWA stored a mirror-image disk copy on KAZ’s mainframe computer.  Although a copy was stored on KAZ’s mainframe, it was not loaded into ‘memory’ except when being used in an actual disaster recovery situation or routine testing to ensure the back-up would work. Prior to this, RWWA had used back-up tapes stored off-site.

In a 268 paragraph decision, McKerracher J has held that RWWA did not breach of its licence by doing this and, in any event, was protected from copyright infringement by ss 47C and s 47F of the Copyright Act.  

The main issues were whether or not RWWA’s off-site storage and testing of the back-up and/or the involvement of KAZ entitled SAG to claim additional licence or maintenance fees (up to several hundred thousand dollars per annum).  In broad summary, SAG contended that

(1) storage and, in particular, the testing of the back-up was in breach of cl. 12.3 and required further maintenance fees or

(2) the involvement of KAZ was in breach of cl. 1.5 which prohibited ‘outsourcing’.

Cl. 1.5 provided:

1.5 The Licensee shall not assign, sub-licence, sell, lease, encumber, charge or otherwise in any manner attempt to transfer this Licence or any of its rights or obligations hereunder. The Licensee may not allow any third party to operate the System(s) on its behalf as part of any outsourcing, facilities management, application service provision or similar type of arrangement.

Clause 12.3 provided

12.3 Software AG hereby expressly authorises the Licensee to copy the System(s) (in object code only) and the Documentation for archival or emergency restart purposes PROVIDED THAT no more than (3) copies made by the Licensee of the then current system version shall exist at any time and all old versions shall be destroyed.

In rejecting SAG’s claims that cl. 12.3 did not protect RWWA, McKerracher J found:

186 Clause 12.3 is intended to be permissive. Objectively viewed, its purpose is to permit the licensee to reproduce the software to the extent that may be required for emergency restart purposes. To merely copy the distribution tapes or cartridges would be of limited practical use for that purpose. This is common ground amongst all experts. To construe cl 12.3 as being confined simply to copying tapes or cartridges of the unconfigured and uninstalled System would be a construction that is at least unreasonable and inconvenient but would also be unjust.

187 It is common ground that the System as supplied does include some source code. When the source code is converted to object code and is then linked to create load modules on installation of the System, the System as installed and configured then becomes a copy ‘in object code only’ and there is a copying of the System for emergency restart purposes.

and

203 As there is no technical meaning, the question is one of construction of the Licence Agreement. In my view the only sensible construction is that when the Licence Agreement refers to ‘use’ it means using the System within RWWA’s ordinary business or some other business, not for occasional testing for one DR Site. This must be so, in my view, if the DR Copy at the DR Site is authorised by cl 12.3 as I conclude that it is.

205 If the use by RWWA of the DR Site is authorised by cl 12.3, then the question as to whether or not the System is otherwise in use (for cl 1.1(d)), in my view, falls away. I consider that the use is so authorised.

Further, the copy was made for the purposes of emergency restart:

209 In a business which has an extremely high turnover of transactions and a substantial financial turnover, each day of delay is significant. In my view there is no scope for the argument that emergency restart simply means that the business has sustained a disaster or emergency which will require a restart at some leisurely pace in a week or so. In my opinion the whole concept of emergency restart means that as an essential part of a highly sophisticated business environment, the restart is required as quickly as reasonably possible.

Taking into account similar considerations, his Honor found that ss 47C and 47F would also operate to protect RWWA.

Nor was there any ‘outsourcing’ in breach of cl. 1.5:

249 Mr Fink who has had very extensive experience in the mainframe industry rejects the suggestion that the arrangement or contract between KAZ and RWWA is one which constitutes outsourcing in any sense. Rather, as a matter of practice and in accordance with the nature of the arrangement between KAZ and RWWA by its contractual documents, what KAZ provides to RWWA is an environment for the equipment on which the DR Copy will be loaded should an emergency occur. RWWA retains responsibility for the DR process. There is no evidentiary basis for suggesting that KAZ is in any way involved in operating the System. Without that evidence which, had it been available, may have been the closest there was to any ‘outsourcing’, none of the other suggested actions could constitute ‘outsourcing’ as it is used in the Licence Agreement.

Racing & Wagering Western Australia v Software AG (Australia) Pty Ltd [2008] FCA 1332 (29 August 2008)

What are you going to do

Wednesday, September 3rd, 2008

Twitter is a kind of IM (instant messaging, for those of you even squarer than me) for web browsing.  It used to be mainly for …; well, anyway, people who can’t hang around waiting for the email to come through are increasingly adopting it.

Some twitters (or is that tweeters?) are adopting the persona of fictional characters.  The creative ones getting right into character.  Marty asks the questions

Read more about Twitter, including a neat little video, here.

p.s.  I’d like to finish off with a “tweet tweet”, but your groans might be spared in case there’s a letter of demand out there somewhere.

IceTV transcript is up

Tuesday, September 2nd, 2008

and it certainly looks like House of Commons was right to warn database owners to be very afraid.

Gummow J opened with a bouncer to Counsel for Nine Network, the respondent, pointing out that the House of Lords in Ladbroke v William Hill overruled Lord Diplock who was then sitting as Diplock LJ in the Court of Appeal.  Followed up with:

GUMMOW J: What I am putting to you is that do not think that in this Court William Hill is the end of a rainbow.

Then:

GUMMOW J: There is real question of what this notion of originality means in this “electronic age”, is there not?

Gummow J went on to describe Cramp v Smythson from the 1940s as the “elephant in the room” and then

GUMMOW J: I suppose what I am putting to you is, maybe some of the considerations that underpin the approach in Feist conceivably could underpin an approach to the notion of substantiality at the later stage in our law.

although his Honour did indicate that Counsel’s rejection of the relevance of Feist under our Act “may well be right”.  Nonetheless:

GUMMOW J: There will be a grant of a special leave in this matter. The Court will allow one and a half to two days, I think, and we expect to have the assistance of counsel to deal with this matter thoroughly without any reticence in starting at the bottom, so to speak, and we expect counsel to be familiar with the academic writing in this field. They have already been referred, I think, to an article by Dr Deazley in [2004] Intellectual Property Quarterly 121. There is also what may be a useful article by Professor Sterk in Michigan Law Review for 1996, Volume 94, pp 1197 called Rhetoric and Reality in Copyright Law. There is a lot of other material out there as well. I hope the arguments will be informed with all of that, at least in a suitable background.

We’ll have to wait a bit longer to see what the actual questions are.

Gripe sites and branding

Tuesday, September 2nd, 2008

What do you do when someone registers the domain name [yourbrand]sucks.com?  What should you have done before it got registered?

Apparently, more than 20,000 domain names take the form [yourbrand]sucks.com.  Sometimes, the person that registers it is just after your money (and lots of it); sometimes, they have a very serious grievance with your company and they want to air all the dirty details out there in cyberspace.

When they’re just after lots of your money, WIPO’s Overview of WIPO Panel Views on Selected UDRP Questions indicates that a majority of panellists will probably find the name is confusingly similar to your domain name (but by no means all), but your chances on the other 2 requirements are very hard to predict. Compare para. 1.3 to 2.4.  

 

In Australia, it is likely that a genuine gripe site won’t infringe your trade mark for the simple reason that the griper is not using your trade mark as a trade mark.  (I’m not sure if it would fall within s 122(1)(b), but s 120 specifically requires use as a trade mark and the cases derived from Irving’s Yeastvite v Horsenail indicate that use to refer to the trade mark owner’s own product marked with the trade mark is not use as a trade mark).  Of course, the griper might be engaging in defamation or slander of goods or something similar.

Now, Fairwinds Partners, who are Internet Strategy Consultants, have published a report via brandchannel (pdf) on this issue from a marketing perspective.  The report looks at what’s happening including the clever, but nonetheless brave, strategy adopted by Loews to use the name to field and address their customers’ concerns.

Brave because there aren’t that many brand owners who are going to want to see that word “sucks” joined with their prized asset; clever because … well, they are doing what the customer wants in the main: finding out about the problem and dealing with it.