December 2008

How much reputation is enough?

Leave a Comment / Trade marks / / / , , ,

The Full Court has allowed Hansen’s appeal from the dismissal of its trade practices/passing off action against Bickford’s Monster Energy drinks.

Before the trial judge, it was conceded that Bickford’s get up would be confusingly similar to Hansen’s, but the trial judge found that Hansen did not have sufficient reputation with the public in Australia to found its claim.

Hansen had never traded here nor sold its energy drinks here.  However, there was evidence that it had “indirectly” promoted its brand name and get up here through activities such as sponsorships of sporting events and logos on clothing.

The Full Court reported the trial judge as finding that Hansen could not succeed unless it established a relevant reputation within its target market in Australia – males between the ages of 18 to 30.  His Honour went on to find the evidence was insufficient to support such a finding.  The indirect advertising was too fleeting and occasional to establish a reputation within the target youth market in Australia “other than perhaps some extreme sports enthusiasts”.

The Full Court allowed the appeal on the grounds that the “target market” was not the relevant section of the public to test Hansen’s reputation. It was necessary only for Hansen to show that it had a reputation in Australia with any relevant section of the public.

Tamberlin J (with whom Siopis J agreed) held:

[46] … In our view, the language of the section and its purpose do not require the Court to select any particular group as targeted by advertisers when assessing whether a breach has occurred. The fact that certain pieces or strategies of advertising may target a particular class of people as potential customers of the relevant product does not justify the conclusion that a significant number of persons in that class must be shown to be aware of the reputation before a claim under s 52 is made out. The question which must be answered can properly be framed as being whether a not insignificant number of persons in the Australian community, in fact or by inference, have been misled or are likely to be misled. (emphasis supplied)

Finkelstein J agreed in the result, but disagreed about the need for a reputation amongst more than an insignificant number of persons.  While his Honour accepted that passing off required the establishment of a reputation amongst a significant or substantial number of the Australian public, there was no warrant to import that requirement into an action for contravention of the Trade Practices Act.

Siopis J, as noted, agreed with Tamberlin J indicating also (?) that the earlier decisions requiring a not insignificant number were not “plainly wrong”.

The significance of the High Court’s reference in [103] of Campomar v Nike to isolating a representative of the class as the hypothetical individual to test “representations to the public”, therefore, bearing in mind the references in [102] to “ordinary” or “reasonable” members of that class, remains to be tested in some future High Court case.

As the trial judge did not explicitly find that Hansen did in fact have a reputation amongst Australian extreme sports enthusiasts, matter was remitted to him for further hearing.

Importantly for the future, Finkelstein J accepted that indirect marketing activities could be sufficient to establish the foundation for a s 52 claim:

63 There are a plethora of examples of indirect advertising and it is a key topic of discussion in advertising literature. Indirect advertising of the kind with which everyone is familiar is the sponsorship of sports. Many people in many countries place great value upon entertainment, competition and accomplishment, all of which are seen in the sporting arena. Brand names and logos appear around sporting arenas, on the clothing worn by sportsmen and women and on the equipment sportsmen and women use. This form of advertising is seen by many thousands of fans who attend sporting events and, in the case of popular sports, by hundreds of thousands of people if the event is broadcast on television. There are numerous studies that show that this type of indirect advertisement is far more effective at eliciting a consumer recall response than a direct television commercial.

64 In my opinion the judge was entitled to infer that the indirect brand advertising employed by Hansen (and, for that matter, Bickfords) 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.

Hansen Beverage Company v Bickfords (Australia) Pty Ltd [2008] FCAFC 181

How much reputation is enough? Read More »

Trade mark dilution or well known trade marks

Leave a Comment / Trade marks / / / , , , , ,

The European Court of Justice has handed down an important ruling clarifying aspects of trade mark dilution in the EU: Intel v CPM:

IPkat’s comments here.

Links to some other commentary here and the “Rapid Response” seminar power point slides via here.

Art.4(4) of the Trade Marks Directive provides:

4.      Any Member State may furthermore provide that a trade mark shall not be registered or, if registered, shall be liable to be declared invalid where, and to the extent that:

(a)      the trade mark is identical with, or similar to, an earlier national trade mark within the meaning of paragraph 2 and is to be, or has been, registered for goods or services which are not similar to those for which the earlier trade mark is registered, where the earlier trade mark has a reputation in the Member State concerned and where the use of the later trade mark without due cause would take unfair advantage of, or be detrimental to, the distinctive character or the repute of the earlier trade mark;

which is similar to our very own s 120(3), so there might be some scope for understanding how s 120(3) could work?

Meanwhile, IP Dragon draws our attention to issues relating to protecting well-known trade marks in China here.

Trade mark dilution or well known trade marks Read More »

Sex, videotapes and damages

Leave a Comment / Confidential Information / / / , ,

The “IP issue” arose amid a number of claims arising from the breakdown of a defacto relationship.

Ms Giller came from Russia in 1990 and shortly after commenced living with Mr Procopets. Together, they had twins, but the relationship was very rocky to say the least.  Neave JA explained the circumstances giving rise to this part of Ms Giller’s claim:

358 … Ms Giller obtained an interim intervention order against Mr Procopets on 12 November 1996. As is often the case where a relationship involves violence,[336] Ms Giller continued to see Mr Procopets after the interim intervention order was granted. Ms Giller’s claim for damages for breach of confidence, breach of privacy and intentionally causing mental harm arose out of the events which followed the granting of this intervention order. The relevant factual findings made by his Honour are summarised below.[337]

359 The couple had intercourse on 19 November 1996 and on a number of other occasions between then and 1 December 1996. Mr Procopets filmed their sexual activities on a hidden video camera. Until 25 November, Ms Giller was unaware of the filming. Thereafter she became aware of the filming and acquiesced in it.

360 Shortly after 1 December 1996, relations between Ms Giller and Mr Procopets deteriorated, to the point where Mr Procopets began threatening to show videos of their sexual activities to Ms Giller’s friends and family.

Mr Procopets also rang Ms Giller’s employer and said that he had a video showing her abusing her position to obtain sexual favours. Mr Procopets also showed the videotape to his subsequent girlfriend for the purposes of degrading Ms Giller.

The trial judge found that:

I am satisfied that the plaintiff has established that the relationship was a confidential one, that she did not authorise him to distribute the video or show it, that his unauthorised distribution was a breach of that confidence and she would be entitled to relief for that breach of confidence.

I also find in respect of the threats to show, the distribution and the showing of the tape in December 1996, that the defendant intended to cause the plaintiff mental harm and that in distributing the video the plaintiff was distressed, annoyed and embarrassed.

His Honour explained why the videotapes were subject to an equitable obligation of confidence:

In my view persons indulging in a sexual activity in the privacy of their own home create a confidential relationship during such activity. In my view it is difficult to think of anything more intimate than consensual sexual activities between two parties in the privacy of their home. It involves a relationship of mutual trust and confidence which is to be shared between the persons but is not to be divulged to others without the consent of both parties.

(Salacious) shades of (Prince) Albert v Strange.

His Honour however refused damages in the equitable jurisdiction because Ms Giller did not seek an injunction and, further, equitable damages (my terminology used impermissibly loosely for the monetary remedy available under Lord Cairn’s Act) were not available for mental harm falling short of psychological or psychiatric injury.

The Victorian Court of Appeal unanimously held that damages (or perhaps equitable compensation for the purists amongst you), including aggravated damages, were available. If damages had been available, the trial judge would have awarded $5,000 + $3,000 by way of aggravated compensatory damages.  Neave JA, with whom Maxwell P agreed, awarded $50,000 included $10,000 by way of aggravated damages.  Ashley JA would have awarded $27,500 (including $7,500 by way of aggravated damages).

One might think that the availability of such damages for defamation and copyright infringement (e.g. Milpurrurru v Indofurn) admittedly, respectively, legal and statutory wrongs should mean the Court’s conclusion should not ultimately be controversial.

Nonetheless, while it is clearly very, very carefully considered – running to over 500 paragraphs (dealing with several other claims as well) – Mr Procopets represented himself.  

In addition, as the Court acknowledged, no Australian court has gone this far before.  

The Court also took into account House of Lords and Court of Appeal decisions, recognising that the most directly relevant also involved the application of the European Convention on Human Rights and appear to have assumed the availability of the remedy in these circumstances.  Also, the decision bears on territory in which the learned authors of Meagher, Gummow and Lehane have expressed vigorous views, although perhaps more about whether it is ‘damages’ under Lord Cairn’s Act or equitable compensation in the inherent jurisdiction that is being invoked.

Neave JA explained that, if it ever were the case that the Victorian enactment of Lord Cairn’s Act required an injunction to be sought, that had been conclusively changed by the wording adopted in s 38 of the Supreme Court Act 1986.

As to damages for mental distress and embarrasment, her Honour considered:

422 In Smith Kline & French v Secretary, Department of Community Services and Health, Gummow J said the conferring of equitable jurisdiction on a court:

… brings with it, in a case such as the present, the inherent jurisdiction to grant relief by way of monetary compensation for breach of an equitable obligation, whether of trust or confidence.[407]

423 Equitable remedies such as injunctions are available to prevent publication of confidential material because of its private nature.[408] It is unnecessary in such applications to show that, if unrestrained, the breach of confidence will cause financial loss or psychiatric injury. By parity of reasoning there should be no barrier to the making of an order for equitable compensation to compensate a claimant for the embarrassment or distress she has suffered as the result of a breach of an equitable duty of confidence which has already occurred. As Morland J said in Cornelius v De Taranto:

…[I]t would be a hollow protection of [the right to protection of confidential information] if in a particular case in breach of confidence without consent details of the confider’s private and family life were disclosed by the confidant to others and the only remedy that the law of England allowed was nominal damages. In this case an injunction or order for delivery up of all copies of the medico-legal report against the defendant will be of little use to the claimant. The damage has been done. … In cases of commercial or business breach of confidence the powers of the court are not barren. Such remedies as injunction, delivery-up, account of profits and damages may be available… similarly in the case of personal confidences exploited for profit or peddled to the media. … In the present case in my judgment recovery of damages for mental distress caused by breach of confidence, when no other substantial remedy is available, would not be inimical to considerations of policy but indeed to refuse such recovery would illustrate that something was wrong with the law.[409]

424 I respectfully agree with that view.[410] An inability to order equitable compensation to a claimant who has suffered distress would mean that a claimant whose confidence was breached before an injunction could be obtained would have no effective remedy.

and, if damages were to be assessed under Lord Cairn’s Act:

428 Damages under Lord Cairns’ Act are sui generis, and can be awarded in some circumstances where common law damages are not recoverable.[416] In my view, such damages should be available where the essence of the plaintiff’s case is that he or she has been embarrassed by the exposure of private information, rather than that the defendant has profited from the wrongful use of that information. In Talbot v General Television Corporation Pty Ltd,[417] Young CJ treated damages under Lord Cairns’ Act as compensating the plaintiff for what he or she had lost.[418] It is consistent with that approach to compensate Ms Giller for the mental distress suffered as a result of the defendant’s actions.

Her Honour considered that awarding damages was also consistent with the injunctions by Gleeson CJ, Hayne and Gummow JJ in ABC v Lenah Meats on the need for breach of confidence to develop appropriately to protect privacy interests.

Ashley JA considered that it was unnecessary to consider Ms Giller’s claim to a generalised tort of invasion of privacy because breach of confidence was available and adequate to address the situation.

Giller v Procopets [2008] VSCA 236.

Sex, videotapes and damages Read More »

Patent appeals from the Commissioner

1 Comment / Patents / / / , ,

Merck & Co. had successfully opposed Sherman’s application for a patent.  Sherman appealed to the Federal Court from that rejection.  Merck subsequently withdrew from the proceeding in the Court and the Commissioner was added as a party.  The Commissioner filed an affidavit exhibiting a copy of the delegate’s decision upholding the opposition and the declarations which Merck had relied on in the opposition.

The trial judge ruled these materials were inadmissible.  The Full Court (Heerey, Kenny and Middleton JJ) upheld the Commissioner’s appeal against this exclusion of material. 

When an appeal is brought in the Federal Court from the Commissioner (or the Registrar of Designs or of Trade Marks), FCR O 58 r8 provides that evidence before the Commissioner may, with leave of the Court and saving all just exceptions, be admissible in the Court.

Unlike the usual situation in “appeals” of this kind where the parties to the opposition may be relying on the statutory declarations they had filed in the Office, Merck had withdrawn and so the statutory declarations of its witnesses were hearsay – presumably, the Commissioner did not intend, or was unable, to call them.

The Full Court confirmed that the rules of evidence still apply to the evidence sought to be “uplifted” so that, if there are objections such as that the evidence is hearsay, evidence which was before the Commissioner may be excluded before the Court.  However, the Full Court went on to find that both the decision and the declarations were admissible.

The delegate’s decision itself was relevant on two bases (at [37]):

First, the fact that it was made was a fact on which the jurisdiction of the Court depended.

Secondly (and more substantively), the Commissioner’s decision and the reasons for it were admissible before the Court as a form of expert evidence because (unlike the Court) the Commissioner (and the various Registrars) is credited with having some technical expertise which the Court is entitled to take into account.

As the decision itself was relevant and admissible, the Full Court went on to hold that so too were the materials on which it was based.

The weight actually to be accorded to the Commissioner’s decision ultimately would depend on what other evidence was adduced before the Court.

Depending on the extent to which the evidence before the Commissioner and the Court overlaps, the decision-maker’s opinion on these matters carries some weight in the Court’s assessment. Viewed in this way, the decision of the delegate is plainly not inadmissible on the ground that it is irrelevant. 

The Full Court noted that, because the declaratory evidence was admissible on the grounds that it was relevant to an understanding of the Commissioner’s decision, it was admissible for all purposes.  Further, however, the Full Court agreed with Lindgren J’s analysis in Alphapharm v Lundbeck (at [762 – 770]) of why articles cited by an expert were admissible even though hearsay.  

The Court did not address Heerey J’s earlier decision in Cadbury v Darrell Lea (No. 3) in which market survey reports were excluded as ‘double’ hearsay.  It would seem that the difference is that in Sherman and Lundbeck the materials were adopted or referred to by the expert as the basis for the expert opinion.

Commissioner of Patents v Sherman [2008] FCAFC 182.

Patent appeals from the Commissioner Read More »

Online Reputation

Leave a Comment / Trade marks / / / , ,

“The Dumb Little Man” has an overview of 6 ways to monitor what is being said about your client, or your client’s brands, in the virtual world here.

Online Reputation Read More »

Penalties and additional damages for trade mark infringement

Leave a Comment / Trade marks / / / , ,

IP Australia has issued an options paper reviewing the criminal penalties and whether or not additional damages should be available for trade mark infringement in Australia.

Some of the considerations for reforming the criminal penalties under the Trade Marks Act relate to the wide ranging reform of the criminal penalties structure in the Copyright Act effected by the amendments in 2006 and a perception that Australia’s penalties may be out of line with other countries’ approaches.  (No mention of the behind the scenes ACTA negotiations is made).  A key issue emerging from the paper, however, is that IP Australia is seeking to quantify the extent of counterfeiting activity in Australia – the paper suggests that the empirical evidence available to IP Australia does not seem to support the anecdotal claims.

Unlike copyright, patents and registered designs, additional damages are not available for infringement of registered trade marks.  The options paper questions whether this should still be the case.

Apart from the anomalous treatment of trade marks compared to the other main statutory rights, I would have thought the US Free Trade Agreement (art. 17.11.7) leaves room for debate only about whether there are additional damages or statutory damages.  May be there’s a transitional provision or side agreement that someone can point me to which makes this optional?

Written comments are required by 27 February 2009.

The options paper is here (pdf).  ACIP’s earlier report here (pdf).

Penalties and additional damages for trade mark infringement Read More »

A scientific approach to typosquatting

Leave a Comment / Domain names, Trade marks / / / , ,

Typosquatting can occur when someone registers a misspelling of your domain name in the hope that your customers will mistype the domain name in their web browser and land on that someone’s website. (Apparently, a significant portion of people who do so then click on a link on the typosquatted website, thus generating pay per click advertising revenues for the site ‘squatter’.)

Apart from the potential diversion of custom, FairWinds Partners also makes the point that typosquatting can harm the reputation of the brand.  As an example they speculate about the impact on Disney’s customers if they landed on a typosquatted page promoting pornography.

Recognising that it is not feasible to register every possible variation of your domain name to defend against such practices, FairWinds Partners have published a attempt to analyse typosquatting scientifically.

The study looked at 3,000 top level domains that had more than 2,000,000 hits per month.  From this universe, they found that most typosquatting appears to fall into 1 of 10 categories.  They also concluded that the typosquatters were targetting domain names fairly scientifically.

Apart from typosquatting, FairWinds Partners notes that consideration should be given to registering the domain name in other tlds –  e.g. consider .biz and .net, not just .com; also consider country specific domains. This, however, is already problematic – there are already 21 gTLDS, not to mention of the country specific ccTLDS such as .com.au and .co.uk etc.  And its going to get much worse with ICANN, in the interests of competition and diversity no less, planning to allow a potentially unlimited number of tlds.

Download the paper here (pdf).

Other research suggests that about 10% of internet searches don’t land on their expected destination (Lid dip Marty).

A scientific approach to typosquatting Read More »

Vale Sir Hugh Laddie

Leave a Comment / Because I felt like it / /

There are many tributes throughout the blawgosphere marking the passing of Sir Hugh Laddie.

One of the best places to get a sense of Sir Hugh’s place in the IP world is the thoughtful overview provided by Bill Patry.

At a more mundane level, should you find yourself involved with an ‘Anton Piller’ bear in mind that Sir Hugh was there before you.

Vale Sir Hugh Laddie Read More »

Gene Patenting Inquiry

Leave a Comment / Patents / / / , , ,

The Commonwealth Senate has launched an inquiry into the patenting of genes.

According to the terms of reference:

The impact of the granting of patents in Australia over human and microbial genes and non-coding sequences, proteins, and their derivatives, including those materials in an isolated form, with particular reference to:

(a)     the impact which the granting of patent monopolies over such materials has had, is having, and may have had on:

(i)     the provision and costs of healthcare,

(ii)    the provision of training and accreditation for healthcare professionals,

(iii)   the progress in medical research, and

(iv)   the health and wellbeing of the Australian people;

(b)     identifying measures that would ameliorate any adverse impacts arising from the granting of patents over such materials, including whether the Patents Act 1990 should be amended, in light of the any matters identified by the inquiry; and

(c)     whether the Patents Act 1990 should be amended so as to expressly prohibit the grant of patent monopolies over such materials.

The terms of reference do not say so but, presumably, the inquiry has been triggered by the recent controversy when Genetic Technologies announced it was going to commence enforcing its exclusive licence to patents relating to breast cancer detection.  It would seem, however, that the company rescinded its threat.

The Senate Community Affairs committee is due to report by the last sitting day of 2009.  Written submissions have been sought, however, by 19 March 2009.

Anyone else looking forward to learned consideration of TRIPS art. 27, 30 and 31 after all that hard work that’s been done by the ALRC.  See now ACIP’s review of patentable subject matter (pdf) which includes some notes on the AUSFTA obligations.  Then, of course, there is always Patents Act s 163.

Gene Patenting Inquiry Read More »