Archive for December, 2011

Merry Christmas!

Friday, December 23rd, 2011

Thank you for your time and comments and encouragement over the past year.

I hope you have continued to find something of interest.

IPwars is disappearing off into the summer sun like all be-gowned, if not be-wigged, creatures and should be returning in late January.

Meanwhile, I wish you all a very Merry Christmas and all the best for the New Year!

similar to or capable of being confused with

Friday, December 23rd, 2011

Idameneo (No. 789) won its appeal from Symbion. The competing trade marks can be viewed here.

The Full Court agreed with the trial judge that the contractual restraint against using:

any Mark similar to or capable of being confused with any of the Trade Marks or which contain the words SYMBION

imposed a different standard to the trade mark infringement test of substantial identity or deceptive similarity. However, the Full Court did not treat it as a single over-arching test.

For the purposes of the outcome, however, the crucial point was that both companies were using their respective marks in different specialist markets. Hence it was important to consider how persons in the relevant specialist market would react to Idameneo’s sign:

  1. Here, although the Symbion registration does extend to diagnostic and imaging services, there was no evidence that the goods or services of Symbion and Idameneo would find markets in substantially common areas or among the same classes of people. To the contrary, the evidence established that each of the parties currently operated in distinct and different specialised markets. And, as we have found above, the Symbion marks, on the one hand, and the Idameneo mark, on the other, are not the same and do not closely resemble one another. Thus, although the Symbion marks had been used in the same sector as the Idameneo mark prior to the demerger in 2008 and for a time afterwards, they were always distinct and did not so closely resemble one another that there was a real risk of anyone being caused to wonder whether the respective marks identified or were associated with services that come from the same source.
  2. The parties must have intended in cl 5.5(b) that Idameneo not “use… any Mark … capable of being confused with any of” the Symbion registration or Symbion device mark as a restraint that protected Symbion’s legitimate commercial interests in those two marks themselves and the reputation and goodwill associated with them. While the Symbion device mark had been used to brand the Healthcare imaging business before the merger in 2008, by April 2010 only the Idameneo mark was used by Idameneo for all its imaging businesses, including Healthcare. Having regard to the lack of resemblance between the marks and the lack of any evidence of any possibility of confusion in the specialised markets, Symbion’s claim based on a breach of cl 5.5(b) must fail.

(emphasis supplied)

As the Court accepted that the contractual formulation must have a broader scope than the statutory test (albeit to no practical effect in this case), which formulation will you use when you are drafting a contractual restraint delimiting competing users’ respective fields of use?

Idameneo (No 789) Ltd v Symbion Pharmacy Services Pty Ltd [2011] FCAFC 164 (Rares, Gilmour and Dodds-Streeton)

ISP gets DMCA win in USA

Thursday, December 22nd, 2011

The Ninth Circuit has affirmed the trial court’s summary dismissal of UMG copyright claims against Veoh on the basis of §512(c) – the ‘hosting’ safe harbour. UMG argued 3 reasons why §512(c) did not apply:

First, UMG argues that the alleged infringingactivities do not fall within the plain meaning of “infringe-ment of copyright by reason of the storage [of material] at thedirection of a user,” a threshold requirement under§ 512(c)(1). Second, UMG argues that genuine issues of factremain about whether Veoh had actual knowledge of infringe-ment, or was “aware of facts or circumstances from whichinfringing activity [wa]s apparent” under § 512(c)(1)(A).Finally, UMG argues that it presented sufficient evidence thatVeoh “receive[d] a financial benefit directly attributable to. . . infringing activity” that it had the right and ability to control under § 512(c)(1)(B). We disagree on each count, andaccordingly we affirm the district court.

Each of these requirements has a counterpart in our US Free Trade Agreement ‘inspired’ – see s 116AH items 1 and 4 and therefore should repay consideration.

On the knowledge / awareness point:

At [11], Judge Fisher noted that UMG had not notified Veoh of any infringing material under the DMCA before commencing proceedings. After noting at [12] that Congress placed the burden of policing infringements on copyright holders, Judge Fisher continued at [13]:

[13] UMG asks us to change course with regard to§ 512(c)(1)(A) by adopting a broad conception of the knowl-edge requirement. We see no principled basis for doing so.We therefore hold that merely hosting a category of copy-rightable content, such as music videos, with the generalknowledge that one’s services could be used to share infring-ing material, is insufficient to meet the actual knowledgerequirement under § 512(c)(1)(A)(i).
Then at [14], Judge Fisher rejected UMG’s arguments that Veoh should be held to have sufficient awareness of infringing activity:
…. For the same reasons, we hold that Veoh’s general knowledge that it hosted copyright-able material and that its services could be used for infringe-ment is insufficient to constitute a red flag.
In Section 2, Judge Fisher dismissed UMG’s other evidence of awareness. One point of interest was that an email from Michael Eisner CEO of Disney would have been sufficient if from a third party, but was rejected since it was from a copyright holder and did not follow the DMCA process.

The 1709 blog has a good summary and links here.

As Techdirt points out, however, the costs of the litigation drove Veoh out of business.

Next up, presumably, the Ninth Circuit’s decision in the appeal from Viacom v Youtube.

Although, as noted above, the decision has potential ramifications for the corresponding Australian provision, I am not convinced it has much to say on Roadshow v iiNet (which concerned Category A activity, not Category C anyway) where the AFACT Notices seemed to provide specific notice (once properly explained).

UMG Recording Inc v Shelter Capital Partners LLC., Case: 09-55902, 9th Cir. December 20, 2011

ISPs and “3” strikes in Australia

Friday, December 16th, 2011

On the eve of High Court hearings in Roadshow v iiNet (transcripts here, here and here), the 5 major ISPs in Australia (Telstra Bigpond, Optus, iiNet, iPrimus and Internode) released a proposal (pdf) for dealing with (illegal) file sharers and other online copyright infringers.

Under s 116AG of the Copyright Act, the remedies against an ISP (which is a carriage service provider) for infringing materials transmitted over its network may be restricted to an injunction requiring it to terminate a subscriber’s account or to take reasonable steps to disable access to an online location outside Australia provided the ISP complies with the requirements in s 116AH. Similar limitations on the remedies available are imposed in respect of ISPs in the other categories. One of the conditions in s 116AH is that the ISP had adopted and reasonably implemented a policy for termination of the accounts of repeat infringers in appropriate circumstances.

The proposal can be seen as intended to address that requirement.

The proposal refers to the large amounts of lost revenues often claimed by the copyright owners from illegal activity online. It also draws attention to evidence that large proportions of infringers do not engage in infringing conduct after receiving a warning that their activity is infringing.

Accordingly, the proposal puts forward a scheme in which:

  1. a copyright owner may send a notice alleging infringing activity to an ISP which will then send its subscriber, if it can match a subscriber to the information provided by the rights holder, an education notice;
    1. a 21 day “grace period” will follow to allow the subscriber to seek legal advice or query the notice with a proposed Independent Panel or act on the notice;
  2. after the expiry of the 21 day “grace period”, the rights holder may send a further copyright infringement notice to the ISP if the subscriber is still engaging in the conduct or some other infringing conduct relevant to the rights holder and the ISP will send the subscriber, if it can match a subscriber to the information provided by the rights holder, a Warning Notice;
    1. a 21 day “grace period” would apply for each Warning Notice as well
  3. if, in any given 12 month period, the ISP has issued to the same subscriber an Education Notice and [three] Warning Notices and, presumably, receives another allegation against the subscriber, the ISP will send the subscriber a Discovery Notice and, if the conduct is still continuing or no objection has been lodged with the Independent Panel after 21 days, the ISP will inform the rights holder that the subscriber has not addressed matters after receiving the [third] Warning Notice and the rights holder may apply for preliminary discovery or a subpoena to obtain the subscriber’s details and take direct action against the subscriber for copyright infringement.

The [three] in square brackets is how it is presented in the proposal, presumably to indicate this is an aspect they are willing to negotiate.

A feature of the proposal is its proposal for the institution of a Copyright Industry Panel to prepare and disseminate educational material and operate an “appeals” process whereby subscribers can dispute allegations of infringement.

The proposal points out that setting up the systems to implement this (or presumably any) system to deal with the problem will be expensive and, having regard to the enormous extra revenue copyright owners claim they stand to gain, they should bear some part of that cost.

The proposal is planned to operate for 18 months to evaluate how it works.

It remains to be seen how acceptable all this is to the copyright owners (which in turn may well depend on who “wins” the Roadshow appeal). The Australian Content Industry Group, apparently representing music and film copyright owners such as APRA-AMCOS, reportedly rejected it out of hand.

Except perhaps in the case of ISPs hosting third party websites with infringing material or providing “location information” tools to the sites of third parties who have infringing content and, maybe, some caching activities, it is not immediately clear how the rights owner will identify which subscriber it wants to get an Education or Warning Notice sent to.

Also, it is not clear on my first reading whether the Education Notice and the 3 Warning Notices in any given 12 month period must be sent by the same copyright owner in respect of the same infringement (e.g. the one video on a hosted website) or, presumably, may be generated by different rights holders in respect of the same or different activity?

Communications Alliance Ltd A Scheme To Address Online Copyright Infringement (An Australian Internet Service Provider (ISP) Proposal) (pdf)

Apple and Samsung in the High Court 3

Thursday, December 15th, 2011

As is well known by now, the High Court dismissed Apple’s application for special leave to appeal from the Full Federal Court’s dissolution of the interlocutory injunction against the Samsung Galaxy Tab 10.1. This means that Samsung can legitimately offer the Galaxy Tab 10.1 for sale in Australia pending trial and subject to an undertaking to keep full accounts.

The transcript of the High Court hearing (French CJ, Gummow and Bell JJ) is now up. In refusing special leave, French CJ said on behalf of the Court:

The organising principles upon which applications for interlocutory injunctions are determined are set out in O’Neill and, as is emphasised in those passages, the governing consideration is that the requisite strength of the probability of ultimate success depends upon the nature of the rights asserted by the plaintiff and the practical consequences likely to flow from the grant of interlocutory relief, the reference to “practical consequences” including the considerations which are present where the grant or refusal of an interlocutory injunction, in effect, disposes of the action in favour of the successful party on that application.

This appears to have been a case where the decision on the interlocutory application effectively would determine the outcome of the dispute, hence, as the Full Court emphasised, the requirement for a reasoned examination of the strength of Apple’s case. ….

That is, as both parties accepted the interlocutory injunction was effectively final relief in that the Galaxy Tab 10.1 would be well and truly superseded by the final resolution of the case (including any appeals), Apple needed to demonstrate a strong case for infringement.

While the High Court panel accepted the judge hearing an interlocutory injunction might not always be expected to forecast the outcome of the case at the interlocutory stage, the practical consequences in this case meant that was necessary. In undertaking that exercise, the Full Federal Court had made no error of principle (and, unsurprisingly, the High Court was certainly not going to engage, at this stage, in claim construction and reviewing the evidence).

Apple Inc & Anor v Samsung Electronics Co. Limited & Anor [2011] HCATrans 341

ISPs and filtering

Tuesday, December 6th, 2011

While we wait with bated breath for the High Court’s deliberations on Roadshow v iiNet (transcript of hearing here, here and here), it is worth noting that the CJEU (formerly the ECJ) has struck down an injunction against an ISP which required the ISP to monitor all its users’ traffic and filter (block) copyright infringing material.

SABAM, the Belgian authors’ collecting society (counterpart to APRA) obtained an interlocutory injunction against Scarlet, an ISP. SABAM contended that some of Scarlet’s customers were using its services to engage in peer-to-peer file sharing of copyright materials without authorisation. It obtained from the Belgian courts an order that Scarlet implement a system of filtering to ensure that its users were blocked or otherwise made it impossible for them to send or receive in any way, files containing a musical work using peer-to-peer software without the permission of the copyright owners.

It was common ground between the parties that this would require Scarlet to introduce a system for filtering:

–        all electronic communications passing via its services, in particular those involving the use of peer-to-peer software;

–        which applies indiscriminately to all its customers;

–        as a preventive measure;

–        exclusively at its expense; and

–        for an unlimited period,

which is capable of identifying on that provider’s network the movement of electronic files containing a musical, cinematographic or audio-visual work in respect of which the applicant claims to hold intellectual property rights, with a view to blocking the transfer of files the sharing of which infringes copyrigh

It was also common ground between the parties that such a system would require :

–        first, that the ISP (Scarlet) identify, within all of the electronic communications of all its customers, the files relating to peer-to-peer traffic;

–        secondly, that it identify, within that traffic, the files containing works in respect of which holders of intellectual-property rights claim to hold rights;

–        thirdly, that it determine which of those files are being shared unlawfully; and

–        fourthly, that it block file sharing that it considers to be unlawful.

That is, the ISP would have to monitor all the traffic across its network.

While the CJEU recognised that IP, in this case copyright, was a fundamental right. It also recognised that its protection needed to be balanced against the protection of other fundamental interests. It was necessary to strike a fair balance between the rights of copyright owners, ISPs and their customers. This injunction did not do that and so was incompatible with Community law (we would say “invalid”):

47      In the present case, the injunction requiring the installation of the contested filtering system involves monitoring all the electronic communications made through the network of the ISP concerned in the interests of those rightholders. Moreover, that monitoring has no limitation in time, is directed at all future infringements and is intended to protect not only existing works, but also future works that have not yet been created at the time when the system is introduced.

48      Accordingly, such an injunction would result in a serious infringement of the freedom of the ISP concerned to conduct its business since it would require that ISP to install a complicated, costly, permanent computer system at its own expense, which would also be contrary to the conditions laid down in Article 3(1) of Directive 2004/48, which requires that measures to ensure the respect of intellectual-property rights should not be unnecessarily complicated or costly.

49      In those circumstances, it must be held that the injunction to install the contested filtering system is to be regarded as not respecting the requirement that a fair balance be struck between, on the one hand, the protection of the intellectual-property right enjoyed by copyright holders, and, on the other hand, that of the freedom to conduct business enjoyed by operators such as ISPs.

50      Moreover, the effects of that injunction would not be limited to the ISP concerned, as the contested filtering system may also infringe the fundamental rights of that ISP’s customers, namely their right to protection of their personal data and their freedom to receive or impart information, which are rights safeguarded by Articles 8 and 11 of the Charter respectively.

Thus, the filtering injunction did not strike a fair balance between the protection of IP and the rights of ISPs and their customers.

Case C-70/10 Scarlet Extended SA v SABAM, 24 November 2011.

IPKat has the text of the CJEU’s Summary and as they point out, the CJEU’s ruling has some interesting implications for the filtering injunction ordered by Arnold J in Newzbin 2.

Of course, in Australia, we do not labour under a Charter of Rights. Section 116AH(2) of the Copyright Act 1968 does, however, place some limits on a “carriage service provider’s” obligations to monitor:

(2)  Nothing in the conditions is to be taken to require a carriage service provider to monitor its service or to seek facts to indicate infringing activity except to the extent required by a standard technical measure mentioned in condition 2 in table item 1 in the table in subsection (1),

which is a rather more anodyne protection. Also, under the Telecommunications Act, carriers and carriage service providers have prohibitions on disclosing information related to communications (which is not the same thing as a prohibition on monitoring), but there are important exceptions including disclosures authorised by or under law. Cf  e.g. ss 276 and 280.

 

Apple v Samsung in the High Court 2

Monday, December 5th, 2011

Apple’s application for special leave to appeal from the Full Federal Court’s decision to discharge the interlocutory injunction granted by Bennett J will be heard on Friday, 9 December 2011 in Sydney.

In granting the stay on the Full Federal Court’s orders, Heydon J pointed out that the fact that 2 experienced patent judges had reached opposition conclusions, in circumstances which his Honour characterised as the appeal court not disturbing Bennett J’s findings of fact, indicated Apple’s case was not without some prospects of success.

Perhaps more interesting at the level of tea leaf reading, Heydon J expressed his personal concern that no expedited final hearing was ordered in this case:

Secondly, to my mind at least, it is deeply troubling that there was no expedited final hearing in this case. Precisely why there was not, on my perhaps limited acquaintance with the materials, is a somewhat murky question. But why it is that no expedited final hearing took place and how the courts below dealt with the fact that no expedited final hearing took place is a matter of some public interest in the sense in which Ms Howard was using that expression and is a matter which may be thought worthy of close investigation on the special leave hearing.

The Full Federal Court appeared to discount Samsung’s resistance to an expedited hearing.

Apple Inc v Samsung [2011] HCATrans 326

Apple and Samsung in the High Court

Friday, December 2nd, 2011

The High Court has extended the stay on the Full Federal Court’s dissolution of the injunction against Samsung’s Galaxy Tab 10.1 for another 7 days.