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Mainly intellectual property (IP) issues Down Under

Safe harbours to be Extended

The Commonwealth Government introduced the Copyright Amendment (Service Providers) Bill 2017 into Parliament today.

As its name suggests the purpose of the Bill is to extend the class of persons who can claim the benefits of the safe harbour provisions in the Copyright Act 1968 provided in sections 116AA to 116AJ.

The way the amendments will work is essentially to remove the references to “carriage service provider” and replace them with a new reference to “service provider”.

For this purpose, “service provider” will be defined to mean:

116ABA Definition of service provider

(1) Each of the following is a service provider:

(a) a carriage service provider;

(b) an organisation assisting persons with a disability;

(c) the body administering a library, if:

  (i) all or part of the collection comprising the library is accessible to members of the public directly or through interlibrary loans; or

  (ii) the principal purpose of the library is to provide library services for members of a Parliament;

(d) the body administering an archives;

(e) the body administering a key cultural institution;

(f) the body administering an educational institution.

However:

(2) If a service provider is not:

(a) a carriage service provider; or

(b) an organisation assisting persons with a disability; or

(c) the body administering an educational institution, being an educational institution that is a body corporate;

this Division only applies to activities that the service provider carries out because of its relationship to the relevant library, archives, key cultural institution or educational institution mentioned in subsection (1).f you are not one of those people, you will be able to claim the benefit of the safe harbours

If your name is Google or Facebook, or you are some other provider of services inflicting user generated content on the world, you won’t qualify.

The new definition of “service provider” may be compared with the definition enshrined in the Australia – US Free Trade Agreement in Article 17.11.29(xii) (scroll down):

(xii) For the purposes of the function referred to in clause (i)(A), service provider means a provider of transmission, routing, or connections for digital online communications without modification of their content between or among points specified by the user of material of the user’s choosing,[1] and for the purposes of the functions referred to in clause (i)(B) through (D),[2] service provider means a provider or operator of facilities for online services or network access.

This is because, the Government has pointed out, copyright industries are highly valuable for Australia. Accordingly, the consultation process will continue:

In so doing, the Government will be mindful of the need to ensure the rights of creators are properly protected. Australia’s copyright framework ensures that creators can receive a fair return for their work. Australia’s copyright industries make a significant contribution to our economic and cultural life, including collectively generating approximately $122.8 billion in economic activity, $6.5 billion in exports and employing more than 1 million Australians.

Bill (pdf)

EM (pdf)

Minister’s Press Release

Other links


  1. That is a 116ac Category A type activity.  ?
  2. That is a Category B, Category C or Category D type activity.  ?

Copyright And Computer Software

McDougall J, in the New South Wales Supreme Court, has dismissed mployeeIFY’s claims that 3DSafety infringed copyright in the “look and feel” or structure of EIFY’s website. If you are preparing terms and conditions for website use, you should read that part of his Honour’s decision too.

Amongst other things, EIFY provides web-based induction services for construction sites. Apparently, before a new employee or contractor can enter a building site and start work, he or she must undergo an induction process and pass certain tests. Historically, these induction processes were conducted “face to face” when the employee or contractor arrived on site for the first time. EIFY developed a web-based service for people to work through before they attended on site. The service included online tests to ensure that the worker had assimilated the required knowledge.

In 2011, EIFY and 3DSafety entered into a joint venture to integrate their respective systems. The joint venture vehicle was “Group”. However, the joint venture fell over fairly quickly and apart from some work for existing clients was inactive.

3DSafety subsequently secured contracts to provide web-based induction processes for Thiess and Mirvac. EIFY had evidence that at least two of the principals of 3DSafety had accessed sites prepared by EIFY repeatedly during the design process for the resulting websites. EIFY sued 3DSafety and those principals for breach of confidential information, breach of contract (the terms on which a browser was permitted to access EIFY’s website) and copyright infringement.

The copyright claims

In the end, EIFY claimed copyright in 5 types or categories of works in 8 different versions of its system:

  1. the structure or sequence or organisation of each System;
  2. the layout, format and “look” of the web pages implementing the System;
  3. the source code for the web pages;
  4. the object code for the web pages; and
  5. 34 images reproduced on 3DSafety’s websites for Thiess and Mirvac.

In the result, each claim failed.

Source code and object code

EIFY’s claims failed because there was no attempt in its evidence to compare the source code, or the object code, in the 3DSafety product to any version of EIFY’s product. There was also no evidence that 3DSafety ever had access to the source code or object code for any of the EIFY products.

At [410], McDougall J explained:

The high point of the evidence is an assertion by Professor Braun that “[i]n cases where the screens are very similar, the underlying Object Code in the Video RAM is also very similar”. Even assuming the requisite degree of similarity (and Professor Braun’s evidence, to the extent it was admitted, does not prove this), it does not follow that the object code underlying the screens in the 3D Safety online induction system (or any other functional part of that system) results from any act that could constitute an infringement of any copyright that subsists in the object code underlying the screens in any versions of the e-Induct System.

Seventeen years into the 21st century, if you want to prove infringement of the copyright in a computer program, you really do need to compare the code said to infringe to the code you are claiming copyright in.[1]

The structure, sequence or organisation of the EIFY System

McDougall J understood this to be a claim to copyright in the EIFY System as identified in paragraph 33AB of EIFY’s pleading which defined that structure in the following terms:

33AB The plaintiff’s expression of the Concept is by means of the following structure (or sequence or organisation):

(a) the preparation of a data base structure to cater to the requirements of the system;

(b) the creation of a system of modules and elements written in computer code to produce object code which creates the user interface in the appropriate sequence for the logical process;

(c) the inclusion in the user interface of digitized images to either provide information to the user for the particular stage of the induction process or to illustrate or enhance the induction procedure;

(d) a user registration process by the user entering personal information into a web interface backended by a data base to store the information, to link the employee to an employer;

(e) the acquisition of an access code (token) by the user or their employer;

(f) the collection of data and other information particular to the user as required for access to the workplace site to which the induction refers;

(g) the validation of the user’s ability to undertake the induction by verifying the existence of a pre-existing access code (token) and verification of the user’s identity;

(h) the commencement of the induction process once the token or access code is verified;

(i) a two factor authentication to confirm the user’s identity, via text message to a mobile phone or mobile device;

(j) the inclusion of user selectable actions to permit the user to move through the induction process and voiceover with relevant controls;

(k) the inclusion of safeguards at each stage of the induction process to ensure the user has correctly assessed the information, risks and requirements of each stage of the induction process, and to prohibit the user moving forward from one stage to the next without successfully completing a prior stage; and

(l) a final result screen to illustrate the final result of the induction procedure undertaken by the user, and including an option such as printing out a certificate or induction card

As with novels, plays and films, McDougall J accepted that “textual” infringement was not the only way copyright could be infringed. At [412], his Honour cited Arnold J’s decision in SAS Institute Inc v World Programming Ltd [2010] EWHC 1829 (Ch) to that effect:

…. I accept that copyright protection is not limited to the text of the source code of the program, but extends to protecting the design of the program, that is, what has been referred to in some cases as its “structure, sequence and organisation”. …. But there is a distinction between protecting the design of the program and protecting its functionality. It is perfectly possible to create a computer program which replicates the functionality of an existing program, yet whose design is quite different.

McDougall J also accepted that the application of the “structure, sequence, organisation” approach poses particular problems in the context of computer programs because it was perfectly possible to emulate the functionality of a computer program, even its ease of use, without copying (or even access) to the underlying code.[2] His Honour accepted Jacob LJ’s summation in Nova Productions Ltd v Mazooma Games Ltd [2007] EWCA Civ 219 at [52]:

Pumfrey J in Navitaire was quite right to say that merely making a program which will emulate another but which in no way involves copying the program code or any of the program’s graphics is legitimate.

In the absence of analysis of the code, McDougall J concluded that EIFY’s case confused the functionality of the respective programs with the protectable elements of the design of EIFY’s software. At [423], McDougall J said:

Returning to the distinction that Arnold J drew in SAS Institute at [232][110] , 3D Safety’s online induction programs for Thiess and Mirvac may well have replicated the functionality of EIFY’s existing online induction program. It does not follow that 3D Safety has thereby copied the design of EIFY’s program, and such other evidence as there is does not prove copying of design as opposed to replication of functionality.

One might add, if one turns to the definition of “computer program” in the Copyright Act 1968:

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

it would seem to follow that one should be comparing the structure, sequence and organisation of the set of statements or instructions constituting the program.

“look and feel”

McDougall J noted there was already Australian authority rejecting protectability of the “look and feel” of a computer program.[3]

EIFY, however, argued that American case law provided for such protection and so StatusCard should not be followed. McDougall J rejected this submission for two reasons.

First, at [428] – [429] McDougall J pointed out that the US Copyright Act defined copyright subject matter differently to the approach taken in the Australian Act. Under the Australian Act, s 31 requires identification of something which fits within the specific category of a “literary work” – the pigeonhole approach. §102 of the US Act, however, defines copyright subject matter inclusively, not exhaustively.

Secondly, McDougall J pointed out at [430] that cases in the US subsequent to Whelan v Jaslow had questioned, or even refused to accept, that copyright extended to the “look and feel” of a program.

Turning to EIFY’s case, McDougall J held at [431] – [432] that the “Structure” of its System as defined was not itself a literary work. Further, its case impermissibly sought to conflate the “structure, sequence or organisation” of the System with those elements of the underlying program. Accordingly, this part of EIFY’s case failed too.

The 34 Images

There doesn’t seem to have been much debate that the 34 images in question were copies of the images EIFY claimed copyright in. The problem was that EIFY did not own copyright in the images.

It turned out that the original images had been created either by Group or by an entity called Clearsite, for Mirvac when Group was operating and had a contract to create a web-based induction service for a Mirvac site. Group of course was not EIFY, being the failed joint venture vehicle.

The evidence showed that employees of Clearsite had created a number of the images in question. Clearsite had been commissioned to create the images by Group, not EIFY, had invoiced Group and had been paid by Group.

Clearsite did execute an assignment of its copyright to EIFY. This did not help for two reasons.

First, at [446] – [448] the terms of the assignment defined the intellectual property assigned as the intellectual property resulting from the provision of consultancy services by Clearsite to EIFY. The images in question, however, had been created in the course of providing consultancy services to Group, not EIFY.

Secondly, the assignment was made on 14 May 2015. The allegedly infringing use of the images took place before that date. The assignment, however, did not include an assignment of the rights to sue for past infringements.

There may be a short post on a couple of points arising from the dispute over the “terms of use” later in the week.

 

EIFY Systems Pty Ltd v 3D Safety Services Pty Ltd [2017] NSWSC 1310 (McDougall J)


    1. There are now more recent cases, but really you can’t go past Ibcos Computers Limited v Barclays Mercantile Highland Finance Limited [1994] FSR 275; 29 IPR 25 for a comprehensive tutorial on proving ownership, copying and substantial part.  ?
  1. At [414 – [420] citing in particular Navitaire Inc v Easyjet Airline Co [2004] EWHC 1725 (Pumfrey J).  ?
  2. Referring to StatusCard Australia Pty Ltd v Rotondo [2009] 1 Qd R 599 at [87].  ?

Losing yourself (again)

The New Zealand High Court has found the NZ National Party’ 2014 advertising campaign theme infringed the copyright in Eminem’s “Losing Yourself”.

you might remember the social media stir when the lawyers managed to appear sober and, er, lawyerly, when they played the two songs in court.

Now, we have the 300+ paragraph ruling.

The Copyright Society’s summary.

Eight Mile Style, LLC v New Zealand National Party [2017] NZHC 2603

ps Probably not,the National Party’s biggest loss this month.

 

AIPPI Sydney 2017 – Day 3: patents, copyright and …

Some more reports from the AIPPI Congress 2017 in Sydney – Day 3:

  1. My post on the panel discussing the issues patenting medical devices (apparatus or apparatus + drug) including significant changes in the EU next year;
  2. Clare Cunliffe reporting on the panel discussing issues arising when an innovator is seeking a final injunction against another innovator (rather than a generic); and
  3. James Elmore’s report on the Business of IP – IP venturing.
  4. Clare also reports on intermediary liability for copyright infringement.
  5. Finally, James reports on the panel on whether not identification of the technical problem solved by the patent is required in the USA, the EPO, China and Japan.

AIPPI Sydney 2 – music and the digital revolution

i was lucky enough to attend a panel on the impact of the digital revolution on the music industry featuring discussants with real world experience.

You can see my report over on the IPKat.

My barristerial colleague, Clare Cunliffe, also has a report on inventor remuneration.

i understand more reports of other sessions are in the pipeline.

AIPPI Sydney

Over the weekend, I shall be attending the annual Congress of AIPPI in Sydney.

Lots of interesting sessions and practitioners from all round the world

If you are attending or in the vicinity, say “hello”.

Government response to Productivity Commission IP report

The Government has published its response to the Productivity Commission’s Intellectual Property Arrangements – Final Report.

Further comment will have to await. In the meantime, the media release notes:

A key priority will be to align Australian inventive step law with international best practice to ensure that the necessary protections are available to deserving inventions. The Government has also accepted the Productivity Commission’s recommendation to phase out the Innovation Patent System.

and, in not accepting the proposal to adopt a general “fair use” defence to copyright:

It is important copyright reform is considered in a holistic context rather than focused on individual issues. We will continue to work closely with stakeholders over the next 12 months to develop effective options for copyright reform.

The Australia Copyright Council is very pleased.

There will also be a new IP Policy Group (within government) to, er, monitor IP policy!

According to the Government’s Media Release, the Government is still considering the merits of a number of other proposals and “will work on these further”.

Australian Government Response to the Productivity Commission Inquiry into Intellectual Property Arrangements (pdf)

Media release 25 August 2017

More third party website blocking injunctions

Nicholas J has granted another round of injunctions ordering ISPs to block access to offshore copyright infringing sites.

Having established the ground rules in the earlier applications (here and here), the ISPs didn’t turn up; essentially just filing submitting appearances and agreeing to be bound by the orders.

According to this News report, once these orders are implemented a total of “65 piracy sites and 340 domains” will be blocked in Australia. That is claimed to be “95 per cent of the criminal trade blocked”.

Apparently, the film companies:

plan, later this year, to sue any individual that continues to download pirated content.

Roadshow Films Pty Ltd v Telstra Corporation Limited [2017] FCA 965

Copyright amendments passed

The Copyright Amendments (Disability Access and Other Measures) Bill 2017 has now been passed by both Houses of Parliament.

The bulk of the amendments introduce reforms to improve access to copyright works by people with a disability to give effect to Australia’s obligations under the Marrakesh Treaty – and simplify the statutory licences for collecting societies and educational institutions.

Schedule 2 amends the term of copyright in unpublished works so that they will not remain in copyright indefinitely. The precise term will depend on when the work is first made public, what type of work it is and whether the identity of the author is generally known.

In broad terms, the term will be reduced to 70 years after the author’s death if the work is never made public. If the work was first made public before 1 January 2019, the term can still run for 70 years after the work is finally made public. If the work is first made public on or after 1 January 2019, anonymous works can still get 70 years after publication if they are first published within 50 years of being made.

Minister’s press release

Read the bill as passed and the explanatory memorandum via Parliament’s bills page.

Lid dip: Australian Copyright Council’s update service.

The Federal Circuit Court can grant Mareva injunctions

The Federal Circuit Court can issue mareva injunctions[1] under s 14 and s 15 of the Federal Circuit Court Act 1999.

Mr Vartzokas is an architect. Through his company he agreed to provide architectural services in connection with the development of a 5 storey apartment block in Prospect Rd Adelaide to the developer, Nazero Contructions Pty Ltd.

He provided the services and sent in his bill for $48,100.

Mr Younan seems to have been the principal of Nazero Constructions and was the person with whom Mr Vartzokas dealt.

With some difficulty, Mr Vartzokas managed to extract payments totalling $25,000 from Mr Younan. When Mr Vartzokas sent in his final bill for the remaining $23,100 with the final drawings, the drawings were endorsed with the statement:[2]

These drawings are the copyright property of the architect and are not to be reproduced or copied without prior written license of the architect.

Needless to say (this is a court case afterall), Mr Vartzokas was not paid his outstanding $23,100.

Instead, he was contacted by a Mr Chen on behalf of Yi Hong Pty Ltd, which was about to purchase the Prospect Rd property and wanted to engage Mr Vartzokas to provide further architectural services in relation to it.

Mr Chen provided Mr Vartzokas with copies of the working drawings for the property which Mr Chen had obtained from Mr Younan in connection with the proposed purchase and wanted Mr Vartzokas to work on.

Mr Vartzokas recognised the drawings as being the ones he had prepared for Mr Younan and Nacero Constructions. Only the authorship was attributed to “JB Archi-Build”!

Unbeknownst to Mr Vartzokas, around the time Mr Vartzokas was having trouble extracting his initial payments from Mr Younan, Mr Younan caused a new company, Nazero Group SA Pty Ltd to be incorporated. Nazero Constructions sold the Prospect Rd property to Nacero Group for $1,017,500. Nacero Constructions then changed its name to Zeecat Constructions.

When Mr Chen provided the “JB Archi-Build” drawings to Mr Vartzokas, Mr Vartzokas discovered the existence of Nacero Group and that it was in the process of selling the Prospect Rd property to Yi Hong for $1,190,000. Settlement on the contract was due the next day following the hearing.

Mr Vartzokas sued seeking a mareva injunction to require the proceeds from the sale (after paying out the bank holding a registered mortgage over the property) be paid into the Federal Circuit Court pending trial of Mr Vartzokas’ copyright infringement claims.

Judge Brown granted the mareva injunction ex parte. On the question whether Mr Vartzokas had demonstrated a real risk that the assets would be dissipated and the Court’s process frustrated, his Honour pointed to the sneaky swap in ownership of the Prospect Rd property between Mr Younan’s companies, his failure to pay all Mr Vartzokas’ bills and continued use of the drawings without payment or recognition:

[35] I am also satisfied that the applicant has established a prima facie case that there is a real risk of assets being dissipated, if the relief sought is not granted. In my view, the significant evidence in this regard arises as a consequence of the change of name of Nazero Constructions Pty Ltd, which coincided with that entity not honouring the invoices submitted to it by the applicant. This failure to pay its debt, to the applicant, ultimately led to the winding up of the company concerned.

[36] More significantly, after the company had been liquidated, Mr Younan incorporated an entity with a similar name and transferred the land at Prospect to it. At the same time, Mr Younan appears to have been intent on developing the land in a similar manner to that which envisaged the intellectual input of Mr Vartzokas, but without either payment or recognition to him.

[37] In all these circumstances, I am satisfied that there is a significant risk that, if the injunction sought is not made, the proceeds of sale of the Prospect property will not be available to the applicant to either satisfy any award of damages to which he is entitled or to provide any accounting for the profits made on the sale of the land concerned, which, at least on a prima facie basis, seems to have included his architectural designs to be utilised on the property’s development.

His Honour also noted there was no prejudice to third parties as the bank mortgagee would get paid its due before money’s were paid into court.

Vartzokas Architects Pty Ltd v Nacero Group SA Pty Ltd [2017] FCCA 849


  1. Yes, I know we are supposed to call them an asset preservation order, but really ….  ?
  2. The usual implied licence can be excluded by an express written term to the contrary: Devefi v Mateffy Perl Nagy  ?
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