IPwars.com

Mainly intellectual property (IP) issues Down Under

Confidentiality, unconscionability and contract

Telstra and Optus have an interconnect agreement, in part to regulate how callers originating from one network get delivered to the other, charges and the like.

Optus successfully sued Telstra for misusing Optus’ confidential information under the agreement: information about call traffic between the two networks.

(You should look at that judgment as it illustrates the two-edged nature of many definitions of confidential information.)

In this part of the fight, Edmonds J declined to grant relief under the equitable obligation of confidence as the contractual obligations in question were comprehensive.

His Honour also explored the meaning of the prohibition on unconscionable conduct in s 51AA of the TPA, but declined to find a contravention in that context.

Optus Networks Ltd v Telstra Corporation Ltd (No. 3) [2009] FCA 728

Terms of Service Tracker

The blogosphere ‘lit up’ and Facebookers (?) went on the rampage when it emerged that Facebook was unilaterally changing its terms of use (and not telling anyone) – Facebook: All Your Stuff is Ours, Even if You Quit.

Jonathon Bailey at Plagiarism Today looks at the EFF’s new TOSBack so you can keep up to date with how your service provider is “shifting the goalposts”.

Google, for example, amongst other things insidiously changed “Terms of Service for Blogger.com” to “Blogger Terms of Service”. (Vote of thanks to whichever Supreme Being I’m following today that I don’t use Blogger!)

All joking aside (and remembering the outrage at Facebook – hope Twitter doesn’t own all my tweets?), this could be a very practical tool.

p.s. Facebook did allow its outraged users to set up a community on Facebook to campaign against the change.

Googling it …

From the blogsite:

We started with a set of tough questions:

  • Why do we have to live with divides between different types of communication — email versus chat, or conversations versus documents?
  • Could a single communications model span all or most of the systems in use on the web today, in one smooth continuum? How simple could we make it?
  • What if we tried designing a communications system that took advantage of computers’ current abilities, rather than imitating non-electronic forms? 

After months holed up in a conference room in the Sydney office … And now, after more than two years of expanding our ideas … Today we’re giving developers an early preview of 

Google Wave

Wave

Lid dip @joshgans; Where Tim O’Reilly sees it fitting in (via @dhowell via Dennis Kennedy via Shelley Powers). Mashable here and here.

“All of a sudden we realized we were in the auction business.”

The Annual Meeting of the American Economics Association tries to work out how Google works or how AdWords changed the world:

here

A tidbit:

During the question-and-answer period, a man wearing a camel-colored corduroy blazer raises his hand. “Let me understand this,” he begins, half skeptical, half unsure. “You say that an auction happens every time a search takes place? That would mean millions of times a day!”

Varian smiles. “Millions,” he says, “is actually quite an understatement.”

Lid dip @joshgans

Acceptance by email

Logan J expresses the view, which in the end wasn’t necessary for his decision, that the instantaneous communication rule applies when considering when and where the acceptance of an offer by email occurs. That is, his Honour would employ an analogy to telexes – the place where the message is received; not the postal rule the time and place where the letter was posted.

25.  Flottweg’s acceptance was communicated by email to Olivaylle at its olive grove in Victoria. Experience suggests that email is often, but not invariably, a form of near instantaneous communication. The parties seemed content to assume that the place of contract was either Victoria or New South Wales, content because the common law of Australia was the same in either place and so, too, was the only statute law considered material. There was no suggestion in submissions that the place of contract was, for example, Germany. As a result, the ramifications of the adoption by the parties of email for their written pre-contractual communications, particularly the acceptance, were not explored. As it happens, the subject of formation of contracts by email has been explored in depth in an article by a local academic, Christensen S, “Formation of Contracts by Email Is it Just the Same as the Post?” (2001) 1(1) Queensland University of Technology Law and Justice Journal 22. Ms Christensen details there arguments for and against the assimilation of email communications with “the postal rule” or with what one might term “the instantaneous communication rule” and also the local adoption of international convention which touches on the subject. Having regard to the position taken by the parties in this case, it is not necessary to give detailed consideration to the point. It is enough to observe that I consider that there are analogies to be drawn with the way the law developed in relation to telex communications in an earlier era where what I have termed “the instantaneous communication rule” came to be adopted, perhaps at the expense of scientific precision but not so in relation to common commercial understanding. Thus, by analogy with cases concerning the position with what were, or were treated as, other forms of instantaneous communication, I consider that the contract was made where the acceptance was received, ie in Victoria: Entores Ltd v Miles Far East Corporation [1955] 2 QB 327; W A Dewhurst & Co Pty Ltd v Cawrse [1960] VR 278; Express Airways v Port Augusta Air Services [1980] Qd R 543; Reese Bros Plastics Ltd v Hamon-Sobelco Australia Pty Ltd (1988) 5 BPR 11,106.

Olivaylle Pty Ltd v Flottweg GMBH & Co KGAA (No 4) [2009] FCA 522

Lid dip Inchoate.

This seems eminently sensible in many situations, but could well prove rather random. Suppose you’re travelling from INTA and you get the email on your Blackberry (or that other phone) at LAX. Contract governed by the laws of California?

Use of Software and those computer defences again

You’ll recall that SAG licensed its database software to RWWA. RWWA engaged KAZ to provide disaster recovery services and installed a copy of the software on KAZ’ off-site servers. Meckerracher J dismissed SAG’s claim that this was unlicensed and therefore infringement of its copyright. (link via my attempt to summarise here).

The Full Court has substantially dismissed the appeal, but found the judge was wrong to the extent his Honour considered s 47F of the Copyright Act 1968 would have provided a defence also.

On the question of licence construction, their Honours found that the proposed use fell within the terms of the licensed use “for … emergency restart purposes“:

34 The phrase “for … emergency restart purposes” is more ample than, for example, “in order to restart the System in an emergency”. A penumbra surrounds “emergency restart”. It is a natural reading of the composite phrase to include within its coverage testing whether the copied System will restart should an emergency occur.

35 If one were to regard the phrase “for … emergency restart purposes” as open to two constructions, SAG’s construction, in our view, results in a meaning that would be unreasonable or inconvenient. The purpose behind clause 12.3 is to protect RWWA from serious loss in an emergency, whether caused by a breakdown of its mainframe or some external event putting it out of action. It would be an unreasonable and inconvenient result if RWWA were to be unable to take sensible steps to make it more likely that the purpose behind clause 12.3 would be achieved, by testing the copied system in order to maximise the chance of the restart occurring in the event of an emergency arising.

36 Further, we agree with the primary judge’s observation quoted at [28] that SAG’s interpretation would make clause 12.3 a pointless exception to the other prohibitive or restrictive provisions of the agreement, and that such a construction would provide very little scope for achieving the purpose of clause 12.3 described above.

The expert evidence was also consistent with this.

While the Licence Agreement did (by clause 1.4) expressly prohibit the software being installed at any location other than the “designated location”, the clause had to be read in context and clause 12.3, as SAG acknowledged, did permit RWWA to use the software “for archival or emergency restart purposes”. Clause 1.2,which prohibited “use” on anything other than the designated hardware, similarly had to be read down.

If the terms of the licence had not been capable of construction to permit this (fairly typical) type of disaster recovery strategy, however, s 47F would not have protected RWWA. S 47F provides a limited defence for “security testing”. However:

55 What s 47F(1) permits is the reproduction of the original copy for the purpose of testing the security of that copy. The original copy is the copy RWWA is licensed to use. The permitted testing is of the security of that copy. The passages from the primary judge’s reasons quoted at [49] appear to us to be saying that the testing of the functionality of the DR Copy at the DR Site is the testing of the security of the original copy at Osborne Park. That, in our view, is not what s 47F(1) authorises. On the facts of this case, what it permits is the making of a copy of the installed copy at Osborne Park for the purpose of testing the security of the installed copy. As it seems to us, the primary judge’s construction of the provision enables the DR Copy at the DR Site to be tested so as to determine its efficacy should the installed copy at Osborne Park for some reason be no longer available.

and, given the unchallenged expert evidence on the issue:

68 For the above reasons we are unable to accept RWWA’s contention, which the primary judge appears to have adopted, that “testing … the security of the original copy” extends to what was done at the DR Site, namely testing of the DR Copy to ensure that the System would be capable of being restarted and operated without the loss of data. In our view, “testing … the security of the original copy” should be confined to testing the original to ascertain its security from unauthorised access or against electronic or other invasion.

The Court noted, but did not need to consider the correctness, of his Honour’s conclusion that s 47C would also have protected RWWA.

So, an appellate level illustration providing some confirmation of how strictly the the Courts will approach the gobbledygook enacted in the special computer program defences. Make sure you draft your software licences to provide the protection actually needed – especially if the software needs to be used in a “disaster recovery” situation.

Software AG (Australia) Pty Ltd v Racing & Wagering Western Australia [2009] FCAFC 36 (Spender, Sundberg and Siopis JJ)

A tool bar for detecting hosts etc.

If you are trying to work out who is hosting a website and where it is being hosted, you might be interested in this discussion of the Netcraft toolbar.

Note:

  1. this is only for those using Firefox or Internet Explorer.
  2. Use at your own risk!

Pirated software at work

Over at Slashdot you will find some thoughtful (and practical) suggestions about what to do (from the in-house IT guy’s perspective) if you (or your client) finds pirated software at work – be warned, you have to scroll through the usual behind the shelter shed contributions.

Lid dip: Marty

Patenting software in the UK (Europe)

The UK Court of Appeal has apparently broadened the scope to patent computer software:

Symbian Limited v. Comptroller General of Patents [2008] EWCA Civ 1066

Paul Cole guest posts at Patently-O. IPKat extensively here.

3 helpful iPhone apps for Australians

AroundMe

Metro Public Transport (Melbourne, Sydney and Perth) a free and paid version for Melbourne

Pocket Weather AU (like the great widget, but you have to pay)

Another 5 another lawyer likes.

The three I mention can be (are) Australian specific information services.  These work well because they relate to location specific things which the iPhone can retrieve.  Most of the other apps I find useful really need to sync with my computer; first, because it’s easier to enter the data on the computer and, secondly, because you don’t want to be entering things twice or three times or ….

Unfortunately, the way the iPhone is designed to work means that most of these apps – sugarsync, Evernote etc. – work “in the cloud” (Our ABC here). They must be stored on the internet or pass through an internet host. That has potential security and privacy concerns (assuming the technology works).

That feeds into a different concern raised by Jonathan Zittrain in The Future of the Internet and How to Stop it. We are being present with a range of proprietary offerings that are acting a bit like gated communities in which you only get what the provider is willing to offer. Prof. Zittrain contrasts that to his view of the way the Web has worked till now: someone provided the underlying technology and hosts of people came along with hosts of customised solutions that you could choose to use.

Android? Well, it seems potentially to be much more open than the iPhone. Hopefully, it will force a lot more open-ness through competition but, of course, Google has its own “cloud”.

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