PC Implementation 1 Bill To Be Passed

The Senate’s Economics committee has unanimously recommended that the Intellectual Property Laws Amendment (Productivity Commission Response Part 1 and Other Measures) Bill 2018 be passed.

The Committee received submissions only on the proposed reform of the parallel import provision for trade marks – clause 122A – and issues relating to plant breeder’s rights.

The Committee considered no changes were required. In relation to the parallel imports question and the concerns that the defence of “reasonable inquiries” will lead to a pirate’s charter, the Committee said:

The committee notes that key parts of the bill originate from recommendations made by independent reviews, and that the provisions of the bill have been subject to extensive consultation. In particular, the committee commends IP Australia for its thoughtful response to the public consultation on the exposure draft of the bill which ultimately led to provisions of the bill being altered in important aspects.

and went on to find the test in the legislation appropriate.

Perhaps most alarmingly, the Committee started its analysis at paragraph 1.6 by endorsing the key points advanced by the Productivity Commission:

• Australia’s IP arrangements fall short in many ways and improvement is
needed across the spectrum of IP rights.

• IP arrangements need to ensure that creators and inventors are rewarded for
their efforts.

• Australia’s patent system grants exclusivity too readily, allowing a
proliferation of low-quality patents, frustrating follow-on innovators and
stymieing competition.

• Copyright is broader in scope and longer in duration than needed—innovative
firms, universities and schools, and consumers bear the cost.

• Timely and cost effective access to copyright content is the best way to reduce
infringement.

• Commercial transactions involving IP rights should be subject to competition
law.

• While Australia’s enforcement system works relatively well, reform is needed
to improve access, especially for small and medium sized enterprises.

• The absence of an overarching objective, policy framework and reform
champion has contributed to Australia losing its way on IP policy.

• International commitments substantially constrain Australia’s IP policy
flexibility.

• Reform efforts have more often than not succumbed to misinformation and
scare campaigns. Steely resolve will be needed to pursue better balanced IP
arrangements.

As the Committee acknowledged at 1.7, even the Government’s response did not go that far!

Senate Economics Legislation Committee Intellectual Property Laws Amendment
(Productivity Commission Response Part 1 and Other Measures) Bill 2018 [Provisions]
June 2018

Service providers and safe harbours

According to Parliament’s website, the Copyright Amendment (Service Providers) Bill 2017 passed its third reading in the Senate and has now had its first reading in the House of Representatives.[1]

Instead of amending the definition of persons who can (potentially) claim the benefit of the online safe harbours to accord with the definition of service provider required under the Australia – United States Free Trade Agreement,[2] it will extend the class of potential beneficiaries from carriage service providers to what may broadly be described as “the education, cultural and disability sectors”.

To implement this impending development, the Department of Communications and the Arts has released a consultation paper on on draft Copyright Amendment (Service Providers) Regulations 2018 (you have to scroll down to get to the links for (a) the consultation paper itself and (b) the draft regulations).

If you are in one of those sectors or a rights holder with concerns, you need to get your submissions in by 29 June 2018.


  1. Both these events occurred on 10 May 2018.  ?
  2. See art. 17.11.29(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, and for the purposes of the functions referred to in clause (i)(B) through (D), service provider means a provider or operator of facilities for online services or network access.”  ?

Staying arbitration: Kraft, Bega, Warner Bros and Mad Max

In the face of misleading and deceptive conduct litigation in Australia, O’Callaghan J has granted injunctions restraining Kraft from pursuing its arbitration claims in New York against Bega’s sale and promotion of Bega Peanut Butter in what Kraft alleges is misleading or deceptive get-up.

Kraft had been selling peanut butter in Australia under the Kraft brand for over 50 years. It had about 65% of the peanut butter market in Australia valued at over Australian $110 million per year.

In 2012, however, Kraft restructured its operations globally into a grocery business and a snack food business. The snack food business was operated by Mondelez.

Mondelez was given a licence to use the Kraft brand on, amongst other things, peanut butter which included the right to use the get-up Kraft had been using. The licence was due to expire at the end of December 2017.

Before the licence expired, Mondelez sold its Australian and NZ business to Bega. Bega began marketing its peanut butter in the get-up shown below:

 

Kraft peanut butter
Bega peanut butter

 

 

 

 

 

 

 

 

Kraft’s licence to Mondelez included a dispute resolution clause that all disputes arising under, or in relation to, the licence should go through the familiar three-tiered resolution process of consultation, mediation and, if not resolved, binding arbitration in New York:

Step Process: Any controversy or claim arising out of or relating to this Agreement, or the breach thereof (a “Dispute”), shall be resolved: (a) first, by negotiation and then by mediation as provided in Section 7.2; and (b) then, if negotiation and mediation fail, by binding arbitration as provided in Section 7.3. Each party agrees on behalf of itself and each member of its prospective Group that the procedures set forth in this Article VII shall be the exclusive means for resolution of any Dispute. The initiation of mediation or arbitration hereunder will toll the applicable statute of limitations for the duration of any such proceedings.

Kraft sought to initiate the dispute resolution process with Bega. Amongst other things, Kraft contends in the arbitration that Bega’s use of the Bega Trade Dress is in breach of the licence from Kraft to use the Kraft Peanut Butter Trade Dress. Kraft goes on to allege:

  1. Bega’s use of virtually identical trade dress on its peanut butter is likely to cause and is causing confusion, mistake or deception as to Kraft’s sponsorship and/or endorsement of Bega’s peanut butter product.

Considering that Bega was not complying with the process, Kraft launched proceedings in the Federal Court for the Southern District of New York to compel Bega to mediation. Bega, while reserving the right to claim it was not subject to the arbitration agreement, told the New York court it would participate in the mediation process.

In parallel with these developments, however, Kraft also commenced proceedings in Australia against Bega alleging that the promotion of the Bega peanut butter in the Bega get-up in Australia contravened the prohibitions on misleading or deceptive conduct in the Australian Consumer Law. According to Kraft, Bega’s advertisements and use of the Bega get-up misrepresented that Kraft peanut butter is now Bega peanut butter or is being replaced by Bega peanut butter and the Kraft brand has changed to Bega.

In the Australian proceedings, Bega cross-claimed and also sought injunctions ordering Kraft not to prosecute the arbitration proceedings. After careful consideration of the principles for ordering a party not to engage in arbitration, O’Callaghan J has granted that anti-arbitration injunction.

O’Callaghan J considered that the question of the ownership of the packaging and get-up was the central issue raised in both Kraft’s notice of arbitration and the proceeding under s 18 of the Australian Consumer Law.

If the question in the arbitration proceeding had simply been that the licence had expired and Bega had no right to use the get-up, there may not have been an overlap. As noted above, however, Kraft’s notice of arbitration went much further with allegations of false representations.

Kraft argued that its claims under s 18 of the ACL do not arise under or in relation to the contract, but are independent statutory causes of action. O’Callaghan J pointed out at [91] that whether the statutory cause of action was independent of, or in relation to, the contract depended on whether there was a nexus or connection between the contract and the contraventions which gave rise to the misleading or deceptive conduct claim.

In this case, there was such a connection as whether or not Bega’s conduct was misleading turned on the operation of the licence agreement. At [95], his Honour pointed out the alleged misrepresentations could only be false or misleading by virtue of the operation and effect of the terms of the licence agreement. Accordingly at [96]:

Kraft’s pleaded case in this proceeding is one in which it seeks to agitate a dispute which is properly to be characterised as being “in relation to” the master agreement. For that reason, in my view, Kraft should have invoked the dispute resolution provisions of the master agreement with respect to the claims made in this proceeding. It was not, as it contended, bound to bring the proceeding in this court.

Having found that the court proceeding and the arbitration addressed the same or at least overlapping subject matter, his Honour went on to find that it was appropriate to grant an injunction against pursuing the arbitration while the consumer law proceeding was on foot.

First, O’Callaghan J rejected any argument that it was necessary to show, in cases where parties had set up an arbitration process, an exceptional case or that the power to grant an injunction should be viewed through a “different prism”.

Secondly, his Honour acknowledged the tension between courts’ desire to hold parties to their bargains (i.e. respect the arbitration clause) and “deep and strong antipathy” to situations which could give rise to inconsistent verdicts.

Here, Kraft was the author of its own predicament. It could have (and should have) included its misleading and deceptive conduct claims in its arbitration notice, but instead had chosen to bring separate and additional proceedings in Australia. At [109]:

Kraft ought to have included the claims made in this proceeding under the Australian Consumer Law in its notice of arbitration because those claims, contrary to Kraft’s submission, do fall within the ambit of the arbitration clause in the master agreement. Instead, Kraft chose to initiate this proceeding, and then to prosecute it, including by filing a statement of claim and a reply to Bega’s defence, participating in procedural directions, seeking discovery, filing a notice to produce, consenting to the filing by Bega of a counterclaim (in which the issue of ownership of the trade dress issue is squarely raised) and then filing a defence to that counterclaim. As Bega submitted, Kraft is the party responsible for the bringing of both proceedings. It alone is the author of the possibility or probability of duplicated litigation and inconsistent findings. Each of those considerations also weighs significantly in favour of restraining the arbitration, at least until this proceeding is determined.

O’Callaghan J then went on to consider whether there were any equitable considerations that weighed against granting an injunction.

Finally, O’Callaghan J rejected Kraft’s argument that, instead of seeking an injunction against the arbitration proceedings, Bega should have applied under s 7(2) of the International Arbitration Act 1974 (Cth) for orders to stay the Australian proceeding. At [166]:

I reject that submission. First, Bega had no obligation to seek a stay under s 7 of the International Arbitration Act 1974 (Cth) or otherwise. Secondly, if the stay application was bound to have succeeded on those grounds, one would have thought it rather suggests that Kraft should not have brought the proceeding in this court in the first place.

After a subsequent hearing, O’Callaghan J rejected Kraft’s contention that the injunction against progressing the arbitration proceeding should only apply so long as Kraft’s application in the Australian proceeding was on foot. Kraft argued that Bega’s cross-claim was “a matter for Bega” and should not bear on the injunction. As his Honour noted, Kraft openly admitted the point here was that it may well discontinue its claim in Australia.

O’Callaghan J pointed out that the assessment of inconsistency was not made just on Kraft’s claim, but the pleadings as a whole. At [69], O’Callaghan J explained:

In assessing whether, and if so, to what extent, the issues in the two proceedings overlap, the scope of the relevant issues necessarily includes all the issues raised by the parties, including by Bega in its defence and counterclaim, and by Kraft in its statement of claim, reply and defence to counterclaim. That is so because when a foreign party brings a proceeding in an Australian court, it submits not only to its jurisdiction in respect of its own action, but also in respect of any cross-claim that a respondent brings: ….

Bega’s cross-claim and Kraft’s defence to it raised essentially the same central question as raised in Kraft’s claim and the arbitration proceeding: the ownership and rights to use the get-up in dispute.

A more conventional outcome is illustrated by Warner Bros Feature Productions Pty Ltd v Kennedy Miller Mitchell Films Pty Ltd, in which the NSW Court of Appeal ordered a stay of the court proceedings in favour of arbitration.

In Warner, George Miller and Doug Mitchell are in dispute with the Warner group over payments for their roles in producing and directing Mad Max: Fury Road. The Court of Appeal dealt with a construction fight whether the arbitration clause formed part of the contract or not. Finding it did, on Warner’s application the Court ordered a stay of the NSW proceedings.

In this case, unlike Kraft v Bega, the party seeking to enforce the arbitration clause, Warner, had not brought the potentially inconsistent proceedings – Miller and Mitchell did.

Kraft Foods Group Brands LLC v Bega Cheese Limited [2018] FCA 549

Kraft Foods Group Brands LLC v Bega Cheese Limited (No 2) [2018] FCA 615

IP Laws Amendment ( Productivity Commission Response Pt 1 etc) Bill 2018

On May 10, the Intellectual Property Laws Amendment (Productivity Commission Response Part 1 and Other Measures) Bill 2018 was referred to the Senate’s Economics Legislation Committee.

You may recall that, amongst other things, the Bill has another go at parallel imports and trade marks (which also entails repealing s 198A of the Copyright Act 1968), reduces the period before registered trade marks can be attacked for non-use, permits non-PBR-protected varieties to be declared as essentially derived varieties and a host of other reforms (Sch. 2 has 21 Parts)

The Senate committee is required to report on the bill by 22 June 2018.

If you are an agricultural organisation, medical research industry, an IP peak body (who is not going to INTA) or somehow at a loose end, you need to get your skates on as submissions must be made by 1 June 2018.

Patent cases in the Federal Court

Kelvin Tran from Litimetrics has published some fascinating statistics about patent litigation in the Federal Court of Australia.

For example, since 2010, 472 cases have been commenced in the Federal Court involving patent issues. Mr Tran points out that number “compares” to 160,000 granted standard patents and 1,400 certified patents.

The publication also includes a breakdown of numbers by registry, length of proceedings, time to resolution and the average number of typical events such as directions hearings, interlocutory applications and the like. They may be useful if you have to prepare a budget or a costs disclosure statement. To view Mr Tran’s statistics, you should go here.

New Twist In Website Blocking Injunctions

Nicholas J has granted further injunctions under s 115A against the telcos / ISPs to block access to websites related to HD Subs+.

The interesting point about these injunctions is that the blocked websites provide software[1] to be downloaded for X–96 Smart TV Boxes, set-top boxes which provide a subscription service to access pirated streams of films and television programs.

Once the user had downloaded the software and activated a subscription, the software would connect to “facilitating servers” which authenticated the user, provided electronic programming information, software updates and content management information – allowing retrieval of the IP addresses of the “content servers” that hosted the movie or TV program to be streamed.

Thus, the primary purpose of the HD Subs service was to “facilitate” copyright infringement. At [21], Nicholas J explained:

The target online locations contribute functionality to a subscription based online service (“the HD Subs service”) that facilitates the electronic transmission of films and television broadcasts in which copyright subsists, without the licence of the copyright owners. The target online locations facilitate such infringements by providing updates, authenticating users or providing EPG information for the HD Subs service. This appears to be their sole function. In the case of the HD Subs website, it provides the HD Subs+ Apps, processes payments, and provides activation codes that enable a user to access the HD Subs service. Again, this would appear to be its sole function.

The terms of the injunctions correspond with the decisions already handed down – so much so that the ISPs didn’t turn up.

Roadshow Films Pty Limited v Telstra Corporation Limited [2018] FCA 582


  1. The HD Subs+ App, the upgraded HD Subs+ App and the Press Play Extra App.  ?

ESCO’s patent did not make a composite promise and so is not invalid afterall

ESCO has won its appeal from the ruling that its patent lacked utility because the claims did not fulfill all promised advantages.

The Patent

ESCO’s patent relates to a wear assembly for securing a wear member to excavating equipment. Think of it as a way of attaching “teeth” to an excavating bucket and for a design of the “teeth” themselves.

There are 26 claims.

Claim 1 (and its dependent claims)[1] are for a wear member:[2]

a wear member for attachment to excavating equipment. The wear member comprises:
(a) a front end (to contact materials being excavated and to protect the excavating equipment);
(b) a rear end;
(c) a socket that opens in the rear end of the wear member (to receive a base fixed to excavating equipment);
(d) a “throughhole” in communication with the socket;
(e) a lock “integrally connected” in the throughhole and movable without a hammer;
(f) between a “hold position” and a “release position”;
(g) the lock and the throughhole being cooperatively structured to retain the lock in the throughhole in each of the hold and release positions;
(h) irrespective of the receipt of the base into the socket of the wear member or the orientation of the wear member;
(i) a “hold position” (where the lock can secure the wear member to the base); and
(j) a “release position” (where the wear member can be released from the base).

Claim 13 (and its dependent claims)[3] are for the wear assembly:[4] essentially, a wear assembly designed to enable the attachment of the wear member of claim 1 to the bucket.

You may get some idea of what is claimed from these figures. The wear member is 28, shown fitted to the base 15 of the wear assembly.

Utility

The trial Judge

Paragraph 6 of the Specification was the first paragraph under the heading “Summary of the Invention”:

The present invention pertains to an improved wear assembly for securing wear members to excavating equipment for enhanced stability, strength, durability, penetration, safety and ease of replacement. (Full Court’s emphasis)

As to which the expert evidence was:

In relation to enhanced strength, none of the claims would achieve this advantage.

In relation to enhanced stability, claims 3 and 5 may provide a minor stability advantage as set out in paragraphs 14–21 of my first affidavit. ….

In relation to enhanced durability, none of the claims would achieve this advantage.

In relation to enhanced penetration, none of the claims would achieve this advantage.

In relation to enhanced safety, claims 1, 11, 13, 21, and 22 would achieve this advantage.

In relation to enhanced ease of replacement, claims 1, 4, 6, 8, 9, 12, 13, 16, 19, 22, and 25 would achieve this advantage.

In light of this evidence, the trial Judge had found ESCO’s patent invalid because the claims did not achieve all six of benefits promised by paragraph 6 of the Specification.

The Full Court

On appeal, the Full Court accepted the basic premise applied by the trial Judge: a claim is bad for inutility if following the teaching in the Specification does not lead to the promised result. There has been a failure of consideration. So, the Full Court explained at [208]:[5]

first, provided the results promised by the specification can, on the evidence, be achieved and, second, provided that those results can be applied to at least one useful purpose, the patent for the claimed invention does not fail for inutility. If, however, the promised results are unfulfilled or unrealised, the patent for the claimed invention will be bad for inutility

Further, if the Specification properly understood contained a “composite” promise, any claim which failed to achieve any one of the elements of that composite promise would be bad for inutility. At [239]:

We therefore accept that if para 6 of the Patent Application, properly understood having regard to the whole of the Specification including the claims, contains a “composite” promise for the described invention, a failure to attain any one of the elements of the composite promise in any claim defining the invention renders the invention so far as claimed in any claim, inutile.

The question then is – what is the promise of the invention?

It followed from the requirements of s 40, which required the specification to describe the invention fully and claims to define the invention,[6] that identification of the “promise” of the invention required consideration both of the body of the specification and the claims.

That consideration led the Full Court to conclude either that paragraph 6 of the Specification was not the “promise” of the invention. Or, alternatively, if it were, the several elements in paragraph 6 were to be read disjunctively rather than, as the trial Judge had done, conjunctively. In either case, ESCO’s patent was not bad for inutility.

The central consideration here was that the claims were directed to two related, but different entities: claims 1 to 12 being directed to the “wear member” only; claims 13 to 22 being directed to the “wear assembly”. Correspondingly, paragraphs 7 to 20 of the specification dealt with various “aspects” of the invention and, in doing so, paragraphs 15 and 16 identified the “promises” of the invention.

The Full Court considered paragraph 5 of the specification as reciting historical attempts “to enhance the strength, stability, durability, penetration, safety and/or ease of replacement of “such wear members” … with varying degrees of success.” The Full Court then characterised paragraph 6 as continuing that discussion to open the summary of the invention.

Paragraphs 15 and 16 of the specification said:

In one other aspect of the invention, the lock is integrally secured to the wear member for shipping and storage as a single integral component. The lock is maintained within the lock opening irrespective of the insertion of the nose into the cavity, which results in less shipping costs, reduced storage needs, and less inventory concerns.

In another aspect of the invention, the lock is releasably securable in the lock opening in the wear member in both hold and release positions to reduce the risk of dropping or losing the lock during installation. Such an assembly involves fewer independent components and an easier installation procedure. (Full Court’s emphasis)

So, at [291], the Full Court explained:

It seems to us that the language of para 6 consisting of a single sentence under the heading “Summary of the Invention” is not, properly construed, the language of “promises” (as Ronneby would have it) for the invention described in the Specification as a whole, including the 22[7] claims, some of which are concerned only with the wear member and others with the wear assembly. Rather, the language of para 6 is seeking to do something less than that. The language of para 6 resonates with para 5 and seems to be used in the sense of reciting those things to which the invention relates having regard to the design efforts that went before, and thus the relationship between “the invention” and those things recited in para 6 is one of identifying the topics or subject matter to which the invention relates (rather than “promises” for the invention), which, having regard to paras 7 to 20 “describing” the invention (including the best method in conformity with s 40(2)(a)), may or may not find expression in the claims “defining” the invention for the purposes of s 40(2)(b). In that sense, the fully described invention may go beyond the scope of that which is actually claimed. Thus, it is necessary to identify the “teaching” of the Specification and the relationship between the teaching and the claims. Rather, the promises for the invention so far as claimed in, at least, Claim 1 and the dependent claims, are to be found in paras 15 and 16 of the Specification as we explain later in these reasons.

The two different targets of the two sets of claims were also significant for the alternative conclusion that the list of achievements in paragraph 6 should be read disjunctively. The Full Court accepted that the language of paragraph 6 of the specification was appropriate for the claimed wear assemblies achieving all 6 listed benefits. However, the Full Court considered that the language of paragraph 6 was incompatible with the idea that each claim for the wear member must satisfy all 6 promises.

Accordingly, paragraph 6 of the specification should be read disjunctively and the claims were not bad for inutility.

In the course of its lengthy historical review, the Full Court did note that s 7A now required the Specification to disclose a specific, substantial and credible use for the claimed invention for it to be useful. Section 7A had been introduced into the Act by the Raising the Bar Act[8] and so was not relevant to ESCO’s patent. The Full Court noted, however, that s 7A was intended to add additional requirements to the test of utility, not displace the old requirements. Thus, at [231], the Full Court commented:

Rather, the invention [subject to the Raising the Bar Act amendments] must meet the new test and meet the requirements of the existing law: EM p. 44.

I am guessing we shall see significantly more patent specifications in the future which claim that it is “an object of the invention to …” or, perhaps, the invention achieves “one of more of ….” Might be a bit tricky to amend assertions in a patent first filed overseas.

Novelty

ESCO’s novelty appeal was also successful. It was essentially an exercise in construction, turning on whether the locking mechanism in the prior citation was “integral” and moved between two defined points- a “hold position“ and a ”release position”.

ESCO Corporation v Ronneby Road Pty Ltd [2018] FCAFC 46 (Greenwood, Rares and Moshinsky JJ)


  1. Strictly speaking, claims 5, 6 and 9 are independent claims, but nonetheless are for “wear members”.  ?
  2. The explanatory interpolations are the Full Court’s.  ?
  3. Claim 19 is also an independent claim for a wear assembly.  ?
  4. A wear assembly for attachment to excavating equipment comprising: (1) a base fixed to the excavating equipment; (2) a wear member including a front end to contact materials being excavated and protect the excavating equipment, and a rear end to mount to the base fixed to the excavating equipment; and (3) a lock integrally connected to the wear member and movable without a hammer between a hold position where the lock contacts the base and the wear member to secure the wear member to the base and a release position where the wear member can be released from the base, wherein the lock remains secured to the wear member in the release position. (My numbering to deal with formatting limitations)  ?
  5. Citing amongst others LaneFox v Kensington and Knightsbridge Electric Lighting Co (1892) 9 RPC 413.  ?
  6. ESCO’s patent being a pre-Raising the Bar patent, s 40 in it earlier form applied.  ?
  7. Presumably, a typo.  ?
  8. By which I of course mean schedule 1 of the Intellectual Property Laws Amendment (Raising the Bar) Act 2012.  ?

Amsterdam in July?

The Institute for Information Law at the University of Amsterdam is holding two copyright related courses between 2 and 6 July:

Follow the links for more information.

The Hague Agreement: a cost benefit analysis

IP Australia has published a cost benefit analysis for Australia joining the Hague Agreement for registration of designs.

You are no doubt thinking that sounds very exciting (not). But, even if you are not into registered designs, you SHOULD READ IT. This is the Government’s first attempt at applying the Productivity Commission’s call for any proposals to reform intellectual property laws to be economically justified. As the Report says in the first paragraph of the Executive Summary:

The report assesses the impacts [i.e., the costs and benefits to Australia of joining the Hague Agreement] with reference to the Productivity Commission’s (PC) guiding principles of effectiveness, efficiency, adaptability and accountability. This report is intended to form part of the evidence base in relation to whether Australia should join the Hague Agreement.

So, unless it involves an acronym that is like TPP, this could well be a harbinger of things to come.

And what does it conclude find:

  • IP Australia’s best estimate of the net benefit for Australian designers is $1.7 million;[1]
  • IP Australia’s best estimate of the net cost to Australian consumers from higher prices resulting from the longer term of design protection is $58 million;[2]
  • to add a little bit more spice to the debate, IP Australia’s best estimate of the net cost to Australian IP professionals is $2.5 million;[3] and
  • IP Australia’s best estimate of the net cost to the Australian government of implementing new systems etc. to comply with Hague is $2.8 million.[4]

The big question IP Australia is asking you is how realistic are these estimates?

Now, in arriving at these numbers, the Report does include quite a lot of hard data.
For example, most Australians who file designs overseas do so in the EU, the USA, NZ and China. On the other side of the coin, most incoming design registrations were from the USA, the EU, Japan, NZ, Switzerland and China.[5]

On the other hand, the Productivity Commission reported that less than 20% of registered designs are renewed beyond the first 5 year term.[6] According to IP Australia, however, approximately half of all design registrations are renewed for the second 5 year term and non-residents are more likely to renew than Australians.[7]

Will we become better at designing if we “stick” with our current settings – 19th out of the top 40[8] – or should we “twist” and sign up? Of course, there is an anterior question: do we even care about good design in the first place?

IP Australia is seeking feedback on its cost-benefit analysis and its proposed methodology to elicit additional evidence and views with the aim of finalising the analysis in 2018. You should get your say in by 31 May 2018.

The Hague Agreement Concerning the International Registration of Industrial Designs: A cost-benefit analysis for Australia March 2018


  1. This represents the costs savings from the simplified application procedure and the increased profits from taking new designs overseas. IP Australia estimates the range of benefit is from $0.03 million to $6 million.  ?
  2. This represents how much Australian consumers would pay to overseas owners of registered designs if the term of a registered design was extended from 10 years (currently) to the minimum 15 years required under Hague. IP Australia estimates a resulting range of net outflows from $23 million to $114 million.  ?
  3. IP Australia anticipates that “IP professionals” will garner some extra work at the examination stage but will lose work at the filing stage as the Hague Agreement provides for one central application to WIPO rather than multiple individual application to each separate jurisdiction. IP Australia estimates a range from a benefit of $0.3 million to a cost of $12 million.  ?
  4. The Government (presumably that means IP Australia) will incur costs between $2.3 and $3.4 million in upgrading its IT systems.  ?
  5. Report p. 10. It’s not clear from this part of the Report whether Australian applicants filed in all, some or only one of those destinations.  ?
  6. Productivity Commission, Intellectual Property Arrangements: Final Report, p. 337. These were the figures from ACIP as at 2013.  ?
  7. Report p. 11. In 2010, 66% of non-residents renewed. How the discrepancy between the Productivity Commission’s figures (i.e.,
    ACIP’s figures) came about is not clear.  ?
  8. Report Appendix 3 table 4.1.  ?

Bohemia Crystal shattered

Like MICHIGAN for farm equipment and OXFORD for books, Burley J has ordered that Bohemia Crystal’s trade marks, BOHEMIA and BOHEMIA CRYSTAL be revoked because they are not distinctive of “glassware”.

Bohemia Crystal (BCP) had been formed in 1975 to distribute in Australia Skloexport’s products. Skloexport was the State-owned entity responsible for the export of all crystal and glassware products made in Czechoslovakia. In 1999, Skloexport went into liquidation and BCP took an assignment of its Australian trade marks. The main trade mark BCP used in this period, which had been registered since 1962 was the stylised BOHEMIA Glass mark, TM No. 319701:

Versions of this mark were used with or without the words “Made in Czech Republic” or substituting the word “Glass” for “Crystal”.

On 5 October 2001, BCP applied for and successfully registered BOHEMIA CRYSTAL for glassware and on 2 May 2003 BCP applied for and successfully registered BOHEMIA for glassware.

Host is an importer and supplier of catering goods and equipment in Australia. The business was started in 1999. One range within its 2,500 product lines is its range of glassware sourced from another Czech supplier, Forincorp, marketed under BANQUET BY BOHEMIA [1] or:

Host started importing this line in 2015. BCP made the fateful decision to start proceedings for infringement of its registered trade marks and contravention of the Australian Consumer Law for false and misleading conduct.

Burley J held that BCP’s trade marks lacked any capacity to distinguish and had not been used in such a way as to have acquired secondary meaning for the purposes of s 41(6).[2] Burley J also dismissed BCP’s allegations of misleading or deceptive conduct.

It is not going to be possible in a blog post to do justice to Burley J’s 376 paragraphs. Instead five points particularly caught my eye.

First, Burley J (who was a very experienced intellectual property barrister before his appointment) pointed out that the High Court in Cantarella referenced both ordinary consumers and traders as the criterion for whether or not a sign was inherently adapted to distinguish.

BCP argued that the test focused on what ordinary consumers would think the sign meant. It had found an expert who opined that ordinary members of the public would think “bohemia” was a reference to persons with an artistic or unconventional lifestyle.

After analysing Cantarella from [86] on, his Honour concluded at [93]:[3]

in a case such as the present, it is necessary to consider the ordinary signification of the words “Bohemia” and “Bohemia Crystal” in the context of the “target audience”, being traders and consumers of the relevant goods, to determine whether at the relevant dates other traders might legitimately desire to use these words or something similar in connection with their goods, for the ordinary signification which they possess. …. (emphasis supplied)

Here, despite the evidence of BCP’s principle witness, the evidence was largely one way. It was beyond dispute that for many centuries the geographic region known as “Bohemia” which is now in the Czech Republic had a strong reputation for producing high quality crystal and glassware. There was evidence that between at least four and ten different manufacturers used the term “Bohemia” at an important annual glassware trade show to signify the geographic origins of their products. There was also evidence from a number of dealers that the term signified to the public glassware originating from the Bohemia region. BCP’s own registered user agreements for the use of Skloexport’s trade marks had also required it to promote its products as from the geographic region, Bohemia.

Burley J concluded that other traders who had glassware manufactured in the region formerly known as Bohemia legitimately and honestly wanted to use that word to describe the geographic origins of their products. The fact that Bohemia was no longer a separate country (and had not been since the World War I) and not even the contemporary name of the region was not significant.[4]

Second, Burley J found that the evidence of use of the BOHEMIA and BOHEMIA CRYSTAL did not establish that those terms had been used by BCP as trade marks or in such a way as to have acquired secondary meaning. There were three aspects to this conclusion.

Following BP v Woolworths, promotion and use is not enough. It had to be shown that the signs as registered had been used in some way to identify the signs as being trade marks.

Next, for the most part the relevant evidence showed that what BCP had been using as a trade mark was Skloexport’s composite mark, not the terms as registered. This was not use of either trade mark as registered. Moreover it was the combination of the elements in the signs as a whole which comprised the distinctiveness. These signs should not be dissected into their component parts:

228 I have some difficulty with the proposition that the words “Bohemia” or “Bohemia Crystal” should in this context be regarded as having separate trade mark signification beyond the combination in which they appear in the composite marks described above. In my view, it is the combination of elements that is distinctive. The trade mark should be viewed as a whole and not dissected into parts. Although this is likely to be a matter of fact for each case, it is notable that several cases have cautioned against the proposition that separate elements should be so distilled; see Diamond T Motor Car Company [1921] 2 Ch 583 at 588, Fry Consulting Pty Ltd v Sports Warehouse Inc (No 2) [2012] FCA 81; (2012) 201 FCR 565 at [61], [63].

229 To my eye, the whole of the 701 mark is to be regarded as creating a complicated image that taken collectively represents a sign, or badge of origin. I do not think that the elements within it may be dissected or that they would be dissected by an ordinary consumer of goods within the relevant classes. In any event, I consider that the words “Bohemia Crystal” and “Made in Czech Republic” within the 701 mark tend to reinforce the descriptive, geographical signification of those words. ….

The third factor is the way that evidence was advanced did not help BCP’s case. A lot of the evidence was vague, or general, rather than specific to what needed to be proved here: use of the signs as trade marks before the filing date. In this respect, his Honour’s discussion will repay careful study as it is not uncommon to see evidence prepared for the Office suffering from similar problems.

Third, BCP did not demonstrate any sufficient reason why its trade marks should not be removed from the Register. Burley J accepted that, Host having established the marks were invalidly registered, BCP bore the onus of satisfying the Court that there was sufficient reason not to order cancellation.

Here, the evidence did not establish that BCP had acquired distinctiveness in its signs. Importantly, allowing BCP to keep its registrations would give it an unfair advantage. At [248], his Honour explained:

…. The presence of the existing ground of revocation via the operation of subsection 88(2)(a) and s 41 indicates an intention on the part of the legislature to ensure that historical registrations should not remain on the Register where they should not have been granted in the first place. In the present case, to permit such a course would advantage the unmeritorious registrant who has incorrectly had the benefit of the monopoly since the relevant dates. BCP is able to apply to register the Bohemia marks now, should it choose to do so.

Of course, if it were to do so, it would run the risk of other traders wishing to use the terms opposing (if the Registrar got suckered into accepting the applications in the first place).

Fourth, if his Honour had not found BCPs trade marks invalidly registered, Host would have infringed. Its attempt to rely on s 122(1)(b) would have failed. This part of the case essentially turned on Host’s use being BANQUET by Bohemia (emphasis supplied) rather than BANQUET from Bohemia.

Burley J accepted that s 122 could be invoked to protect trade mark use, not just descriptive use. However, Host’s form of use showed that Host was trying to assert origin in some particular trade source rather than some geographical origin. At [301]:

…. Ms Flint and Mr Sullivan adopted this language, notwithstanding the obvious difficulty with the perception of “by” and with no knowledge of either BCP or the Bohemia marks. However, I find that they did not do so for the purpose of using “Bohemia” to designate the geographical origin of the goods, but to designate the trade origin of the goods lying in a particular entity (which was ultimately Forincorp). Accordingly, the use does not fall within the defence ….

Fifth, BCP’s allegations of misleading or deceptive conduct also failed. A number of factors contributed to this including the particular trade marks BCP had actually used and the good old-fashioned Hornsby Building Information Centre proposition.[5] In contrast to the trade mark case, in addition, it was highly significant that Host’s market and BCP’s market were quite different. BCP’s market was member of the general public looking for premium quality products. Host’s customers, however, were cafes, restaurants, pubs, clubs, community groups and the like who were cost conscious but attended to their purchases with considerable care. So, for example, at [370]:

the typical reasonable consumer is most likely to perceive the October 2015 catalogue use to represent that the manufacturer or producer of the glassware is an entity known as “Banquet by Bohemia” or “Bohemia”, there is no more than a remote prospect that reasonable customers are likely to consider that the goods offered in the catalogue are offered with the sponsorship or approval of BCP or are offered by Host with the approval of BCP or that the Banquet products emanate from BCP. First, I do not consider that the typical Host customer who encounters this publication would be likely to be aware of BCP. Secondly, I consider that any Host customers who are aware of BCP would understand it to be a retailer of a range of glassware products sold under a range of different brands. Thirdly, to the extent that such customers perceive that BCP has a trade connection with products that it sells, those customers are likely to do so by reference to the common use of the 701 mark or the modified 701 mark. Without the presence of that mark, in my view they are unlikely to consider that the word “Bohemia” as it appears in the impugned uses connotes a connection or association with BCP. Needless to say, no such mark appears in the October 2015 catalogue. Fourthly, such customers would also be influenced by the geographical nature of the term and the material differences between the Host and BCP products such as price, quantity and quality. ….

Bohemia Crystal Pty Ltd v Host Corporation Pty Ltd [2018] FCA 235


  1. It also used BANQUET CRYSTAL BY BOHEMIA, CZECH CRYSTAL BY BOHEMIA and expressions like BANQUET FLUTE.  ?
  2. Given the filing dates of BCP’s trade marks, the original form of s 41 applied.  ?
  3. See also [153] – [155].  ?
  4. At [161], Burley J pointed out that PERSIA in the Persian Fetta case and Peking and Ceylon still retained their signification as place names.  ?
  5. If you are going to use a descriptive expression, you have to accept a certain degree of confusion is inevitable.  ?
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