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Mainly intellectual property (IP) issues Down Under

The Secret – more forum wars

Late in July, Sundberg J found that Australia was clearly an inappropriate forum to litigate the dispute over ownership and infringement of copyright in the film and the book, The Secret.  Now there is an appeal on foot.

To recap: interests associated with Ms Rhonda Byrne commenced proceedings in Australia claiming to be the owner of copyright in the film of The Secret.  Drew Heriot was the director of the film – there is a dispute between the parties over whether he was employed by one of the Byrne interests or the respondent in this proceeding.  In any event, the Heriot interests brought parallel proceedings in the USA.

Sundberg J considered Australia was clearly an inappropriate forum.  Broadly, this was on the basis that it was necessary to have regard to the whole dispute between the parties, not just the component of the litigation relating to Australia.  On that basis, by far the greater amount of damages at stake were those for infringement in the USA (the book has featured on Oprah, amongst others) and only the US court would have power to amend or correct the US Register of Copyrights.  The judge in the US has apparently reached a similar conclusion.

Now, the question in Australia is who should hear the application for leave to appeal: a single judge or the Full Court.  Heerey J has directed that the matter go before a Full Court and, subject to any directions by the Full Court, be heard concurrently with, or immediately before, the appeal.

His Honour considered that the Byrne interests would suffer substantial prejudice if it turned out that Sundberg J’s decision was wrong:

9 However the US proceeding will deal not only with copyright ownership, but with questions of infringement and damages, issues which do not arise in the Australian proceeding. There will be a significant burden, both financial and otherwise, on the applicant in having to contest that proceeding. Moreover, as Mr Batt for the applicant points out, his client’s Australian proceeding was commenced first, seeking a remedy under Australian legislation arising out of events which allegedly took place in Australia. The opportunity for the applicant to contest, and possibly win, the Australian proceeding, without having to defend the more extensive US proceeding, is something of real value, the loss of which arguably amounts to real injustice, supposing Sundberg J’s decision to be wrong. Apart from anything else, victory in the Australian proceeding may create some issue estoppel in favour of the applicant, or give it leverage in commercial negotiations.

Heerey J did avoid the question of whether the decision was in fact wrong.  It was not the subject of detailed submissions by either party.  In any event, experience taught that the two questions could not often be treated in a vacuum.  Moreover, there was a chance the matter could be dealt with in the November sittings if not before.

TS Production LLC v Drew Pictures Pty Ltd [2008] FCA 1329

Misleading or deceptive conduct?

Lilly has a patent in Australia for “difluro nucleoside antivirals”.  In January 2000, it was granted an extension of term for the patent until March 2009.  In March 2008, Interpharma brought proceedings to have the extension of term revoked.

One of the grounds for Interpharma’s action was that Lilly had engaged in misleading or deceptive conduct contrary to the Trade Practices Act 1974 to secure the extension of term.  (For those interested in the technicalities, the application for an extension was said to claim that the substance claimed in claims 1 to 4 of the patent was a substance listed on the Australian Register of Therapeutic Goods – see Patents Act s 70.)

Sundberg J granted summary judge against this claim on the grounds that, even if it were misleading or deceptive, Lilly’s application to and communications with the Commissioner were not conduct in “trade or commerce”.  Lilly was of course engaging in trade and commerce, but what needed to be shown was that the representations were made in the course of a trading or commercial relationship between Lilly and the Commissioner.

Lilly also obtained summary judgment against Interpharma’s remaining claims on the basis of Interpharma’s delay.

The extension was granted in 2000 and by s 75 (and the regulations) anyone wishing to challenge must file an opposition within 3 months.

Interpharma did not come into existence until 2 years after the extension of term was granted. Sundberg J was particularly critical of Interpharma’s delay after it became aware of the extension of term – a period of 7 months including 5 months after obtaining the complete file from the Commissioner and the institution of proceedings.  However, his Honour’s reasoning would appear to be much broader:

40 I agree with Lilly that once the opposition period has expired and an extension is granted, the patentee and third parties are prima facie entitled to proceed on the basis of the extension. Admittedly, one must take into account that the applicant was not incorporated until nearly two years after the extension. Nevertheless, the public interest to which I have referred is relevant notwithstanding that. As a matter of fairness in the administration of the patent system, it would be extraordinary if extensions could be challenged some eight years after grant. Even taking into account the applicant’s date of incorporation, it would still be extraordinary that a challenge could be made six years after that.

The case is Interpharma Pty Ltd v Commissioner of Patents [2008] FCA 1283.

Australian on top

On 22 September, Dr Francis Gurry’s election as the next Director General of WIPO was unanimously confirmed by the General Assembly.  His term starts on 1 October.  His appointment runs until 2014.

WIPO Press Release here.  Dr Gurry’s acceptance speech and his plans here.

Congratulations, Dr Gurry!

Brazil apparently took the opportunity to point out that one of the challenges lying ahead is centralising control over enforcement issues.  For this and a summary of events see William New at Intellectual Property Watch.

ACTA-phobes

The “gang” secretly negotiating ACTA (the Anti-Counterfeitng Treaty) is starting to attract increasingly organised opposition:

*  “100 groups” (ranging from the EFF in the USA to the Australian National University to …) have signed a “letter” challenging much of what is (assumed) to be going on behind closed doors

* China, supported by Brazil and India, amongst others, has launched a campaign to force ACTA back into WIPO

Of course, one might speculate that the developing countries or the “South” (in a non-US civil war sense) might feel they have better voting prospects in WIPO than, say, a treaty which is being negotiated without them by, apparently,  Australia, Canada, European Union, Japan, Jordan, Korea, Mexico, Morocco, New Zealand, Singapore, Switzerland, United States, and the United Arab Emirates.  Then again, one might wonder if that will dissuade the gang of 13 (if one may count the EU as “one”) from rushing headlong onwards?

University of WA v Gray (No. 24)

What do you do if you have an appeal on foot, but the other side starts selling off the subject matter of the dispute?

Now that French J has gone on to loftier planes, Siopis J has inherited this behemmoth.

In the principal proceedings, the University had sued Dr Gray claiming (in very broad terms) that he had invented some very successful the micro sphere technologies while an employee with the consequence that he held the rights to the technologies on trust for the University.  Dr Gray, however, had sold the IP to Sirtex in which, after its public listing, he became the owner of a large parcel of shares.

Dr Gray and Sirtex had given undertakings not to deal with the IP or the shares pending trial of the matter.

The action failed, but the University has appealed and the appeal is due to be heard in November.  

The undertakings also lapsed when French J gave his judgment.  Dr Gray and Sirtex refused to continue the undertakings pending the appeal.  Despite diligent monitoring by the University’s solicitors, Dr Gray sold both his shares in Sirtex to another company, ACN, of which he was the sole shareholder and director.

The University did two things.  First, it sought interlocutory injunctions against Dr Gray and ACN to restrain dealing in the shares in ACN and the proceeds of the sale of the shares to ACN.  Secondly, it sought to amend the application in the original proceeding to add ACN as a party and bring new claims against it – remember, judgment has already been given and there is an appeal on foot.

While Siopis J acknowledged there were cases where originating documents and pleadings could be amended, even after judgment, this was not one.

13 In my view, O 13 is not to be construed as permitting the amendment of the originating application or pleadings to plead causes of action based on facts and matters which occurred after the date of the judgment. A construction of the Rules which would permit amendment in those circumstances would be inconsistent with the finality principle and the principle that an appeal in this Court is by way of a rehearing directed at correcting error. (See Branir Pty Ltd v Owston Nominees (No 2) Pty Ltd (2001) 117 FCR 424 at 432-440.) The policy considerations militating against the University’s contention are expressed in the following observations of Gibbs CJ, Wilson, Brennan and Dawson JJ in Coulton v Holcombe (1986) 162 CLR 1 at 7:

It is fundamental to the due administration of justice that the substantial issues between the parties are ordinarily settled at trial. If it were not so the main arena for settlement of disputes would move from the court of first instance to the appellate court, tending to reduce the proceedings in the former court to little more than a preliminary skirmish.

So, the amendment application was refused.  However, the interlocutory injunction was granted and the University ordered to commence a separate proceeding against Dr Gray and ACN within 7 days.

University of Western Australia v Gray (No 24) [2008] FCA 1400

Patents List procedures

The Victorian Bar’s website has posted the Victorian Registry’s new Notice on Patents List procedures:

Notice to Practitioners and Litigants issued by the Victorian District Registrar –  Proceedings under the Patents Act 1990 (Cth) dated 2 September 2008.

They don’t seem to be up on the Federal Court’s site yet.

Australian Innovation Review

The Government has released the Report On The Review Of The National Innovation System. 

You can download copies of the Report, an Overview, the 3 different press releases, the Minister’s introductory remarks and the Minister’s speech from here.  I wonder if the prospects of implementation are increased or decreased by the quantity of media assistance?

As the Report points out, “we have known for several generations that innovation pre-eminently determines our prosperity.”

And yet:

as a share of Gross Domestic Product (GDP), Australian Government support for science and innovation, has fallen by nearly a quarter. Also the number of researchers per 1,000 employees has declined substantially in the last decade, and US patents granted per 1,000 population have plunged from 0.06 to 0.01 (1999–2003). And yet during this time, the public revenue was fed by a torrent of cash from the mineral boom. 

There are 201 pages, plus 7 annexes.  There are 15 pages of recommendations.

Interestingly, there is also a software analysis of the main themes identified in submissions and, very usefully, the Departmental summary of the submissions.

Comments can be submitted to the Ministry until (at least) 23 September 2008.  Well, it is almost 2 weeks!

Stupefy!

in which the spell has landed ….

Harry Potter’s creator, JK Rowling, and her movie producers have successfully obtained an injunction against the publication of The Harry Potter Lexicon.  The judge also awarded US$6,750.

Marty has the text of Warner Bros Entertainment Inc. v RDR Books (SDNY 8 Sept 2008) here.

IPKat has a short summary based on media reports here.

NY Times report (free subscription required) here.

It’s not clear yet if there will be an appeal.

Wonder how it would play out here?  Of course, without looking at the book and seeing just how extensively the takings were, any comments would be worse than idle speculation.  We do have Full Court authority that taking lots of little snippets can constitute a substantial part but that, of course, is under appeal.

Security over a business name

A restaurant granted a bank, Westpac, security over its assets.  When the business went sour and the bank came to enforce the security, it found the registration of the business name, Melba’s on the Park, had been transferred to someone else and another company incorporated under the name too.  Apparently, the ability to sell the restaurant business with its name would add significant value.

What to do?

Somehow, the bank has persuaded the Supreme Court of Queensland to grant declarations and injunctions transferring the names back to Westpac.

Mark Davison explores the judgment and how it should have worked here.

I guess if you were taking security over something as risky as goodwill, it certainly wouldn’t hurt to try and tie down the business name registrations etc.  In the good old (monochrome) days, people giving licences or lending on security in such situations used to get signed Cessation/Transfer of Business Name forms and shareholders’ resolutions to change the corporate name.  That led to powers of attorney and stamp duty issues.  And, of course, wouldn’t have worked here once the business name was in someone else’s name!

Case is Westpac Banking Corporation v. McMillan & Melbas On The Park Pty Ltd (formerly Credit Systems Australia Pty Ltd) [2008] QSC 2006

Madrid system and ‘foreign’ trade marks in the USA

So, you’re not a USA-based trade mark owner and you’ve got your “trademark” registered in the US through the Madrid system.  That means you don’t have to worry about all those annoying requirements actually to use the trade mark there, doesn’t it?

Well, no.

Saunders & Silverstein  lay out all the pitfalls that you are going to have to hurdle here.

Lid dip to the Kat with the plummy accent.

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