Posts Tagged ‘Internet’

The power of a registered trade mark

Monday, August 19th, 2013

If you have tried to buy, sell or rent property in Australia in the last 10 years (at the least!), like some nearly 7 million other Australians you have no doubt come across realestate.com.au, the web-portal run by REA Group. Real One also competes in that space.[1]

Bromberg J has held that Real One’s logos:

Real One 2nd logo

Real One 2nd logo

Real One 1st logo

Real One 1st logo

did not “pass off”[2] REA Group’s logos:

559.1

Nor did they infringe REA Group’s registered trade mark: [3]

TM No 1478263

TM No 1478263

However, the use of Real One’s URL in ads like this:

Real One Ad

Real One Ad

did infringe the registered trade mark! [4]

Bromberg J held that the uses both in the first line and the second line of the advertisment infringed. In contrast to his Honour’s rejection of the claim for misleading or deceptive conduct, Bromberg J explained at [241]:

In my view, the display of the term “realestate1.com.au” in the heading of a sponsored link would have been regarded by many consumers to be the trading and domain name of the business whose link it was. One of the central distinguishing features of REA’s realestate.com.au trade marks is the idea that the term “realestate.com.au” is both a brand name and a domain name at the same time. When Real Estate 1 used “realestate1.com.au” as a trading name, it took up that precise idea. In that context consumers are likely to pay substantive attention to “.com.au” because it serves the function of identifying the brand whose domain name is also being used as a brand. The whole of the domain name is likely to be read or at least scanned. In a circumstance such as that, there was in my view, a real danger of confusion on the part of a consumer familiar with REA’s realestate.com.au trade marks. That principally arises because in a scanning process of the kind which can occur on a search results page, the “1”, which is not very distinct in the context of a domain name in ordinary type face, is likely to be missed by some consumers.

First, his Honour distinguished Perram J’s proposition in the Solahart case that usually one can ignore the inclusion in a sign of elements like “www” and “.com.au” as merely “accoutrements” of the domain name system and so not matters that the public would pay attention to. Unlike the situation before Bromberg J, however, that observation was not made in a context where the .com.au element formed part of the registered trade mark.[5]

Second, I can certainly see that the bold “headline” (the first line) in Real One’s advertisment is plainly being used as a trade mark. But the use in the second line???

Yes, I know that cases have held that domain names / URLs are the Internet’s equivalent of a sign or billboard. That can certainly be true and, in the first line of the advertisement, the URL is plainly being used in that way, but surely with respect in the second line the URL is no more than an address.

Third, one might express some alarm that anyone can stop someone else using the term “real estate” (in connection with real estate services). There are, after all only 387 other registered trade marks in class 36 alone which include the words “real estate”. On the Internet, there is also at the least realestateview.com.au. Bromberg J’s first answer in [241] above is that it was not just the use of “real estate” that gave rise to liability: it was the use of that term and “.com.au” in combination and the comparative insignificance of the “1” in Real One’s URL.

Bromberg J did, however, recognise the problem and said at [247]:

As my conclusions demonstrate, registration of REA’s realestate.com.au marks has effectively given REA a monopoly over two highly descriptive terms when used in combination. Those terms are likely to be the most common terms on a search results page where a search has been conducted for a residential real estate portal. The protection conferred by REA’s trade marks over the use of “realestate” and “.com.au” in combination, provides REA with a monopoly over the term “realestate” in circumstances where its rivals seeking also to use “realestate” or a close variant thereof as a second-level domain, do not forego the advantages of using “.com.au” in their domain names. The natural advantage of a domain name which incorporates “realestate” to the commercial success of property portals will be apparent from observations I have already made. There is also a natural advantage in the use of the suffix “.com.au”. It is troubling that terms that are highly descriptive of a particular area of commerce and which provide significant commercial advantage should not be readily available for use by all who seek to participate in that commerce. However, in the absence of a successful challenge to the registration of REA’s realestate.com.au trade marks, whilst that may be troubling, REA is nevertheless entitled to the protection of the monopoly which has been conferred upon it.

The question has to be asked, however, on what basis could REA group’s logo be revoked or refused registration? Given the device elements (and the large number of other, competing devices), it would surely be held to be capable of distinguishing. The “good” old days (i.e., before the 1995 Act) were at least better in this respect: the Registrar could impose disclaimers to ensure these sorts of monopolies should not arise.

Two short points in conclusion:

His Honour did also find that Real One’s “real commercial” logo infringed REA group’s registration for its “real commercial” logo.

It would seem that Real One is still able to operate from its “.net.au” URL.

REA Group Ltd v Real Estate 1 Ltd [2013] FCA 559


  1. Bromberg J found at [258] that the principal of Real One adopted the name to pressure REA group into buying him out at some point, but also went on reluctantly to find no accessorial liability (akin to authorising).  ?
  2. For simplicity, I will treat that term as covering the actions for misleading or deceptive conduct (now under s 18 of the ACL formerly known as s 52 of the Trade Practice Act 1974) which, of course, was really the focus of that part of the case.  ?
  3. The number doesn’t seem to be identified, but TM Nos 811931 and 1075935 are for the mark in black and white and TM No. 1478263 is for the colour version reproduced in his Honour’s reasons.  ?
  4. Also contrast this result with the Thredbo Resort’s failure to stop ThredboNet using Thredbo in domain names to market rental accommodation at Thredbo village: Kosciuszko Thredbo Pty Limited v ThredboNet Marketing Pty Limited [2013] FCA 563 – Thredbo Resort having only pending opposed applications.  ?
  5. Decision under the UDRP have reached similar positions.  ?
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Keywords – Marks & Spencer infringes INTERFLORA TM

Monday, July 15th, 2013

Marks & Spencer has been found to have infringed Interflora’s trade mark in the UK by ‘buying’ ads triggered by Google searches for the keyword INTERFLORA.

An example of the ads Arnold J found infringing:

Keyword search results

CLICK to enlarge

In Google France, the CJEU established that an advertiser would infringe a registered trade mark when its ads were triggered by a trade mark as a keyword where: [1]

“82 The essential function of a trade mark is to guarantee the identity of the origin of the marked goods or service to the consumer or end user by enabling him to distinguish the goods or service from others which have another origin (see, to that effect, Case C–39/97 Canon [1998] ECR I–5507, paragraph 28, and Case C–120/04 Medion [2005] ECR I–8551, paragraph 23).

83 The question whether that function of the trade mark is adversely affected when internet users are shown, on the basis of a keyword identical with a mark, a third party’s ad, such as that of a competitor of the proprietor of that mark, depends in particular on the manner in which that ad is presented.

84 The function of indicating the origin of the mark is adversely affected if the ad does not enable normally informed and reasonably attentive internet users, or enables them only with difficulty, to ascertain whether the goods or services referred to by the ad originate from the proprietor of the trade mark or an undertaking economically connected to it or, on the contrary, originate from a third party (see, to that effect, Céline, paragraph 27 and the case-law cited).

85 In such a situation, which is, moreover, characterised by the fact that the ad in question appears immediately after entry of the trade mark as a search term by the internet user concerned and is displayed at a point when the trade mark is, in its capacity as a search term, also displayed on the screen, the internet user may err as to the origin of the goods or services in question. In those circumstances, the use by the third party of the sign identical with the mark as a keyword triggering the display of that ad is liable to create the impression that there is a material link in the course of trade between the goods or services in question and the proprietor of the trade mark (see, by way of analogy, Arsenal Football Club, paragraph 56, and Case C–245/02 Anheuser-Busch [2004] ECR I–10989, paragraph 60).

Arnold J found on the evidence that a significant section of the public were confused and so Marks & Spencer infringed.

It is not possible to do justice in a blog post to the full range of reasons[2] contributing to his Lordship’s conclusion. Some that stand out follow.

Arnold J accepted (at [316]) that the majority of UK internet users appreciated the difference between paid ads and natural or organic search results, but there was still a significant proportion of internet users in the UK who did not. His Lordship also accepted that “nowadays” the majority of consumers appreciate .

nowadays the majority of consumers appreciate [they are being presented with ads by competitors to the brand they had searched for]. But I consider that a significant proportion do not. (emphasis supplied)

Secondly, the nature of the INTERFLORA brand appears to have been crucial. As you will no doubt be familiar, INTERFLORA is a network. It operates through a network of agents who are usually (always?) branded under their own names and trade marks. Those customers who were not buying online from “interflora.co.uk” or “interflora.com”, for example, would typically go into a retail outlet operating under its own name (and which may display the INTERFLORA name and logo).

The significance of this (at [297] and [299]) was that there was great potential for those customers who realised they were dealing with Marks & Spencer when they clicked on the ad mistakenly to think it was part of the INTERFLORA network.

That potential was in fact borne out by the evidence. In particular, there was evidence from “Hitwise data” that people who (1) searched on the keyword INTERFLORA and (2) as a result clicked on a Marks & Spencer ad generated in response to the search (3) were between 44 and 106 times more likely than the average visitor to the M & S flowers site to leave the M & S site without purchasing and instead go on to an INTERFLORA site.

At [304] – [306], his Lordship accepted the propositions that:

a significant number of consumers in Segment A decided after they had clicked through to the M & S website that it was not where they wanted to be and went to the Interflora website instead. The second is that the reason for this change of mind was that those consumers had clicked through from the M & S advertisement because they assumed from the appearance of the advertisement in response to their search that M & S was part of the Interflora network, but they realised that that was not the case when they clicked through to the M & S website and saw no reference to Interflora.

and such “initial interest” confusion was itself enough for trade mark infringement.

Thus, while Google doesn’t infringe by ‘selling’ keywords, the advertiser may and, in this case on Arnold J’s findings, did.

What, if anything, does it mean for us?

First off, the judgment is full of fascinating details about the “AdWords” and “search” market and the strategies that businesses deploy. For example, it appears that Google held around 90% of the global search (and paid advertising relating to search) market, with Bing and Yahoo! trailing out of site. There are also discussions of market research reports and Ofcom studies into what consumers understand when using the internet.

It is not clear whether Arnold J’s reasoning will provide us with much assistance here. First, while EU law does not appear to require use as a trade mark to infringe, the origin function referenced by the CJEU in Google France appears similar to our concept of use as a trade mark – as a badge of origin or to identify the trade source.[3]

Secondly, it seems doubtful that the considerations identified in [84] of Google France would be relevant at all under our law. The idea of examining whether the “normally informed and reasonably attentive internet users” could ascertain the trade source from the ad, or do so “only with difficulty”, indicates that the content of the advertisment may make it clear that the trade mark owner is not the source of the advertised product. However, a registered trade mark is infringed in Australia even if the trade source is made clear, for example by a disclaimer or other identifying factor. The type of analysis being engaged in under EU law is rather more like what would take place in a passing off action or action for misleading or deceptive conduct.[4]

Thirdly, our law does recognise the idea of “initial interest confusion”,[5] but the number of people who apparently went to M & S’ website and “clicked away” does rather highlight the difficulties with the concept as applied to web searches: clicking the back button, or even doing another web search in the browser, is not so costly as walking out of the shop, hopping back in your car and going looking for the intended destination.

Arguably, the most significant point could be the starting point identified at [288] – the Court of Justice’s recognition that:

keyword advertising is not inherently or inevitably objectionable from a trade mark perspective. On the contrary, the case law of the CJEU in this field recognises that, as a general rule, keyword advertising promotes competition ….

On this view, it was only the very special nature of INTERFLORA as a ‘network’ that convicted Marks & Spencer.

Interflora Inc v Marks and Spencer plc [2013] EWHC 1291 (Ch)


  1. See also [226] – [267] (esp.) of Arnold J’s judgment  ?
  2. Embracing some 318 paragraphs! His Lordship does start drawing the threads together at [295].  ?
  3. See *e.g. Optical 88 (No 2)* at [212].  ?
  4. See *e.g. Optical 88 (No 2)* at [99] and Crazy Ron’s at [86] – [88].  ?
  5. For example Southern Cross v Toowoomba at [5] but, at least in the context of misleading or deceptive conduct / passing off (yes, I know this is a post about registered trade marks) some brake may be imposed on that in at least some cases.  ?
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The Canadian copyright ‘pentalogy’

Monday, May 6th, 2013

Last year, the Supreme Court of Canada handed down 5 decisions on the same day relating to fair dealing and other issues arising from digital transmission of copyright material.

In a number of respects, its decisions are directly opposite to conclusions that have been reached by our High Court (one example – but it appeared to turn on different statutory language). In others, such as the ‘digital taxi’ theory, the issue may well be regarded as still highly controversial here.

Anyway, a number of Canadian experts have published  a book looking at the ramifications of these wide ranging decisions.

In an interesting experiment, you can buy it in the traditional way through the publisher or you may also download an ebook version for free. For more details, see the 1709 blog post.

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Simulcasting radio broadcasts over the internet

Wednesday, February 15th, 2012

Foster J has ruled that radio stations do not have to pay an additional licence fee to the record companies for simultaneously transmitting their radio broadcasts over the internet.

If you want to understand how recorded music is licensed to the radio stations, this is a good place to start.

The broadcasting of recorded music over the “airways” by the commercial radio stations is covered by licence agreements with PPCA. When the radio stations broadcast recorded music as part of a “program”, the audio stream is split between the FM and DAB+ radio bands and a webcast service; that is, the audio stream is sent to 3 different distribution means.

In deciding what is comprehended within the broadcast right under the Copyright Act (see ss 85(1) and 10(1)), it is necessary to determine what is included in a “broadcast service” under the Broadcasting Services Act. The relevant Ministerial Determination under this legislation excluded from the definition of “broadcasting service”:

.. [any] service that makes available television programs or radio programs using the Internet

but then excepted from that:

… [any] service that delivers television programs or radio programs using the broadcast services bands.

Foster J considered this definition required him to focus on what was “the service” and not just the means of transmission:

130 The service which transmits the very same radio programs at essentially the same time both to the FM transmitters and beyond and to the web stream servers and beyond is the one service. On the facts before me, the members of CRA who stream their radio programs on the Internet do so only as part of a program package which also simultaneously transmits those programs via frequency modulated radio waves to the consumer’s FM receiver. In truth, the service is but one service being a service which combines various delivery methods or platforms and which delivers the same radio program using the broadcasting services band. It falls within the exception to the exclusion set out in the Ministerial Determination.

131 Therefore, in my view, the service provided by the members of CRA is a broadcasting service.

132 That being so, the simulcast transmission of the same radio program via the FM waves and the Internet is also a “broadcast” within the current definition of that term in s 10(1) of the Copyright Act and, for that reason, is within the scope of the licence which PPCA agreed to grant to the members of CRA and which it did grant from time to time to members of CRA upon the terms and conditions set out in the Member Agreement.

Phonographic Performance Company of Australia Ltd v Commercial Radio Australia Limited [2012] FCA 93

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Extraditing (alleged) copyright criminals

Wednesday, January 18th, 2012

The internet is all a twitter over the prospect that a 23 year old British subject, Richard O’Dwyer, may be extradited from the UK to the USA to face criminal charges for copyright infringement.

Well guess what, it has happened before albeit from this far away destination.

Mr Griffiths has apparently served his time (in both Australia and the USA) and had this to say to an enterprising journalist.

Lid dip: Graham Dent for the boing boing link!

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ISPs and filtering

Tuesday, December 6th, 2011

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

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

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

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

–        which applies indiscriminately to all its customers;

–        as a preventive measure;

–        exclusively at its expense; and

–        for an unlimited period,

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

 

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What happens on the Internet in 60 secs

Monday, June 20th, 2011

70+ domain names registered

13,000+ iPhone apps downloaded

600+ new videos uploaded to YouTube …

See the Infographic

via Peter Black

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Lessig at e-G8 or Le civilised Internet vs gales of creative destruction

Thursday, June 2nd, 2011

While we’re having our dark mutterings about what might be in a “Convergence Review“, the Leaders of the Free World (or at least the Western Hemisphere) meeting at Deauville have declared:

5. We discussed new issues such as the Internet which are essential to our societies, economies and growth. For citizens, the Internet is a unique information and education tool, and thus helps to promote freedom, democracy and human rights. The Internet facilitates new forms of business and promotes efficiency, competitiveness, and economic growth. Governments, the private sector, users, and other stakeholders all have a role to play in creating an environment in which the Internet can flourish in a balanced manner. In Deauville in 2011, for the first time at Leaders’ level, we agreed, in the presence of some leaders of the Internet economy, on a number of key principles, including freedom, respect for privacy and intellectual property, multi-stakeholder governance, cyber-security, and protection from crime, that underpin a strong and flourishing Internet. The “e-G8″ event held in Paris on 24 and 25 May was a useful contribution to these debates.

[Slight digression: "new" issues? plus ça change?]

The real fun, however, was at the “e-G8″.

President Sarkozy, who was convening the meeting of the Leaders, had brought together all sorts of likely people

[such as Eric Schmidt, Mark Zuckerberg, Jeff Jarvis and Prof. Lessig]

and issued a clarion call for Le Civilised Internet.

It all started very well with M. le president declaiming:

You have changed the world. For me, you have changed the world, just as Columbus and Galileo did. You have changed the world, just as Newton and Edison did. You have changed the world with the imagination of inventors and the boldness of entrepreneurs.

However:

Also the States we represent need to make it known that the world you represent is not a parallel universe, free of legal and moral rules and more generally all the basis principles that govern society in democratic countries. Now that the Internet is an integral part of most people’s lives, it would be contradictory to exclude governments from this huge forum. Nobody could nor should forget that these governments are the only legitimate representatives of the will of the people in our democracies. To forget this is to run the risk of democratic chaos and hence anarchy. To forget this would be to confuse populism with democracy of opinion. Juxtaposed individual wishes have never constituted the will of the people. A social contract cannot be drawn up by simply lumping together individual aspirations.

and

Do not allow the revolution you began to violate people’s fundamental right to privacy and to be fully autonomous. Complete transparency, which never allows a person to rest, will sooner or later come up against the very principle of individual freedom.

Let us not forget that behind an anonymous Internet user, there is a real citizen who is evolving in a society, a culture and an organized nation to which he belongs and with laws he must abide by.

Do not forget that the sincerity of your promise will be assessed in the commitment of your companies to contribute fairly to national ecosystems.

Do not allow the revolution you began to violate the basic right of children to lives that are protected from the moral turpitude of certain adults.

Do not allow the revolution you began to be a vehicle for maliciousness, unobstructed and unrestricted. Do not allow this revolution become an instrument in the hands of those who wish to jeopardize our security and in doing so, our freedom and our integrity.

You have allowed everyone, with the mere magic of the Web, to access all the cultural treasures of the world in a simple click. It would be something of a paradox if the Web contributed to draining them over time.

The immense cultural wealth that provides our civilizations with such beauty is a product of the creative forces of our artists, authors and thinkers. Basically, it is the product of all those who work on enchanting the world.

Yet these creative forces are fragile because when creative minds are deprived of the fruit of their talents, they are not just ruined, what’s worse, they lose their independence, they will be required to pawn their freedom.

Unfortunately, this didn’t meet with such a good press (at least in those parts of the (western) world that Napoleon didn’t conquer). For some of the adverse press: herehereherehere. Maybe, the President said something more specific in unscripted comments as the press and Prof. Lessig all react to suggestions that the rest of the world should be introducing the 3-strikes regime of the loi hadopi (France and France again and NZ) and, in another reverberation DownUnder, the rights of governments to censor what their citizens read or do on the internet.

Prof. Lessig was willing to concede that (for intellectual property rights) the question is not whether there should be copyright protection – “No-one serious denies this” - the question is how copyright should be protected in the age of the Internet. On this question, he sharply disagreed with M. le president. The President’s solutions were answers provided by incumbents. And such answers, Prof. Lessig says, should be treated with (too put it mildly) skepticism:

From the Hargreaves Report (UK)

Instead, Prof. Lessig pointed out, the future of the Internet is not:

  • Twitter
  • Facebook
  • Google
  • (he hopes) Rupert Murdoch,

the future of the Internet is not here (yet). We need to be careful lest the rules we put in place today (at the behest of incumbents) foreclose the emergence of new developments or lose sight of reality.

Now, of course, Prof. Lessig is engaging in polemical advocacy (just as Pres. Sarkozy was), but the point he raises is important and it is important that “we” get it right. One must accept that the State can lay down rules for its citizens’ use of the internet, just as it can lay down rules for all other aspects of its citizens’ lives. Apparently, this even applies in the USA, but in the UK may be not or may be. The question is: what rules (if any) should it lay down and whose views should it be listening to?

You can watch Prof. Lessig’s speech (which I recommend you do just long enough to admire the space age Stage that proves we really are living in the future) then switch over to the slideshow for the lesson (do persevere past section 1, the alcoholic(s)).

The link to the official (English translation of) the text of President Sarkozy’s speech.

For Hargreaves and some reaction.

The G8′s 2011 communique.

If you still need more on ‘creative destruction’ after watching Prof. Lessig, start here.

Lid dip: Peter Black at Freedom to Differ.

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Affinage and A.S.P. 2

Friday, May 27th, 2011

For completeness, I should note that IHC UK has appealed Logan J’s decision earlier this month finding that it infringed IHC Australia’s registered trade mark for AFFINAGE. Summary here.

Interestingly, Logan J has granted a stay of his order to remove all references to A.S.P. from IHC UK’s Web site at www.affinage.com.

You will recall that IHC UK owns AFFINAGE outside Australia and had adopted A.S.P. at least partly to deal with the fact that it could no longer use “its” trade mark in Australia.

Logan J appears to have considered a stay pending the outcome of the appeal was in order as IHC UK:

  1. Had removed all references to Australia (including the drop down country box) from its web site at www.affinage.com;
  2. IHC UK was having some sort of global re-launch of A.S. P. in the UK soon, involving 150 or so distributors from around the world;
  3. His Honour accepted that the decision that the modified Web site infringed had been a “difficult one”; and
  4. IHC Australia had not sought damages and it was difficult to identify what damages might flow from the stay.

His Honour did not think that he needed to order a stay of 7 days of his orders relating to the removal of references to Australia from www.affinage.com. That stay had been sought out of an abundance of caution and IHC UK was generally trying to comply with the orders so it appeared a breach, if any, would have been inadvertent.

International Hair Cosmetics Group Pty Ltd v International Hair Cosmetics Limited (No 2) [2011] FCA 540

For the orders under appeal, see International Hair Cosmetics Group Pty Ltd v International Hair Cosmetics Limited [2011] FCA 339

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Using a sign on the internet

Friday, April 15th, 2011

Logan J has granted injunctions against International Hair Care UK’s  use of AFFINAGE (and other trade marks) on its global website for (in effect) infringing International Hair Care Australia’s trade marks registered in Australia. The facts throw up the interesting question of what happens when 2 different people own the same trade mark in different countries and try to use it on the internet.

Facts

IHC UK is the owner of the registered trade mark AFFINAGE for hair care products in the UK and 20 other countries throughout the world, but not Australia.

In 1992, Mr Barry, the principal of IHC UK, set up IHC Australia with Mr Jolly. At that time, Mr Barry owned a majority of the shares.

IHC Australia applied for and registered AFFINAGE under the Australian trade marks act for hair care products.

In 2002, Mr Barry sold his then remaining shareholding in IHC Australia to Mr Jolly (and his wife) for $480,000. IHC Australia kept its registered trade marks and, under the terms of the sale, the parties divided up the global rights between themselves. IHC Australia got the rights to AFFINAGE in China, South-East Asia, Australia, New Zealand and the South-West and Western Pacific to the International Date Line; IHC UK had the rights to the rest of the world.

Sometime after this, Mr Barry or IHC UK incorporated a new Australian company, Affinage Salon Professional Pty Ltd, to sell hair care products under the brands A.S.P. and KITOKO.

In August 2010, the parties started legal action in Australia against each other. That litigation was compromised by a deed of settlement the terms of which, amongst other things, included Affinage Salon Professional agreeing to change its name so that it did not include AFFINAGE and IHC UK and its subsidiary undertaking:

not to use AFFINAGE … as a sign in connection with the importation, marketing, sale or manufacture in Australia of hair care products including hair colours and dyes.

In January this year, IHC Australia’s solicitor did a Google search and went to the link for IHC UK’s website at www.affinage.com. At that link, he was presented with a banner AFFINAGE and beneath it in smaller script SALON PROFESSIONAL. There was a “country box” with a drop down list of countries. When he selected “Australia”, he was taken to a page headed “ASP”. Under the “Profile tab” for Australia, there were the following passages:

In 1996 [IHC UK] conceived, created and lunched the premium hair care brand AFFINAGE. Originated as a line of hair colour, the AFFINAGE brand grew rapidly to include [reference to other types of product]… Now we are introducing our exciting new hair care brand, ASP, to the Australian and Asian markets. Having already signed distribution agreements with a number of companies we look forward to fantastic success in 2011.

….

Today our products are sold in over 50 countries – across Europe, Africa, the United States, South America and the Asia Pacific. Our brands are marketed globally by [IHC UK] and through it’s associated companies in the USA and Australia. Global distribution is achieved through a worldwide network of wholesalers and specialist distributors

A map of the world showed markers ASP Australia, ASP USA and identified the UK as Worldwide HQ. If the UK or the USA were chosen, the same information was displayed, but the landing pages were headed AFFINAGE and AFFINAGE, not ASP, was used to mark the countries.

IHC Australia re-commenced proceedings for breach of the undertakings.

Following service of the court documents (no other notice of complaint having been given), IHC UK amended its website.

The landing or home page now looked like:

IHC UK's modified home page

and Australia no longer appeared in the drop down box for countries under AFFINAGE, only under A.S.P.

Findings

Logan J found that the website in both its unmodified and modified form breached the undertaking in the deed of settlement and granted injunctions, amongst other things, requiring the A.S.P. component of IHC UK’s website to be removed from www.affinage.com. In contrast, the Facebook and Twitter links on the home page did not breach the undertakings.

On its true construction, the undertaking required IHC UK not to use AFFINAGE in Australia as a trade mark (at [61]). This required that IHC UK not use AFFINAGE as a trade mark in a way which targeted Australia.

IHC UK’s use targeted Australia

His Honour recognised that IHC UK was perfectly entitled to use its trade mark in, for example, the UK where it was the registered owner. The problem was to reconcile that entitlement and the global nature of the internet with IHC Australia’s territorial rights in Australia.

At [59]:

… the reconciliation to which I have just referred is achieved, in terms of the undertaking given in this case, by an approach that finds a use of the nominated words in connection with “marketing” in Australia if the words as so used are downloaded in Australia and there is evidence that the use was specifically intended to be made in, or directed or targeted at Australia.

Unlike the Ward & Brodie case, that targeting was effected by the country selection box: that was its whole purpose. In the case of the unmodified website (at [60]):

that global web site is, inter alia, directed to or targeted at Australia. That is the whole purpose of the “Australia” option in the drop down box selection offered on the global landing page.

This was also true of the modified website. At [62]:

…. That Australian targeted use on the global landing page controls all that follows when one selects, as did Mr Bennett, the “Australia” option in the drop down box.

It was use as a trade mark

While IHC UK could legitimately say it introduced the brand AFFINAGE into Australia as a matter of historical fact. Its usage of the term went much beyond that.

On the first or unmodified form of the website, the purpose of the profile page or tab in the Australia” section was to persuade people to buy IHC UK’s, “and materially” its Australian distributor’s, products by reference to the AFFINAGE trade mark. At [67], his Honour explained:

When one reads the language of the “Profile” page in context, the repetition of AFFINAGE and the repeated use of “our brands” in conjunction with “worldwide” and “are marketed globally by IHC UK and through its associated companies in the USA and Australia”, the reference to Affinage is not just to a matter of foreign history but part of a current promotion that our goods worldwide, including those offered in Australia, include goods with the AFFINAGE brand. ….

No doubt, part of that context included the fact that one landed on a home page emblazoned with the AFFINAGE banner. But, his Honour, as in the Mantra case, was troubled by the repetitive use of the trade mark and, particularly, the representation that “Our goods “are marketed globally … in the USA and Australia”. His Honour also made the point that nothing on the profile page made it clear that IHC UK no longer held the rights to AFFINAGE in Australia.

The modified version of the website, featuring both the AFFINAGE and A.S.P. trade marks, was much closer to the line. Despite the separation between the 2 marks and the removal of Australia from the drop down box for AFFINAGE, however, Logan J considered it was still using AFFINAGE to target Australia in a trade mark sense. At [70]:

The “setting” for the viewer of this global landing page has undoubtedly changed and changed in a way that seeks to create a discrete Australian “target”. What remains though is a determined endeavour to place AFFINAGE in the mind of the viewer who has an interest in reading further in relation to Australia. The Australian “target” remains on the global landing page as a fixed feature. A connection between the AFFINAGE brand product and the ASP brand, each formulated by IHC UK is promoted and promoted to an Australian viewer. What the global landing page does not say is that IHC UK has no connection with the AFFINAGE brand in Australia. Instead, the overall “setting” is that there is an Affinage world brand in which the Australian province is known as “A.S.P.”. This, in my opinion, remains a use of that sign in Australia in connection with marketing contrary to the terms of the undertaking.

Accordingly, IHC UK was ordered to remove :

  1. Australia from the drop down country box;
  2. the A.S.P. pages from its website
  3. any references to Australia from its website; and
  4. any links between any new A.S.P. website and the AFFINAGE website.

FCR O35 r11(2)

For those interested in procedural matters, Logan J refused to follow the Ucorp ruling and concluded that FCR O35 r11(2) conferred a power only; there was a discretion whether or not to award an injunction once it was shown the terms of the undertaking had been breached.

International Hair Cosmetics Group Pty Ltd v International Hair Cosmetics Limited [2011] FCA 339

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