IP Australia has opened a consultation on the draft Design Law Treaty which will be the subject of a Diplomatic Conference in November.
According to IP Australia’s announcement, most of the text is agreed but the outstanding issues are:
grace periods – namely the periods after public disclosure of the product when you can still seek design registration (Article 6)
whether a procedural treaty should include substantive law (e.g. proposal for term of protection in Article 9bis)
the option for an office to require disclosure when a designer has utilised any traditional knowledge, traditional cultural expressions or biological/genetic resources in the design (Article 3)
whether IP offices should be required to provide an electronic system for design applications (Article 9ter and 9quater)
the assistance WIPO should provide to developing countries (e.g. technical assistance and capacity building for the ratification of the treaty) (Article 22).
Most of these seem unlikely to cause much difficulty for Australia.
The main substantive impact, hiding under the “e.g. proposal for term of protection Article 9bis“, is whether the term of protection should be raised to at least 15 years or Member States can choose to stay at the TRIPS minimum of 10 years. (You will remember six years ago now IP Australia published a cost benefit analysis of Australia raising the term of designs protection from 10 to 15 years.)
A requirement for the disclosure of utilisation of traditional knowledge, traditional cultural expressions or biological/genetic resources would be new – but seems to be the direction policy development is heading in Australia anyway. Of course, a big question will be just what is encompassed by those expressions and the consequences of both disclosure and failure to disclose.
There are also some options about filing requirements such as how many and which representations need to be filed which should be carefully considered if the promises of simplification and efficiency are to be achieved.
IP Australia requires submissions by 22 September 2024. That is a very tight timeframe, no doubt dictated by the fact the Diplomatic Conference is being held in November. As IP Australia has known about all these issues since last November, one might wonder why they are only getting around to consulting now.
O’Bryan J sets out a convenient summary of how the case came to be before him and IPwars has had a few goes including here and here but in case the meaning of “manner of manufacture” for the purposes of the Patents Act 1990 is not tattooed over you heart, a brief recap:
The Commissioner rejected Aristocrat’s innovation patents over an electronic gaming machine (EGM) with a new software-implemented feature game and trigger.
Burley J allowed Aristocrat’s appeal, pointing out it was accepted on all sides that the claims would have been patentable if implemented in the traditional mechanical way rather than software implementation.
The Full Federal Court allowed the Commissioner’s appeal restoring the rejection of the claims. Although agreed in the result, the reasoning was divided. Middleton and Perram JJ held at [26] that it was first necessary to decide if the claimed invention was for a computer or computer-implemented. If so, it was then necessary for the claim to result in an advance in computer technology. In the result (and subject to any appeal to the High Court), after setting aside Burley J’s orders, the Full Federal Court ordered: The proceedings are remitted to the primary judge for determination of any residual issues in light of the Full Court’s reasons including any issues which concern the position of claims other than claim 1 of Innovation Patent No. 2016101967 (referred to at [8] of the reasons of the primary judge dated 5 June 2020) and the costs of the hearings before the primary judge.
The High Court memorably failed to reach a decision, with three judges dismissing the appeal while the other three judges would have allowed Aristocrat’s appeal (a seventh judge was unable to sit). Consequently, under Judiciary Act 1903 s 23(2)(a), the decision of the Full Federal Court was affirmed.
On remitter, Burley J considered he was bound by the Full Federal Court’s decision and ruled that the dependent claims of Aristocrat’s patents were also invalid.
Leave to appeal
As Burley J was hearing and determining an appeal from a decision of the Commissioner, Aristocrat needed leave to appeal to the Full Court under s 158(2).
Often where leave is being sought by the patentee or applicant for the patent rather than an opponent, one might expect leave would be granted as otherwise the patent is dead. As O’Bryan J explained at [50]:
The guidance that emerges from the above cases may be summarised as follows. Section 158(2) evinces a legislative policy against the bringing of appeals against a judgment or order of a single judge of the Federal Court in the exercise of its jurisdiction to hear and determine appeals from decisions or directions of the Commissioner except where the court, acting judicially, finds reason to grant leave. The discretionary power to grant leave is not constrained by express legislative criteria and the Court should not lay down rigid rules that would restrict the exercise of the discretion given the diversity of cases to which s 158(2) will potentially apply. In determining whether to grant leave, it is relevant to consider: whether the decision is attended with sufficient doubt to warrant it being reconsidered on appeal; whether the issues proposed to be raised by the appeal are of general application; and the consequences of a refusal to grant leave – particularly whether the refusal will finally determine the matter. None of those considerations is determinative in and of itself and the considerations are interrelated. The cases make clear that the degree of doubt with respect to the decision that would warrant a grant of leave is affected by the consequences of a refusal to grant leave. In a pre-grant opposition proceeding, where there have been two hearings with the opposition dismissed, and where the opponent of the patent will still be able to institute revocation proceedings, leave to appeal will often be granted only where the opponent has demonstrated a clear prima facie case of error in the decision appealed from. In contrast, where an opponent has been successful such that the decision will be final with respect to the grant of the patent, leave to appeal would ordinarily be granted where the grounds are arguable.
O’Bryan J appears to have had some reservation in granting leave this time around. His Honour described the application as “finely balanced”.
The two main areas that seem to have been particularly troubling were that, as the Commissioner characterised it, the parties had agreed that Burley J’s determination of claim 1 in the first hearing would guide the determination of the other claims. Secondly, the innovation patents in question had expired and Aristocrat still had applications for standard patents covering the same subject matter pending.
Ultimately, his Honour found in favour of granting leave in the “unusual circumstances” of this case.
The factor that appears to have tipped his Honour in favour of granting leave was not just that the High Court had divided 3:3 in its previous decision. O’Bryan J was sceptical that this was just Aristocrat trying to have a “second go”. Rather, the additional factor is how s 23 of the Judiciary Act should apply in circumstances where all six judges of the High Court appear to have rejected the majority view in the Full Federal Court.
At [65], O’Bryan J explained:
Having taken all of the foregoing factors into account, I have determined on balance that leave to appeal should be granted. Ultimately, two factors weigh marginally in favour of the grant of leave: that the effect of the primary judgment is to determine finally that the innovation patents in suit will not be granted, and that the grounds of appeal sought to be raised by Aristocrat are arguable (raising novel questions about the operations of s 23(2)(a) in the unusual circumstances of this case). If Aristocrat is able to persuade an appellate court that the primary judge’s application of s 23(2)(a) of the Judiciary Act in this case was erroneous, Aristocrat should be entitled to have the residual claims adjudicated in accordance with the legal principles that the appellate court determines are applicable.
What happens next
Having been granted leave to appeal, Aristocrat has foreshadowed an application under Judiciary Act s 40 requesting the High Court to hear and determine the appeal without the need for a further hearing in the Full Federal Court. This is of course a very unusual step. In this case, however, the foundational question can really be answered only by the High Court: how does s 23(2)(a) operate when the decision under appeal is affirmed but all the High Court judges sitting on the appeal appear to have rejected the reasoning of the “affirmed” decision?
Who know, we might even get something approaching a settled test for “manner of manufacture” (again).
The attempt by global online sports merchandise retailer, Fanatics LLC, to expand its operations directly into Australia has resulted in the cancellation of its FANATICS registrations in class 35[1] (but not class 42[2]) and findings that it had infringed FanFirm’s competing registrations in class 25[3]. FanFirm’s own registrations in classes 9, 16, 24, 32 and 38, however, were cancelled for non-use.
The case runs through the gamut of issues: ownership, first use, similarity of goods / services, cancellation under s 88, removal for non-use, honest concurrent user, infringement, defences under s 122(1) and ACL / passing off. Rofe J’s judgment runs to 497 paragraphs so I am not going to try to tackle everything. Rather, I want to pick out three or four issues which I found particularly interesting. In particular, when the US-based respondent sought to expand its business in Australia, it was forced (unsuccessfully) to try to read down the scope of FanFirm’s registered trade marks as mere adjuncts to its tour operator business.
You might recall watching a sporting event where there were some raucous crowd members wearing green and gold curly wigs. It turns out the original fanatic, a Mr Livingstone, attended the US Open in 1997 where his “enthusiastic support” earned him an invitation to attend a post match celebration with the winner, Pat Rafter.
Beginning with a Davis Cup match in October 1997, Mr Livingstone parlayed this beginning into a business promoting tours to sporting and, eventually, cultural events and selling merchandise. Those attending the tours often wore merchandise such as “FANATICS”- branded t-shirts and caps. In 2004, Mr Livingstone incorporated the applicant and it took over the business which has continued to grow and expand so that, by the time of the trial, there were some 160,000 members in its customer database.
Meanwhile, in 1995, the respondent started life in the United States as Football Fanatics Inc. It formally became Fanatics Inc only in 2010.
The respondent operates around the world selling licensed sports merchandise such as NBA, NFL, F1 and Premier League products and, since 2018, third party merchandise which it manufactures and brands with its FANATICS Marks.
Before 2010, the respondent’s business was operated through a series of audience-specific brands and websites such as www.footballfanatics.com (1997), www.fastballfanatics.com (2006), www.fastbreakfanatics.com (2007), www.faceofffanatics.com (2007), www.fightingfanatics.com (2008), www.surffanatics.com (2008), www.fanaticsoutlet.com (2008), www.kidfanatics.com (2009) and www.ladyfanatics.com (2009).
In 2009, it acquired the domain name <fanatics.com> which initially redirected to the Football Fanatics website. From 2011, however, it became the respondent’s primary website.
It appears the respondent had been making some sales to customers in Australia from its Football Fanatics website since 2000. The respondent also provided what were described in the judgment as modest sales figures from its www.fanatics.com website to Australians beginning in 2014 through till 2020.
In 2020, the respondent’s Australian operations expanded significantly. It began operating the Essendon Football Club’s online store as “A Fanatics Experience” and began selling its FANATICS branded merchandise nationally through Rebel Sports stores.
The trade marks
FanFirm relied on two trade marks of which, TM 1232983, was for FANATICS in classes 9, 16, 24, 25, 32, 38 and 39 which was registered with effect from its filing date on 2 April 2008. (The respondent had unsuccessfully opposed registration back in 2010.)
The respondent also had two registrations for FANATICS, another for FANATICS and Flag device and registrations for FOOTBALL FANATICS and SPORTS FANATICS. The earliest registrations, for FANATICS and FOOTBALL FANATICS, dated from 10 September 2008. That first FANATICS registration was achieved on the basis of continuous prior use under s 44(4).
The respondent’s Flag device:
Who used first (in Australia) and for what
Rofe J’s first crucial ruling was the determination of who was the first user of FANATICS as a trade mark in Australia – and for what.
Her Honour found that FanFirm had been using FANATICS in relation to goods – the merchandise – from its website at www.thefanatics.com from 2004.
Her Honour also found ([151] and [158]) that FanFirm’s use on its website was use in relation to the class 35 services of on-line retail services of sports related clothing and merchandise, order fulfilment services and product merchandising.
In reliance on the CHIFLEY Hotel case, the respondent contended (at [152]) that FanFirm’s sales from its website were neither use in respect of clothing nor retail sales as they were merely an adjunct to FanFirm’s core business of providing tour and event services.
Rofe J rejected this characterisation. At [153], her Honour pointed out that merchandise could be purchased from FanFirm’s website even if no tour or event booking was made. Thus, there was no necessary relationship between tours and events on one hand and, on the other, the merchandise. Her Honour also noted that Markovic J in the Katy Perry case had found that the sale of merchandise at and in conjunction with Katy Perry’s concerts was use in relation to the goods and retail services. Rofe J explained at [155]:
Markovic J’s findings on this issue were not challenged on appeal and I respectfully agree with her Honour. Using a trade mark on goods does not cease to be “use as a trade mark … in relation to goods” for the purposes of s 120(1) of the Act simply because the sale of the relevant goods is “closely tied” or an adjunct to some service offered by the applicant which is their primary or core business. In any event, I do not consider that the sale of merchandise on the applicant’s website to be merely an adjunct to its main business of providing tour and event services.
and at [158]:
…. The applicant’s website provided an online retail service from at least 2004 because customers could visit the website, select a product and then purchase that product. It therefore also provided order fulfillment services and product merchandising within the meaning of the respondent’s class 35 registration. ….
As FanFirm’s use was before the respondent’s earliest use in Australia in 2010 or 2011 (at [144] – [145]), her Honour’s conclusions ultimately led to orders for the cancellation of the respondent’s registered trade marks in class 35.
This conclusion did not extend to the respondent’s class 42 services – setting up, managing and operating an online store for a third party – as her Honour at [159] found such services were not the same kind of thing as online retail services or the class 25 goods.
The respondent’s use infringed FanFirm’s class 25 registration
Next, Rofe J found that the respondent’s sales of clothing merchandise from its fanatics.com website to Australians infringed FanFirm’s registration in class 25.
Some of the goods sold were the respondent’s own products branded with its Fanatics and/or Fanatics Flag mark. The respondent, however, contested that the sales of third party merchandise (i.e., not branded FANATICS) from its website and some products where FANATICS appeared only on the swing tag (or similar) involved use as a trade mark in relation to goods.
The third party merchandise
FanFirm argued that the sale of NBA, NFL and other third-party clothing manufactured by the likes of Adidas and Nike from the respondent’s website constituted not just use of FANATICS in relation to online retail services in class 35 but also use in relation to the goods themselves.
An example is this webpage:
The respondent argued (at [215]) that this was only use of FANATICS in relation to online retail services just as use of REBEL on REBEL SPORTS stores was use in relation to retail services and not the goods themselves.
Rofe J held, however, that this use constituted use in relation to the clothing goods themselves, not just in relation to retail services. In doing so, her Honour relied on the decisions in Sports Warehouse, [Solarhut][sol], [Flexopack][flex], Edgetec and Bob Jane. At least some of these cases involved the sale from the infringer’s website of goods which were not manufactured by (or for) the infringer. Accordingly, her Honour concluded at [220]:
The respondent invites consumers to visit its website at www.fanatics.com. At that website, goods are available for purchase under the name FANATICS as part of the domain name, displayed in page headings and in references to products. I consider that this constitutes use of the FANATICS Marks as trade marks in relation to the goods for which the applicant’s FanFirm Marks are registered, including clothing, sportswear and headgear.
The swing tag use
From 2020, the respondent was offering for sale from sites such as “www.aflstore.com.au” and “www.rebelsport.com.au” shirts and other apparel for 11 AFL teams and also some of its own branded clothing. At least some of the AFL clothing did not bear FANATICS on the labelling or otherwise. The “only” use of FANATICS was on the swing tag:
In addition to the swing tag, the FAQ also stated:
15.1 “When you make a purchase, you are purchasing from rebel. The order is simply being sent from a Fanatics warehouse.”
15.2 “Products shipped by Fanatics will only be available online and will be shipped direct from a Fanatics distribution centre to customers. Rebel does not hold these products in Australia.”
15.3 “Click and Collect is not available for products shipped by Fanatics as they are not stocked in our stores. They will be available for delivery only”
Further, there were other goods on which the respondent’s trade mark had been embroidered or printed on the label (albeit a small proportion of the total).
As with the third party merchandise from the respondent’s own website, the respondent argued this use on the swing tag was only use in relation to retail services, not the goods themselves. Rofe J also rejected this argument in the context of this case.
Given that s 7 defines use as use upon or in physical or other relation to the goods, the fact that the use was on the swing tag and not on the goods themselves was hardly determinative.
At [198], Rofe J considered:
It would be apparent to any reasonable Australian consumer that the Hawthorn Football Club (or any sporting club) does not manufacture clothing, and that the Hawthorn indicia are part of the design of the shirt material. The use of the FANATICS Marks in these instances are being used as “a badge of origin” to distinguish the respondent’s relevant good from goods manufactured by other sports clothing manufacturers such as Nike or Adidas: E & J Gallo Winery v Lion Nathan Australia Pty Ltd (2010) 241 CLR 144 at [41]–[42] (per French CJ, Gummow, Crennan and Bell JJ).
In any event, her Honour pointed at at [200]:
In this case, the FANATICS Marks on the FANATICS branded goods are being used as a badge of origin and thus the use constitutes trade mark use. The fact that other marks are present on the clothing, such as the logo of the relevant sporting team or league, does not matter. Dual branding is “nothing unusual” and does not have the effect that one of the marks is not being used as a trade mark: see Allergan Australia Pty Ltd v Self Care IP Holdings Pty Ltd (2021) 162 IPR 52 at [66] (per Jagot, Lee and Thawley JJ) and the cases there cited (these comments were not disturbed on appeal in Self Care). See also Anheuser at [189] and [191] (per Allsop J).
Thus, subject to the respondent’s numerous defences, FanFirm’s trade mark for clothing etc. in class 25 was infringed.
Some issues raised by the defences
The respondent raised a number of defences against a finding of infringement – in addition to its unsuccessful attempt to have FanFirm’s trade mark cancelled.
The respondent was exercising a right to use the trade mark given by registration
The respondent’s first line of defence was s 122(1)(e) – the exercise of a right to use a trade mark given to the user under the Act. That is, someone does not infringe another person’s registered trade mark if the “someone” has registered their own trade mark and is using it within the scope of that registration.
The issue here is that, as the respondent was not the owner of the trade mark for online retail services, its trade mark was not validly registered as a result of the operation of s 88(1)(a) and s 58.
On this issue, while her Honour considered it a “strange result” from a policy perspective, at [313] – [314] Rofe J followed Nicholas J’s ruling in Dunlop and held that cancellation was not retrospective but prospective only. That is, the respondent’s trade marks were not cancelled ab initio but only from the date of her Honour’s order.
While this protected the respondent from awards of damages (or an account) for its past conduct, (at [385]) this did not protect the respondent from an injunction against continued use of the infringing trade marks.
Honest concurrent user
As it had been using its trade marks in Australia since 2010 or 2011, the respondent also argued the Court should find the respondent was entitled to registration (s 122(1)(f) or (fa)) on the basis of honest concurrent user (ss 44(3)).
Ultimately, her Honour rejected this defence, finding that the respondent’s use did not qualify as honest concurrent user.
The problem for the respondent was at least three fold. First, the respondent adopted FANATICS as its corporate name and trade mark with knowledge of FanFirm and its trade mark. Indeed, it had sought to oppose registration of FanFirm’s mark. Rofe J accepted the respondent did not adopt the trade mark to take advantage of FanFirm’s reputation, however, it could not be described as “independent adoption”. Moreover, while two of the respondent’s senior executives involved in the decisions gave evidence, no-one from the respondent gave evidence of any honest belief that confusion would not result. At [331], her Honour concluded:
The adoption of the respondent’s new corporate name and mark occurred with knowledge of the applicant and its mark, and the goods for which registration of that mark was sought. Whilst I do not consider that the respondent adopted the FANATICS Marks in order to divert business or goodwill from the applicant, it cannot be described as “independent adoption”. Further, as I have said above, despite leading evidence from two senior employees of the respondent, the respondent led no evidence as to the existence of any honest belief that there would be no confusion as a result of the respondent adopting the same mark as the applicant’s existing marks. Thus, the two hallmarks of honesty are absent from the respondent’s adoption of the FANATICS Marks.
At [383] – [383], Rofe J relied on similar reasoning to reject the respondent’s contention that her Honour should exercise the discretion arising under s 89not to remove the trade marks.
The injunction issue
In her Honour’s subsequent ruling on costs and non-pecuniary remedies, Rofe J stayed the operation of the order for cancellation of the registered trade marks pending the outcome of the appeal (for which Rofe J gave leave).
Rofe J also ordered an injunction restraining infringing use but refused to stay that order pending the determination of any appeal.
A number of factors led to her Honour refusing the stay.
These included, first, that her Honour was far from convinced that the respondent had the level of reputation in Australia it claimed given the apparently small scale of its sales here.
Secondly, the respondent’s claims of the disruption to its global business seemed overstated in light of the small scale of its Australian sales compared to the global business, its apparent disregard of the Australian market in deciding to adopt FANATICS and FanFirm’s evidence about the availability and utility of geo-blocking services so that the respondent’s sales to the rest of the world would be unaffected.
Further considerations included the dilution of FanFirm’s own goodwill and the difficulties in quantifying that.
Accordingly, Rofe J considered the balance of convenience lay in favour of not staying the injunction.
Bromwich J substantially upheld her Honour’s refusal to order a stay of the injunction but modified it slightly:
to allow the respondent 28 days to implement geo-blocking of Australia; and
to enable continued use in respect of “global customer care labels” in a particular form and to allow the respondent to deal with returns.
Bromwich J, like Rofe J, also referred to a number of other considerations.
Rofe J’s key finding was that FanFirm was the first user of FANATICS in Australia for goods such as clothing and online retail services for such products. Such use was not merely an adjunct to FanFirm’s tour organisation and supply business. As a result, the respondent’s trade marks for those goods and services will be cancelled and it has been enjoined against continued use in Australia. Just because you are clear to operate under your trade mark in one country does not mean you will be able to use it in another, different market.
Class 35: Business marketing consulting services; customer service in the field of retail store services and on-line retail store services; on-line retail store services featuring sports related and sports team branded clothing and merchandise; order fulfillment services; product merchandising; retail store services featuring sports related and sports team branded clothing and merchandise ?
Class 42: Development of new technology for others in the field of retail store services for the purpose of creating and maintaining the look and feel of web sites for others, not in the field of web site hosting; computer services, namely, creating and maintaining the look and feel of web sites for others, not in the field of web site hosting services; computer services, namely designing and implementing the look and feel of web sites for others, not in the field of web site hosting services; computer services, namely, managing the look and feel of web sites for others, not in the field of web site hosting ?
Class 25: Clothing, footwear and headgear, shirts, scarves, ties, socks, sportswear ?
In the 7Now case, the Full Court reminded us that the classic statement of when a sign is used as a trade mark for the purposes of Australian law is the Oil Drop Man case:[1]
With the aid of the definition of ‘trade mark’ in s. 6 of the [1955 Trade Marks] Act, the adverbial expression [‘as a trade mark’] may be expanded so that the question becomes whether, in the setting in which the particular pictures referred to were presented, they would have appeared to the television viewer as possessing the character of devices, or brands, which the appellant was using or proposing to use in relation to petrol for the purpose of indicating, or so as to indicate, a connexion in the course of trade between the petrol and the appellant. Did they appear to be thrown on to the screen as being marks for distinguishing Shell petrol from other petrol in the course of trade?
In that case, the High Court held that Shell was not using a caricature image of an animated oil drop man as a trade mark in its television advertisements and so did not infringe Esso’s registered trade marks depicting a “humanized oil-drop”. A surprising aspect of that decision is that, in doing so, the High Court overruled Windeyer J who had found it did infringe.
Unlike the High Court (who did watch the ads), we can’t see how Shell’s Oil Drop Man appeared. So it has always been something of a challenge to understand why.
Now Dr Vicki Huang, who professes law at Deakin University, has published an article revealing to the world some images from the original appeal books: “Uncovering secrets of Australia’s landmark High Court cases” (2024) 54 Australian Bar Review 209. (Unfortunately, its behind a paywall.) If you are a trade mark lawyer trying to grapple with what the late Prof. Lahore always regarded as the most elusive concept in Australian IP law, you should read it!
Seven had registered 7NOW as a trade mark, TM No 1540574, in respect of a range of goods and services in classes 9, 35, 38 and 41. 7-Eleven filed non-use applications against the trade mark on the s 92(4)(b) grounds.
By the time the proceeding reached the Full Court, four categories of goods and services in classes 9 and 35 were still in dispute (7-Eleven not pursuing the other services):
Category 1: computer software (in class 9);
Category 2: the promotion and sale of goods and services for others including through the distribution of online promotional material and promotional contests (in class 35);
Category 3: retail and wholesale services including retail trading via television programmes and by telephone and electronic means including the Internet (in class 35); and
Category 4: the bringing together, for the benefit of others, of a variety of goods enabling customers to conveniently view and purchase those goods including by mail order, telecommunications, website or television shopping channels (in class 35).
The trial Judge found that Seven had not discharged its onus under s 100 to show it had used its trade mark in respect of any of the categories and refused to exercise the discretion under s 101 not to order removal.
The Full Court allowed Seven’s appeal in relation to the promotion of goods and services for others only in Category 2 but otherwised dismissed it. As the Full Court emphasised in its quote from the Oil Drop Man case, the different outcomes arose from whether or not Seven’s use of its sign was sufficiently connected with the particular category.
How Seven used its 7NOW mark
It seems Seven’s evidence of use in the relevant period was limited to a one-page website:
As you can see, there is a 7NOW banner at the top of the page. Then (during the relevant period) there were 48 “tiles” which, if clicked, transferred the user to a different websites (some of which were associated with Seven such as 7plus and 7travel while others were not) and, finally, there was a panel with four columns of links at the bottom of the page.
Category 2 services
In effect the website operated as advertising the services being offered from the various websites linked through the 48 “tiles”. As the Full Court explained at [105], the
grid of those icons – [brought] to the consumer’s attention the services and goods offered on the linked websites and [made] it easier for the consumer to acquire those services and goods….
That was the performance of promotional services and those services were provided by reference to the 7NOW badge which clearly functioned as a trade mark. Accordingly, at [106]:
In our view, the connection shown on the website between the 7NOW mark, which has the character of a brand, and the actual performance of those promotional services is sufficient to mean that it has been used as a trade mark in relation to those services. ….
But, as the 7NOW website did not actually offer any goods or services for sale as opposed to the linked websites, the website was not “a means of delivering the service of selling goods. And so, Seven had not proved use of the mark in relation to sales services.
The other categories
To establish use in relation to computer software, Seven relied on the bottom two links under the 7Plus logo in the first column in the page “footer”:
“Get the iOS App
“Get the Android App”
If you clicked on one or other of those links, you were transferred to the page in the App store or the Android Play store where you could download the 7Plus app. 7NOW did not appear anywhere on those pages.
The Full Court agreed with the primary Judge’s conclusion that 7NOW had not been used to distinguish the (7PLUS) software from software being offered by third parties. A number of considerations from the overall context of the use played into this conclusion. These included:
7NOW appeared only once on the website – at the top of the page and separated from the Store links by the 48 “tiles”;
the links to the stores were very much smaller and much less prominent that the tiles;
the links appeared under the, relatively speaking, prominent 7PLUS logo
there was no reference to the 7plus app at all;
getting to the software involved a 3-step process
the user had to navigate to the 7NOW page
the user then had to scroll down to links at the bottom of the page and perceived and read the words under the 7PLUS logo; and
then click on the link and be transferred to the page;
the 7NOW trade mark did not appear on the Store page
The same problem infected the claimed use for the other categories. Seven’s argument was that its 7NOW trade mark was being used for retail services because a user could buy goods of services from the websites linked by some of the tiles. So for example if one clicked on the tile for 7travel or House & Garden, this is what happened:
As with the computer software, however, the Full Court found the consumer would think the goods or services being offered from the linked website were being offered by reference to the trade mark(s) on that website. The connection between the 7NOW trade mark and the service of offering the goods or services in question for sale was not so much attenuated as severed.
If you do a Google search to buy some product, such as say a book, and the search results bring up, say, 10 or 20 links to sites from which you can buy the book, would you think Google was engaging in retailing the book?
Discretion
Finally, the Full Court rejected the appeal from the refusal to exercise the discretion against removal.
Seven placed heavy reliance on its family of 7-formative marks and its reputation in particularly the 7plus mark given there were some 12.5 million registered users of the 7plus app.
A number of factors played into the Full Court’s conclusion at [166] that the risk of confusion if another trader were to use 7NOW in relation to, say, retail services [via convenience stores] was so high that it would be reasonable to retain the registration for all categoires. Seven Network (Operations) Limited v 7-Eleven Inc [2024] FCAFC 65 (Burley, Jackson & Downes JJ)
Ms Skildum-Reid’s application for preliminary discovery against the University of Queensland (UQ) has failed for a number of reasons, the most interesting of which is Derrington J’s ruling that it is likely that a six year statute of limitations applies to infringements of moral rights.
Ms Skildum-Reid is a corporate sponsorship consultant, adviser, speaker and author. Over the years since 2006, she has given presentations at various workshops. In the course of doing so, Ms Skildum-Reid developed one or more slide decks.
In July 2023, Ms Skildum-Reid discovered through internet searches some 15 slide decks with 79 instances of what she considered plagiarism being, or having been used, in two marketing courses being run by UQ.
Through her lawyers, Ms Skildum-Reid wrote to the University stating (amongst other things):
In addition to the egregious and blatant infringement of our client’s Copyright Works, our client considers the unauthorised use of the Copyright Works by the University without any accreditation or reference to her as author (in breach of her moral rights in the Copyright Works) to constitute plagiarism and serious academic misconduct on the part of the UQ staff members who have been responsible for delivering/presenting the UQ Courses.
Correspondence between the parties’ lawyers followed, without resolving the dispute.
Ms Skildum-Reid then brought a preliminary discovery application against the University under both FCR 2011 r 7.22 and r. 7.23. That is, seeking discovery from the University of documents or information to enable her to identify a prospective respondent or, alternatively, whether she had a right to relief against the prospective respondent.
In responding to the application, however, the University provided evidence from the person running the course, a Dr Chien, that she was simply using and updating slide decks provided to her by the University when she took over the course in 2009, some 15 years earlier.
The problem
This evidence caused considerable consternation in Ms Skildum-Reid’s camp. Ms Skildum-Reid wanted to identify who were the person(s) who had prepared the slide decks passed on to Dr Chien.
As those events occurred more than six years previously, Ms Skildum-Reid ran into the limitation of actions provided by Copyright Act 1968 (Cth) s 134(1):
An action shall not be brought for an infringement of copyright or in respect of the conversion or detention of an infringing copy, or of a device (including a circumvention device) used or intended to be used for making infringing copies, after the expiration of six years from the time when the infringement took place or the infringing copy or device was made, as the case may be. (emphasis supplied)
and the University made it plain it intended to rely on s 134(1).
At the hearing of the application for preliminary discovery, Ms Skildum-Reid sought to modify her claims to include infringement of her moral rights.
By this stage, Ms Skildum-Reid had realised that any claims of copyright infringement against whomever had prepared the slide decks provided to Dr Chien were well and truly statute barred. Ms Skildum-Reid’s argument was quite simple. Section 134(1) applies only to infringement of copyright. Infringement of moral rights is not infringement of copyright so, therefore, s 134(1) has no application.
An attempted solution
The argument is that infringement of copyright is defined by ss 36 to 38 in Part III and ss 101 to 102 in Part IV. So, for example, s 36(1) provides in part that “copyright subsisting in a literary, dramatic, musical or artistic work is infringed by ….”[1] (emphasis supplied)
And, further, what constitutes copyright is defined by s 31 “Nature of copyright in original works” in the case of original literary, dramatic, musical and artistic works[2] and ss 85 – 88 in the case of other subject matter. None of these provisions confers a right of attribution or a right of integrity.
Moral rights while subsisting in original works and other (Part IV) subject matter, are not “copyright” and do not arise under Part III (original works) or Part IV (other subject matter). Instead, moral rights arise under Part IX – all the way down in s 189 and following.
These provisions include separate provisions about infringement. So, for example, s 195AO provides:
… a person infringes an author’s right of attribution of authorship in respect of a work if ….
Sections 195AP and 195AQ make corresponding provision for infringement of the moral rights of integrity and against false attribution.
No mention of “copyright” in any of them.
Despite running (in the case of “author’s rights) all the way down to s 195AZO, there is no counterpart to s 134. The Copyright Act does not in terms include a statute of limitations on moral rights claims.
The University, however, sought to invoke the six year statute of limitations on claims of tort arising under Queensland state law[3] which, the University contended, applied through s 79(1) of the Judiciary Act 1903 (Cth):
The laws of each State or Territory, including the laws relating to procedure, evidence, and the competency of witnesses, shall, except as otherwise provided by the Constitution or the laws of the Commonwealth, be binding on all Courts exercising federal jurisdiction in that State or Territory in all cases to which they are applicable.
The State statute of limitations applied
At [40] – [42], Derrington J cited the High Court’s interpretation of the role of s 79 as filling any “gaps” in Federal law by allowing the application of the relevant state or territory law in such cases.[4]
Derrington J could discern nothing in the Copyright Act or the Explanatory Memorandum for the bill introducing moral rights to suggest that a limitations period for moral rights had been deliberately excluded. Accordingly, there was a “gap” and it was generally accepted infringement of copyright, while statute based, was tortious conduct.
Rule 7.22 requires only that the prospective applicant for preliminary discovery may have a claim, not a prima facie case. Derrington J considered, however, it was still necessary to take into account the prospects of success. Pointing out at [53]:
…. It would be productive of wasted time and money to require a person to make discovery of documents to a prospective applicant in circumstances where, if the contemplated action were pursued, it would necessarily fail.
His Honour found that it was unlikely Ms Skildum-Reid would be able to avoid the operation of the Queensland Limitations of Actions Act. Accordingly, her application under r. 7.22 failed. At [54], his Honour concluded:
Here, no answer was provided to the prospective respondents’ submissions that the claims sought to be made would be barred by s 10 of the Limitation of Actions Act. Though there may be arguments that actions for the infringement of statutory intellectual property rights are not tortious in nature so that s 10 of the Act does not apply to them, such arguments would have to overturn long lines of authority to the contrary. The prospect of doing so is unlikely. In those circumstances, the prospective applicant has not established for the purposes of r 7.22(1)(a) that she may have a right to obtain relief against the unidentified previous course co-ordinator or guest lecturer for infringement of her moral rights.
The prospects of a successful claim, or rather the lack of prospects, also meant Derrington J would not have exercised the discretion in favour of ordering preliminary discovery.
Rule 7.23
Ms Skildum-Reid’s application for preliminary discovery under r 7.23 ran into other difficulties. The main problem being, having accused the University of “egregious and blatant” copyright infringement, it was rather difficult to satisfy the requirement that Ms Skildum-Reid had insufficient information to decide whether to sue or not.
Having made allegations in “emphatic and unequivocal terms”, there was nothing in her evidence explaining why she had insufficient information to decide whether to proceed. At [88] – [89]:
…. It might be inferred from her affidavit material that she believes that she has claims against the prospective respondents. However, there is nothing to suggest that her belief is only that she may have claims against them. No statement of uncertainty about the veracity of her anticipated claims, or why that uncertainty might exist, is provided. Further, she did not identify what information she lacked but needed in order to decide whether to start proceedings. (original emphasis)
These were fatal omissions. Whilst it might occasionally be possible to attribute to the prospective applicant the assertions of their solicitor or counsel for the purposes of establishing the reasonable belief, the drawing of that inference can be difficult. It is preferable, on any application for there to be direct evidence of the prospective applicant’s belief for the purposes of subparagraph (1)(a) and of the lack of information which prevents a decision being made for the purposes of (1)(b). Here, none of those matters were addressed in the affidavits relied upon.
Section 101 makes similar provision: “a copyright subsisting by virtue of this Part is infringed by ….” ?
In the case of literary, dramatic and musical works, the familiar rights to reproduce the work in a material form, publish it (for the first time), perform it in public, communicate it to the public etc. ?
s 10 of the Limitation of Actions Act 1974 (Qld). Every state and territory has equivalent legislaton. ?
Rizeq v Western Australia (2017) 262 CLR 1 at [16] (Kiefel CJ) and [90] (Bell, Gageler, Keane, Nettle and Gordon JJ). ?
Last week reviewed the notice and take down / moderation procedure the majority of the Full Federal Court adopted to limit the injunction against Redbubble’s trade mark infringement. In the course of allowing Redbubble’s appeal, the Full Federal Court also unanimously flagged significant questions about when the use of a trade mark on a website overseas may constitute trade mark infringement in Australia.
On these matters, Perram and Downes JJ delivered the main reasons and Nicholas, Burley and Rofe JJ agreed.
You will recall, Redbubble operates a website to which creators can upload their designs and customers can then buy merchandise to which the customers have chosen to have the designs applied. Once a customer has placed an order, Redbubble undertakes the fulfilment function including having the products manufactured and delivered to the customer branded with Redbubble’s trade marks.
Redbubble’s servers (at least in this case) are in the United States.
This part of the appeal concerned the second part of the trial – transactions 8 to 11. In the case of these “transactions”, Hells Angels’ trade marks officer in Australia merely viewed the trade mark infringing images on Redbubble’s website; he did not even make a trap purchase. There was no evidence that anyone else in Australia ever viewed the images or bought them.
Did this infringe?
The short answer is “yes”. But it is how the Full Federal Court got there that will require careful consideration in the future.
At first instance
The starting proposition is that for trade mark infringement in Australia there must be unauthorised use of the trade mark (or a substantially identical or deceptively similar sign) as a trade mark – i.e. as a badge of origin.[1]
Way back in 2005, Merkel J had concluded in Ward v Brodie the fact that a website was accessible from Australia was not sufficient to establish use; it was necessary to show that the website was directed at or targeted Australia.[2]
At first instance in this case, Greenwood J having found that the trap purchases (transactions ##1 to 7) infringed also found that transactions ##8 to 11 infringed even without a purchase. In doing so, his Honour applied the proposition that he had propounded in his 2019 ruling (which also involved trap purchases) at [469]:
The capacity to engage, in Australia, through the website, as Mr Hansen did, constitutes use in Australia by Redbubble. [3]
The appeal
Redbubble had not disputed that proposition at trial. It did seek to raise it as Ground 1 of its appeal. As it had not sought to argue the ground at first instance, however, this would have required leave and ultimately it did not press it.
So, it was unnecessary for the Full Federal Court to deal with the issue. At [48], however, their Honours placed a question over the correctness of Greenwood J’s proposition. Perram and Downes JJ said:
For the reasons which follow, to the extent that [469] of the 2019 judgment deals with the situation disclosed by Examples 8 to 11, we would reserve the correctness of that statement for a case where it is directly raised.
In the following paragraphs, their Honours identified at least three issues which would need to be addressed.
Why is a trap ‘viewing’ not an authorised use
The first issue was why a trap viewing was not a direct infringement.
Here, Perram and Downes JJ considered the trap purchases in Ward v Brodie had not been infringing because (now repealed) s 123(1) of the Trade Marks Act had provided it was not an infringement to use a trade mark in relation to goods to which the trade mark had been applied by or with the consent of the trade mark owner.
With the repeal of that provision, however, that proposition could no longer be applied. Further, at [50] their Honours questioned whether the replacement provision, s 122A,[4] “could be pressed into service” instead. Although their Honours expressed no concluded view at this stage.
However, Perram and Downes JJ at [51] questioned Merkel J’s conclusion in Ward v Brodie that a trap purchase was not authorised use under s 8(1). As a consequence, their Honours considered it would also be arguable that at least some of the trap viewer’s actions in viewing the images (i.e. requesting Redbubble to serve the images to the trap viewer) might also be authorised use and so fall within the defence provided by s 122(1)(e).
Noting once again that these matters had not been argued and so did not need to be decided, at [52] Perram and Downes JJ considered whether authorised use could in fact be made out could be “highly dependent on the particular facts”.
The reason for this warning lay in the different nature of some of the trap “views”. Mr Hansen, the Hells Angels’ trade mark officer had navigated to the Redbubble website and specifically requested the image displayed in transaction #8. The Redbubble website, however, included a carousel feature. So that, when image #8 was displayed the website automatically presented to him other images (##9 and 11) which Redbubble recommended to him.
The geographical reach of s 120(1)
The second issue the Full Federal Court raised was the geographical reach of infringement under the Australian Act. That is, there must be use as a trade mark in Australia. The Act does not reach acts outside Australia (if they do not involve trade mark use in Australia).
Is viewing an overseas website from Australia enough
Thirdly, Perram and Downes JJ at [57] considered it is open to question whether a website overseas which is merely viewed by people from Australia (other than a trap “viewer”) without purchase would constitute use as a trade mark in Australia. Their Honours noted that the previous decisions (apart from Greenwood J’s decision under appeal) including Christian v Nestlé involved an actual trade in Australia.
Noting that Moorgate Tobacco v Philip Morris established a threshold requirement for trade mark use that there “be an actual trade or offer to trade in the goods in Australia”, their Honours explained at [62]:
The question of whether mere overseas projection without a local trade in the goods can amount to trade mark use in Australia is, in our view, a question of considerable difficulty. It is made potentially more complex in this case because although the website is hosted from servers in the United States there is no doubt that Redbubble conducts business in Australia. The difficulty is that that business does not appear to have involved, in the case of Examples 8 to 11, any more than projection into the Australian market without any consequent trade in goods bearing the marks. An important question is whether the necessary geographical nexus for use of a trade mark in Australia can be established by the mere fact that the trader is engaged in trade in Australia albeit not in relation to the infringing trade mark. The answers to these questions are not self-evident. (emphasis supplied)
At [63], Perram and Downes JJ concluded:
On the current state of the authorities, we regard the matter as undetermined. At no point in either of the trial judge’s decisions does his Honour traverse these issues. We would therefore not read [469] of the 2019 judgment as resolving them.
Perhaps the issue that concerned their Honours is that, in the bricks and mortar world, Yanx established that consumers in Australia who bought “Yanx” cigarettes in the USA and imported them into Australia for their own personal use did not use the Yanx trade mark as a trade mark. The transaction was completed in the USA and the goods, when imported for the consumers’ own personal use, was no longer in the course of trade.
On the other side of the ledger, however, Deane J said in Moorgate at 433 –434:
The cases establish that it is not necessary that there be an actual dealing in goods bearing the trade mark before there can be a local use of the mark as a trade mark. It may suffice that imported goods which have not actually reached Australia have been offered for sale in Australia under the mark (Re The Registered Trade Mark “Yanx”; Ex parte Amalgamated Tobacco Corporation Ltd., at pp 204–205) or that the mark has been used in an advertisement of the goods in the course of trade (The Shell Co. of Australia v. Esso Standard Oil (Australia) Ltd., at p 422). In such cases however, it is possible to identify an actual trade or offer to trade in the goods bearing the mark or an existing intention to offer or supply goods bearing the mark in trade. In the present case, there was not, at any relevant time, any actual trade or offer to trade in goods bearing the mark in Australia or any existing intention to offer or supply such goods in trade. There was no local use of the mark as a trade mark at all; there were merely preliminary discussions and negotiations about whether the mark would be so used.
One might think that a website which was directed at, or targeting, Australians was making an offer to trade here or had an existing intention to offer and supply here, even if there is no actual sale. At least arguably, that does not seem very different, if at all, to advertisements in magazines circulating in Australia with the aim of soliciting custom. Moreover, (and this may require evidence in a particular case), if one clicks on the “Buy Now” or “Purchase” button on most websites, the whole transaction is automated and does not involve a volitional decision by the website operator whether or not to complete the transaction.
So why did Redbubble infringe
At the risk of simplifying the arguments very significantly, Redbubble’s argument was a kind of de minimis argument that the infringing images were not available to consumers in the ordinary course of trade.
This argument had two main strands to it. One strand was that the Hells Angels had been able to identify the accused images only through a prolonged period totalling some 4.5 hours over approximately 7 hours – typing in “Hells Angels” and filtering for “Newest”. Redbubble contended this was not the behaviour exhibited by ordinary consumers who, for example, spent on average spent less than four minutes on the site. The other strand was the claimed short period of time the images were available on the website.
Perram and Downes JJ did not think the primary judge had erred in rejecting Redbubble’s argument. Their Honours further pointed out that, if Redbubble had wanted to prove that an image was unlikely to be found, it should have provided evidence of what a search would have revealed at the relevant time. The carousel function also contradicted the argument.
Putting aside the factual problems, their Honours considered there was a more general objection to Redbubble’s argument. This was not a case of a consumer using a general search engine like Google or Bing and having to filter results. Rather, it was a case involving a search of a specific website with specific functionality designed to facilitate locating desired iterms. Having noted the search function and the catalogue Redbubble provided were central components of its business model, their Honours at [81] rejected the argument:
one must distinguish between, on the one hand, the difficulties a consumer may encounter in finding what they are searching for on a website explicitly designed for the purpose of helping them do so and, on the other, the idea that such difficulties entail that the website is not engaged in the ordinary course of its trade. We do not think that the fact that it might be difficult to locate goods bearing infringing trade marks in a poorly laid out store can mean that the goods are not being offered for sale in the ordinary course of the trader’s business. We do not think any different principle applies to a website of the present kind.
Some other matters
Patches and badges of affiliation
At [226], Perram and Downes JJ appeared to suggest that the use of the Hell’s Angels trade mark as “patches” on jackets and the like to indicate exclusive membership of the club would not be use as a trade mark. Pointing out that there may be trade mark use where the sign serves dual purposes, Nicholas, Burely and Rofe JJ at [255] expressly reserved that proposition for future consideration.
Nominal damages?
It is also worth noting that the Full Federal Court rejected Greenwood J’s award of $8,250 as nominal damages (if indeed it was nominal) on the basis that such an amount could never be considered “nominal”, whether it was calculated as $750 per infringement or as $8,250 on a global basis.
After reviewing the amounts that had been awarded in other cases as nominal damages, the Full Federal Court at [127] awarded the sum of $20 per infringement making, in total, $100.
Given the error in calculating the damages, the award of additional damages ($70,000) was also set aside since the amount awarded as damages was relevant to that assessment even if the amount awarded as additional damages did not need to be proportionate.
Most of the factors listed in s 126(2) did not support an award of additional damages and, while there was a ‘mild’ need for general deterrence, the trivial quantum of infringements led to no additional damages being awarded.
See also Christian v Société Des Produits Nestlé SA (No 2) [2015] FCAFC 153; 327 ALR 630 at [78]. An approach recognising that, as a website on a server overseas is accessible by anyone in Australia with an internet connection, the trade mark owner’s rights would be set at nought if infringement could be avoided simply by setting up a website on the internet while at the same time the owner’s rights (and the Court’s powers of enforcement) are territorially limited: Lifestyle Equities CV v Amazon UK Services Ltd [2024] UKSC 8 at [3]. ?
I am not aware of any decided cases on the interpretation of this provision. In the meantime, my attempt to understand it can be found in Warwick A Rothnie, ‘Unparalled importing and trademarks in Australia,’ (2020) 21(3) Business Law International 229 (behind a paywall I’m afraid). ?
The Full Federal Court has allowed Redbubble’s appeal from the remedies granted for its eleven infringements of five Hells Angels’ registered trade marks. In doing so, the majority instituted a kind of monitoring and notice and take down system as a “safe harbour” against trade mark infringement. In addition, the Court raised questions about how use of a trade mark on a website overseas may, or may not, constitute infringing conduct in Australia.
Redbubble operates a website at www.redbubble.com. Creators can upload images to the website. Other users can browse the website, select one or more of these images for application to merchandise such as t-shirts and coffee mugs. Once the orders have been placed, Redbubble contracts for the merchandise to be manufactured and shipped to the purchaser. Redbubble provides the payment processing service, it also provides the fulfilment functions including communications such as order confirmation and invoices with the purchaser. Redbubble’s trade marks were on the communications, the goods ordered and the packaging.
The servers for Redbubble’s website, however, are located in the USA and the day to day management is carried out there.
In this round, in two decisions,[1] Greenwood J at first instance had found Redbubble infringed the Hells Angels registered trade marks by 11 transactions. The 11 transactions were trap purchases by Hells Angels Australia’s trade mark officer.
His Honour went on to order declarations of infringement, damages of $8,250 and additional damages of $70,000. His Honour also ordered an injunction in general terms – for example:
Redbubble is restrained whether by itself, its officers, servants or agents or otherwise howsoever, from using the sign being the device described in Declaration 2 …, or any sign substantially identical with, or deceptively similar to, a sign consisting of the device, on the website operated by Redbubble in relation to trade in goods to which the sign can be applied, where such goods are goods in respect of which Trade Mark No. 526530, Trade Mark No. 723463 and Trade Mark No. 1257993 is registered.
On appeal, Redbubble did not challenge the infringement findings but sought to set aside the remedies.
The injunction
At the time of the judgment, creators were uploading to the website some 90,000 new images each day.
Secondly, it adopted what it called a Proactive Moderation Policy. This involved co-operating with rights holders to build up a stock of Reference Content, which it then used to monitor uploads and remove content assessed as too similar. Redbubble had extended the moderation policy to include some rights even without input from the rights owner. As part of this, Redbubble had been developing a software tool, RB Protect, with image matching and optical character recognition capabilities. This tool was limited to identifying identical images and had not yet developed to the point where it could do so in real time.[3]
At the time of the trial, Redbubble was conducting proactive moderation for some 477 rights holders (up from 200 in 2017). It had proactively moderated about two million artworks since January 2017 and terminated over one million uploader accounts.
On appeal, the Full Federal Court split 3:2 on the injunction issue.
All five judges were agreed that the injunctions ordered by Greenwood J were in error because they were not limited to restraining use of the trade marks as a trade marks; i.e., as badges of origin (see e.g Perram and Downes JJ at [213] – [214]).
There was a disagreement whether it was right to describe a trade mark owner who had proved infringement as having a prima facie right to a final injunction, or generally having such a right. Perram and Downes JJ would not have ordered any injunction. Nicholas, Burley and Rofe JJ ordered an injunction but, as noted above, instituted a “safe harbour” scheme based on Redbubble’s moderation policies.
Perram and Downes JJ
Perram and Downes JJ were concerned that describing a final injunction as a prima facie entitlement risked enlarging the trade mark owner’s rights beyond its statutory entitlement under s 20. Their Honours recognised that a final injunction was generally appropriate but emphasised the remedy, albeit statutory, nonetheless retained its equitable nature and was discretionary.
At [224], their Honours considered a good working rule was that an injunction may be refused if:
(a) the injury to the plaintiff’s legal rights is small;
(b) the injury is one which is capable of being estimated in money;
(c) the injury is one which can be adequately compensated by a small money payment; and
(d) it would be oppressive to the defendant to grant the injunction.
Adopting Shelfer v City of London Electric Lighting Co [1895] 1 Ch 287 at 322–323 and an article by Burley J and Angus Lang in (2018) 12 Journal of Equity 132 at 137–142.
The working rule was significant in this case. First, the evidence demonstrated that the only way Redbubble could comply with the usual form of injunction was to cease operating. Thus at [225] complying with the injunction would not just be inconvenient but grossly disproportionate to the right protected.
The remedy was grossly disproportionate because the Hells Angels had not demonstrated any loss and was not likely to suffer loss of any kind. At [226], Perram and Downes JJ explained:
We do not accept therefore that it would be correct to grant an injunction which could only be obeyed by Redbubble ceasing to trade. The shuttering of Redbubble’s business at the instance of a party which has suffered and is likely to suffer no loss of any kind falls within the working rule. If Hells Angels had demonstrated some actual or apprehended loss then the question would be much more difficult. Such a case might be presented by the owner of a trade mark which had a reputation for the exclusive nature of the products to which it was affixed (although there might be many other circumstances generating similar problems). For such a trader, even the intermittent appearance of its marks on Redbubble’s website for short periods of time could cause real harm to that goodwill and this could be so even without any sales. ….
In the “somewhat unusual circumstances of this case”, therefore, their Honours considered it was not appropriate to grant an injunction at all.
Nicholas, Burley and Rofe JJ
While agreeing that the award of a final injunction is discretionary, at [248] Nicholas, Burley and Rofe JJ considered at [248] that describing the right holder as having prima facie entitlement to a permanent injunction is both unexceptional and correct. Their Honours explained at [245]:
But generally speaking, unless the court is persuaded that there is no significant risk of further infringement occurring, or unless there exists some other discretionary reason for refusing the remedy, a final injunction will usually be granted against a party that is found to have infringed.
Further, at [249], their Honours agreed with Perram and Downes JJ that it is not necessary for the right owner to prove it will suffer irreparable harm or that damages will not be an adequate remedy.
It is also not necessary for the trade mark owner to prove that it is more probable than not that the infringer will commit further infringing acts. A final injunction might still be granted even if the Court considers the risk of repetition is “slight” or “negligible”.
In this case, there was admittedly a significant risk of repeat infringements. Indeed, the case itself involved repeat infringements.
Like Perram and Downes JJ, Nicholas, Burley and Rofe JJ considered a general injunction was not appropriate. The risk of repitition, however, meant an injunction was appropriate. Accordingly, at [251] their Honours limited its effects by specifying that the general injunction would not be breached by compliance with the moderation policies. Therefore, the general injunction was qualified:
3 The Appellant will not be in breach of orders 1 or 2 (the general injunction) if:
(a) it maintains a system involving the surveillance of its website at www.redbubble.com (the Website) and the removal of images that might infringe the marks referred to in orders 1 and 2 above which is no less rigorous than that which it had in place as at 24 August 2022 and is referred to in the affidavit of Mr Joel Barrett of that date as “Proactive Moderation”; and
(b) within seven days of an image to which orders 1 or 2 above refers being identified on the Website by the Appellants or its servants or agents, the Appellant removes the image from the Website.
4 Notwithstanding Order 3, the Appellant will be in breach of order 1 or order 2 if, on the First Respondent or the Second Respondent or both of them becoming aware of an image to which such order refers being available on the Website, and notifying the Appellant of the image by sending an email to legal@redbubble.com (or such other email address as notified by Appellant in writing from time to time):
(a) with the subject field ‘Hells Angels Complaint’;
(b) identifying the image by reference to the location of the image on the Website in the form http://www.redbubble.com/people/[username] /works/[work number and name]; and
(c) stating that the First Respondent and/or the Second Respondent considers that the image would breach Order 1, Order 2 or both,
the Appellant fails to remove the image or images from the Website within seven days of such email.
Perram and Downes JJ had considered such a limitation inappropriate as it required Redbubble to comply with its existing policies and, further, would be seen as giving the Court’s imprimatur to those policies.
Nicholas, Burely and Rofe JJ countered that the Order did not require Redbubble to maintain any surveillance system but would reduce the burden and risks of the usual form of injunction and was similar to the “site blocking” orders under the Copyright Act 1968. In addition, their Honours considered the making of the injunction in this form did not preclude a general injunction alone or different remedies in different cases. At [254]:
What injunctive relief (if any) should be granted at the suit of a different applicant who establishes that its rights have been infringed by Redbubble will depend on the right infringed (eg. copyright or trade mark), the circumstances of the infringement and the evidence, including any evidence of the surveillance and moderation policies and practices followed by Redbubble at the time any such proceeding is heard.
Concluding comments
Review of the discussion about use as a trade mark on websites outside Australia and damages will have to await another occasion.
The judicial acceptance of a notice and take down / moderation scheme for trade mark infringement is a significant development as such a scheme has been implemented in Australia only by statutory intervention in the Copyright Act 1968. The development does have echoes of a similar development in the United Kingdom (albeit in a different regulatory regime).[4]
It is important, however, to keep in mind that the Full Federal Court was very conscious of the limited impact of the infringements in this particular case and the Hells Angels’ very limited attack on Redbubble’s argument that it was not feasible yet to develop a system which did more than detect exact image matches as discussed by Perram and Downes JJ at [147] and [161] – [162].
The Hells Angels discovered several new transactions after the initial hearing on liability had been heard and successfully applied to re-open the trial to address transactions 8 to 11. ?
After Burley J dismissed Aristocrat’s remitted claims for innovation patents over an electronic gaming machine (EGM), Aristocrat has now sought leave to appeal.[1]
To recap
Aristocrat had three innovation patents – AU 2016101967, 2017101629 and 2017101097 – for an EGM with a new, free feature game and trigger. The Commissioner revoked the patents on the ground that they not a manner of manufacture on the basis that the substance of the invention was merely a game or the rules of a game.[2]
Burley J allowed Aristocrat’s appeal, finding that the claim 1 was a mechanism of a particular construction and so was a practical embodiment rather than a mere, abstract scheme.
Although it was accepted before their Honours that the claimed invention would be a manner of manufacture if the game had been implemented in a device made in the “traditional” way utlising cogs and spinning wheels rather than software, the Full Federal Court unanimously upheld the Commissioner’s appeal, albeit for different reasons.
As it had been sufficient for Burley J to deal with claim 1 only and Aristocrat contended there were further issues raised by the dependent claims, the Full Federal Court ordered that:
The proceedings are remitted to the primary judge for determination of any residual issues in light of the Full Court’s reasons including any issues which concern the position of [the residual claims] and the costs of the hearings before the primary judge. (emphasis supplied)
Before that could happen, however, the High Court subsequently granted leave to appeal – unusually for that time, on the papers. As I am sure you no doubt recall, three Judges (Kiefel CJ, Gageler and Keane JJ) of the High Court would have dismissed the appeal; three other Judges (Gordon, Edelman and Steward JJ) would have allowed it; Gleeson J was apparently unable to sit.
The High Court being equally divided, the decision of the Full Federal Court was affirmed.[3] Even the the three judges who would have dismissed the appeal, however, appeared to reject the principle propounded by the majority in the Full Federal Court. At [77], Kiefel CJ, Gageler and Keane JJ said:
…. the two?step analysis proposed by their Honours unnecessarily complicates the analysis of the crucial issue. As explained in Myriad, the crucial issue is as to the characterisation of the invention by reference to the terms of the specification having regard to the claim and in light of the common general knowledge. It is not apparent in the present case that asking whether the claimed invention is an advance in computer technology as opposed to gaming technology, or indeed is any advance in technology at all, is either necessary or helpful in addressing that issue. As Nicholas J explained, the issue is not one of an “advance” in the sense of inventiveness or novelty. In conformity with the decision in N V Philips, the issue is whether the implementation of what is otherwise an unpatentable idea or plan or game involves some adaptation or alteration of, or addition to, technology otherwise well?known in the common general knowledge to accommodate the exigencies of the new idea or plan or game. (citation omitted)
As the tied result in the High Court meant the Full Federal Court’s decision was affirmed, that in turn meant that the patentability of Aristocrat’s claimed invention was remitted to Burley J for determination of any residual issues.
On remitter
On remittal, Burley J rejected Aristocrat’s invitation to adopt the reasons of the three Judges in the High Court who would have allowed the appeal.
Burley J considered it was inappropriate to search for a principle, or principles, which a majority of the High Court judges had agreed on. Rather, pursuant to s 23(2)(a) of the Judiciary Act, the Full Federal Court’s decision had been affirmed and, accordingly, he was required to decide the residual issues in accordance with the order remitting those issues to him to be decided in light of the [majority’s] reasons.
His Honour concluded that the additional features specified in the dependent claims did not make any technical contribution that could be described as an advance in computer technology. Therefore, in accordance with the majority’s conclusions in the Full Federal Court, the claims with the additional features were still nonetheless not patentable subject matter.
Although patents are supposed to be available for any inventions in all fields of technology and without discrimination as to the field of technology,[4] Middleton and Perram JJ had ruled at [25] that, in a case of the kind before their Honours, it was not appropriate to inquire whether the claimed invention was a scheme as that “may reduce the richness of analysis called for.” Paradoxically given the narrowness of the approach compared to that of Nicholas J, their Honours held at [26] that the issue fell to be determined by two questions:
(a) Is the invention claimed a computer-implemented invention?
(b) If so, can the invention claimed broadly be described as an advance in computer technology?
In the case of claim 1, the Full Federal Court found that it was only the integers comprising the feature game (see features 1.10 to 1.12 below) that distinguished the EGM from the state of the art. However, the implementation of the feature game did not involve any advance in computer technology and so claim 1 was not a manner of manufacture.
Claim 5 of the 967 Patent
Burley J identified the features of claim 5 of the 967 Patent (as you will appreciate, those numbered “1.” are from claim 1):
(1.0) A gaming machine comprising:
(1.1) a display;
(1.2) a credit input mechanism operable to establish credits on the gaming machine, the credit input mechanism including at least one of a coin input chute, a bill collector, a card reader and a ticket reader;
(1.3) meters configured for monitoring credits established via the credit input mechanism and changes to the established credits due to play of the gaming machine, the meters including a credit meter to which credit input via the credit input mechanism is added and a win meter;
(1.4) a random number generator;
(1.5) a game play mechanism including a plurality of buttons configured for operation by a player to input a wager from the established credits and to initiate a play of a game; and
(1.6) a game controller comprising a processor and memory storing (i) game program code, and (ii) symbol data defining reels, and wherein the game controller is operable to assign prize values to configurable symbols as required during play of the game,
(1.7) the game controller executing the game program code stored in the memory and responsive to initiation of the play of the game with the game play mechanism to:
(1.8) select a plurality of symbols from a first set of reels defined by the symbol data using the random number generator;
(4.1) wherein each reel of the first set of reels comprises configurable symbols and non-configurable symbols and
(4.2) wherein the game controller is configured to assign prize values to each displayed configurable symbol.
(1.9) control the display to display the selected symbols in a plurality of columns of display positions during play of a base game;
(1.10) monitor play of the base game and trigger a feature game comprising free games in response to a trigger event occurring in play of the base game,
(1.11) conduct the free games on the display by, for each free game, (a) retaining configurable symbols on the display, (b) replacing non-configurable symbols by selecting, using the random number generator, symbols from a second set of reels defined by the symbol data for symbol positions not occupied by configurable symbols, and (c) controlling the display to display the symbols selected from the second set of reels, each of the second reels comprising a plurality of non-configurable symbols and a plurality of configurable symbols, and
(3.1) wherein the second set of reels comprises individual reels each corresponding to an individual display position.
(5.1) wherein the game controller is configured to increase a number of free games remaining in response to the selection of one or more additional configurable symbols in at least one of the free games.
(1.12) when the free games end, make an award of credits to the win meter or the credit meter based on a total of prize values assigned to collected configurable symbols.
Then his Honour held:
[135] Having regard to the findings of the majority decision of the Full Court, in my view, the only conclusion available is that dependent claim 5 of the 967 patent provides no additional features that would warrant a conclusion different to the conclusion reached by the majority decision in respect of claim 1 of the 967 patent. Having regard to dependent claim 5 of the 967 patent as set out above, integers 4.1 and 4.2 add features relating to the use of “configurable symbols” in the “first set of reels” for the first or base game identified in integer 1.8. Integer 3.1 adds that the second set of reels identified in integer 1.11 comprises individual reels each corresponding to an individual display position. Integer 5.1 refers to the game controller (identified in integer 1.6) being configured to increase a number of free games remaining in response to the selection of one or more additional configurable symbols in one or more of the free games.
[136] Taken collectively, the additional integers of dependent claim 5 of the 967 patent impose additional features or limitations on the conduct of the game referred to in claim 1. None, to adopt the language of the majority decision at [63], may be said to pertain to the development of computer technology. Each leaves it to the person designing the EGM to do the programming which gives effect to the family of games (or rules) which those integers define.
Aristocrat Technologies Australia Pty Ltd v Commissioner of Patents, NSD506 / 2024, filed on 26 April 2024. As Burley J’s decision is on appeal from the Commissioner, an appeal is not as of right but requires leave: Patents Act 1990 (Cth) s 158(2). ?
Patents Act s 18(1A)(a) and, for standard patents, 18(1)(a). ?
The High Court has refused Jusand’s application for special leave to appeal [1] the Full Federal Court’s affirmation that Jusand’s patent was invalid on sufficiency and support grounds under the Raising the Bar tests.
In refusing special leave, the High Court simply stated:
The proposed appeal does not have sufficient prospects of success. Otherwise, the proceedings are not a suitable vehicle for the point of principle the proposed appeal seeks to raise.
I think Perram J’s reasons in the Full Federal Court were the first detailed consideration of the operation of these “new” provisions at the appellate level and so they will continue to provide guidance on the meaning and application of the sufficiency and support requirements. (Although one wonders if the second sentence of the High Court’s refusal indicates there may still be some doubt.)
Jusand was the owner of Australian Innovation Patent No. 2019100556 entitled ‘Safety System and Method for Protecting Against a Hazard of Drill Rod Failure in a Drilled Rock Bore’. It had sued Rattlejack alleging that Rattlejack’s SafetySpear infringed claim 1 of the Patent. The trial Judge held there was no infringement and also upheld Rattlejack’s cross-claim that the Patent was invalid and ordered revocation.
According to the specification, the usual practice in underground mining is to excavate a shaft under the ore that is to be mined and then drill up from the shaft to the ore. The bore holes can vary in length from 20m to 60m. The bores are drilled by stringing together lengths of hollow steel tube – drill rods – to make a “string” of drill rods or drill string. Because of the forces involved and the variable geology, however, the drill string may break. The broken or loose drill rod components may become stuck or may fall out unexpectedly.
Evidence at the trial[2] indicated that broken drill string sections could be up to 20m long, weighing 500kg. The impact load of such a falling “projectile” would be 67,000kg.
Thus leaving the mine shaft unsafe; all the more so as the broken drill string might fall unexpectedly.
The Patent proposed a system involving an anchor and an impact reduction member to, in effect, plug the bore hole. The impact reduction member could be tapered along its length up the bore hole so that the force of the falling drill component was translated from the vertical sideways to the horizontal and so acted as a braking force.
Claim 1 in terms stated:
A safety system for protecting against a hazard of drill rod failure in a drilled rock bore above horizontal, and especially a hazard posed by a broken drill rod section within the bore, comprising:
an anchor member configured to be fixed in a proximal end region of the bore adjacent to a rock-face; and
an impact reduction member for reducing an impact of the broken drill rod section striking the anchor member in the proximal end region of the bore, wherein the impact reduction member is configured to be located in the proximal end region of the drilled bore and to extend within the bore above the anchor member to be impacted or struck directly by the broken drill rod section falling within the bore.
You will notice that the “anchor member” and the “impact reduction member” are uncharacterised: the material(s) from which they are made are not specified. Although the claim was for an uncharacterised anchor member and impact reduction member, the Specification relevantly disclosed only things made from steel. It was this lack of specification which led the trial judge and the Full Court on appeal to find the Patent was invalid as lacking sufficiency and support.
Perram J’s reasoning
Perram J gave the judgment, Nicholas and McElwaine JJ agreeing.
(a) disclose the invention in a manner which is clear enough and complete enough for the invention to be performed by a person skilled in the relevant art [the sufficiency requirement]; and
…
(3) The claim or claims must be clear and succinct and supported by matter disclosed in the specification.
Perram J began consideration of the issues by noting at [161] that the terms of the section offered no guidance about how much disclosure would be ‘complete enough’ nor what quantum of ‘support’ was required. Accordingly, the meaning of the provisions was ambiguous.
As a result, it was permissible to resort to extrinsic materials to resolve the ambiguities.[3].
Prior to the Raising the Bar amendments, section 40(2)(a) had only required the complete specification, relevantly, to describe the invention fully and s 40(3) had only required the claim to be fairly based on the matter described in the specification.
In Lockwood No 1, the High Court held that these requirements would be met if the patent explained how to perform the invention in at least one way – to make at least one “thing” falling within the scope of the claims. (Perram J noted that under this test the Jusand Patent would be valid.)
In that respect, Australian law had diverged from the law in the UK but the High Court in Lockwood No 1 had explained that was a result of the UK acceding to the European Patent Convention and adopting the different standards sufficiency and support standards rather than fair basing.
Referring to the Explanatory Memorandum, Perram J noted the intention of the amendments had been to overrule Lockwood No 1 and align Australian law with “overseas jurisdictions”, specifically referring to the approach taken in the UK under Patents Act 1977 s 14(3) and (5) and art.s 83 and 84 of the European Patent Convention. Thus, statements in the Explanatory Memorandum included that ‘support’ picked up two concepts:
• there must be a basis in the description for each claim; and
• the scope of the claims must not be broader than is justified by the extent of the description, drawings and contribution to the art.
In light of this his Honour concluded at [172]:
It will be seen therefore that the European and United Kingdom provisions are relevantly the same as ss 40(2)(a) and (3). I would conclude from that equivalence, the clear statements made to both Chambers by the Ministers who moved for the bill’s second reading and the Explanatory Memorandum that the purpose of the amendments was to ensure that the Australian law of sufficiency and support developed along the same lines as the law of the United Kingdom and the members of the European Union (each of which is a signatory to the European Patent Convention).
To determine whether the requirements of sufficiency and support under s40(2)(a) and (3) were met, therefore, Perram J accepted at [186] and [190] – [195] that the eight principles propounded by Lord Briggs at [56] in Regeneron[4] as explained by Birss J in Illumina were appropriate.
Application to Jusand’s Patent
As the anchor and impact reduction members were uncharacterised, there were a range of materials which could potentially be used within the scope of the claims.
In seeking to invalidate the Patent, Rattlejack invoked proposition (vii) from Regeneron:
(vii) Nor will a claim which in substance passes the sufficiency test be defeated by dividing the product claim into a range denominated by some wholly irrelevant factor, such as the length of a mouse’s tail. The requirement to show enablement across the whole scope of the claim applies only across a relevant range. Put broadly, the range will be relevant if it is denominated by reference to a variable which significantly affects the value or utility of the product in achieving the purpose for which it is to be made. (emphasis supplied)
In Illumina at [277] (in what Perram J described at [190] as “a celebrated discussion of a teapot” illustration), Birss J had explained the concept of relevance for these purposes as turning on the technical contribution or inventive concept. Thus, where a hypothetical claim was to a new teapot with a spout shaped in a new way so as not to drip, while the material from which the teapot was made was relevant to its function as a teapot, that was not relevant in the Regeneron sense as what gave the claimed invention value, utility and purpose was the design of the spout.
This in turn required consideration of what made the claim “inventive” and what its technical contribution to the art is.
At [201], Perram J pointed out that these could be two different things. Echoing Hicton’s Patent, Perram J pointed out that the inventive contribution to a claimed invention may be an abstract idea. However, that was not the patentable subject matter. What the monopoly conferred by a patent was granted for was the claimed invention – the practical implementation of the idea.
From this, it followed that the technical contribution to the relevant art was the product claimed or at [205], in the case of a method, the explanation of how to perform the method disclosed in the specification.
As noted above, the first factual finding was that claim 1 was not limited only to anchors and impact reduction members made from steel. It extended to such things made from anything.
However, relevantly, the Specification disclosed only anchors and impact reduction members made from steel.
Next, based on the evidence before her, the trial judge had held that identifying other suitable materials would involve the person skilled in the art in the exercise of inventive skill.[5]
Claim 1 therefore failed both the sufficiency and support requirements.
At [215], Perram J explained:
…. The invention as claimed was the Safety System which disclosed only a method using an anchor member and a tapered impact reduction member made from steel. Its innovative step was the idea of converting downward weight force into lateral braking forces using the interaction of an anchor member with a tapered impact reduction member. Its technical contribution to the art was taking that idea and explaining how to use it in a Safety System utilising steel. I would therefore see the essence or core of the invention, in terms of Illumina, as involving a consideration of each of these concepts.
His Honour explained that the purpose of the claimed invention was to prevent drill rod sections falling into the shaft. Given the potential forces that such a falling drill rod section could generate, the material(s) from which the anchor and impact reduction member were made significantly affected the utility of the system. As the identification of appropriate materials (other than steel) involved inventive effort, the sufficiency requirement was not satisfied.
Correspondingly, the claim was not enabled across its full scope and the claim was not supported by the description. For example, at [222]:
…. The invention as claimed was a Safety System able to be constructed from a range of materials but the specification showed only how to make it from steel. Thus the monopoly defined by the claims exceeded the technical contribution made to the art. Effectively, if this patent were upheld it would confer upon the Appellant a monopoly over a range of Safety Systems which it has simply not invented. This would reward the patentee for something it has not done and it would prevent others of an inventive disposition from discovering how to make ingenious systems of anchor and impact reduction members from other materials including materials not yet known.
A comment
So far as I am aware, this is the first case in Australia in which the sufficiency and support requirements have operated to invalidate a mechanical patent – these requirements typically arising in cases where classes of chemical compounds and the like have been claimed.
(v) A claim which seeks to protect products which cannot be made by the skilled person using the disclosure in the patent will, subject to de minimis or wholly irrelevant exceptions, be bound to exceed the contribution to the art made by the patent, measured as it must be at the priority date.
(vi) This does not mean that the patentee has to demonstrate in the disclosure that every embodiment within the scope of the claim has been tried, tested and proved to have been enabled to be made. Patentees may rely, if they can, upon a principle of general application if it would appear reasonably likely to enable the whole range of products within the scope of the claim to be made. But they take the risk, if challenged, that the supposed general principle will be proved at trial not in fact to enable a significant, relevant, part of the claimed range to be made, as at the priority date. (emphasis supplied)
What will happen in mechanical (or for that matter any other art’s) patents which are not drafted with this precision. For example, to borrow from Birss J’s celebrated teapot example: a patent for a teapot made from a suitable material.
In his Lordship’s hypothetical and unlike Jusand, Birss J assumed the selection of suitable material did not involve inventive skill. That may be sufficient.
As I understand matters, the risk flagged in Regeneron proposition #6 motivated IPTA to file an amicus curiae brief in support of the special leave application.
Dr Claire Gregg and Will Hird at DCC have reported that IP Australia is increasingly raising sufficiency and support objections against such patents. James Lawrence and John Hogan, patent attorneys at, respectively, Addisons and FB Rice provide some recommendations for drafting practices – at least for new applications.[6]
For ease of reference, the eight propositions have been extracted here. ?
At [212], Perram J summarised the trial judge’s reasoning: “Since it was a plausible working of the claims of the patent to carry out the invention in materials apart from steel, the trial judge reasoned that to do so the skilled addressee would need to engage in the two endeavours identified by her Honour at J [475]-[479] (set out above): first, the skilled addressee would need to select a material which would be suitable for the Safety System’s construction having regard to the enormous forces to which it would be subjected during the impact event; and secondly, the skilled addressee would need to design the Safety System having regard to the physical qualities of the material thus selected. As the trial judge explained, this was because different materials had different degrees of elasticity and stiffness (‘modulus’) (J [420]-[427]), different compressive strengths (J [428]-[432]), different coefficients of friction (J [433]-[435]), different degrees of ductility (J [436]-[437]) and different behaviours when it came to shearing and galling (J [438]-[440]), as well as having different melting points (J [441]-[442]) (noting that the impact event generates heat).” ?
James Lawrence and John Hogan, ‘Sufficiency and the Patent Bargain Post-Jusand v Rattlejack: How Much Disclosure is Enough?’ (2024) 135 Intellectual Property Forum 9 at 18 – 19. ?
