The High Court has handed down its decision in Calidad: by a 4:3 split decision, 150 years of precedent has disappeared into history. Given some time constraints, this is going to be a high level summary only. There are two main areas of significance.
First, the High Court (by majority) has ruled that the sale of a patented product exhausts the patentee’s right to control further exploitation of the product. The right of a purchaser to use and deal with the product does not turn on an implied licence which, being implied, could be excluded by appropriate contractual terms.
Secondly, the High Court has given what is probably its first detailed consideration of what constitutes making a new product (infringing) versus merely repairing it (non-infringing).
Calidad was importing and selling reconditioned Seiko (Epsonm) printer cartridges – that is, used Epsonm cartridges which Calidad’s supplier, Ninestar, had refilled. Seiko sued for patent infringement.
On appeal from Burley J, the Full Federal Court had ruled that the reconditioning amounted to making a new product and so the patent infringed.
In allowing the appeal, the High Court unanimously held that refilling 4 categories of the printer cartridges did not infringe. In these categories, what was involved was simply drilling one or two holes in the cartridge case, injecting replacement ink and sealing the holes again. Thus, they had merely been repaired and did not involve making new products.
All judges also held that a fifth category, which involved the replacement of an unpatented component, a memory chip, with another, was not infringing because it too did not involve making a new product.
By a majority of 4 to 3, the High Court held that the reconditioning of four other categories was also not infringing. Nettle, Gordon and Edelman JJ explained why their Honours dissented on this point at :
Category 5, 6 and 7 cartridges involved the making of new, different cartridges: because the processes used to modify those cartridges included cutting off the interface pattern to make them fit a different printer from that for which they were designed. Relative to each cartridge in its totality, that was such a significant change to the form and function of the cartridges as properly to be viewed as changing each cartridge from the cartridge it had been into a new and different cartridge adapted to a new and different task. When that significant change was combined with the other modifications, there was a making of the patented invention thereby infringing Seiko’s patents.
In contrast, Kiefel CJ, Bell and Keane JJ held:
68 The reprogramming of the memory chip in the original Epson cartridges and the removal of the interface patterns did not constitute the making of a new embodiment of the patented product. It may be accepted that the substitution of an “integrated circuit assembly” was a substantive modification which included the layout of the electrical terminals, but it did not constitute a making. The particular layout of the electrical terminals as defined by integers  to  was not affected by this action. Moreover, as Calidad submits, it was an action undertaken to enable the data in the memory chip to be replaced and the cartridge to be re-used, not to change the layout of the terminals in any way.
69 When all of Ninestar’s modifications to each of the categories of cartridges were completed what remained were the original Epson cartridges with some modifications which enabled their re-use. The modifications did not involve the replication of parts and features of the invention claimed. There was no true manufacture or construction of a cartridge which embodied the features of the patent claim.
70 The modifications to the original Epson cartridges were consistent with the exercise of the rights of an owner to alter an article to improve its usefulness and enable its re-use. Both English and United States authority accept the prolonging of the life of a product to be within an owner’s rights of use of a patented product. Regardless of whether it is said to be something done which is closer to “repair” than “making”, it clearly does not involve a manufacture or making. And this is so regardless of whether the exhaustion doctrine or the implied licence doctrine is applied.
So, in all judgments whether there was an infringing making of a new product or a merely a non-infringing repair involved a qualitative assessment of fact and degree.
On the “second” point, the High Court adopted the doctrine of exhaustion on sale by a majority of 4 to 3: (Kiefel CJ, Bell and Keane JJ, Gageler J agreeing; Nettle, Gordon and Edelman JJ dissenting).
All the judges agreed that the decision on the appeal did not turn on whether the doctrine of exhaustion or implied licence from purchase applied. Thus, the adoption of the exhaustion theory is strictly speaking obiter dicta. Nonetheless, as “seriously considered” obiter dicta it is pretty much binding on all lesser courts in Australia.
Accordingly, when a patentee sells a product protected by a patent the patentee’s monopoly rights of use and sale with respect to a product arising from statute are exhausted on sale.
If you have clients who sell patented products on terms seeking to control how they are used – for example, a field of use restriction – you should be recommending a review of the arrangements to ensure that they are binding as a matter of contract law. And, if your client also sells the products, or licenses others to sell them, you should be considering whether the arrangements expose your client to breach of the cartel provisions or exclusive dealing arrangements in the Competition and Consumer Act 2010.
ps. Thanks to John McPhail for pointing out that my spring racing fever had confused a horse race in Old Blighty with a brand of printers! What was I thinking?
Betts v Willmott (1871) LR 6 Ch App 239; Société Anonyme des Manufactures de Glaces v Tilghman’s Patent Sand Blast Co (1883) 25 Ch D 1; National Phonograph Co of Australia Ltd v Menck (1911) 12 CLR 15 at 28;  AC 336 (PC). A bit more background here. ?
Gageler J in separate reasons agreed with their Honours. ?
Kiefel CJ, Bell and Keane JJ at ; Nettle, Gordon and Edelman JJ at . ?
The Full Court has dismissed Urban Alley’s appeal from O’Bryan J’s rulings that URBAN ALE was invalidly registered as a trade mark and La Sirène’s use of URBAN PALE did not infringe URBAN ALE. The decision may provide some helpful clarification of the test of substantial identity and, perhaps, urges caution against his Honour’s conclusion that URBAN PAEL was not used as a trade mark.
Urban Alley had registered URBAN ALE for beer. La Sirène started selling a Farmhouse Style Urban Pale [beer] by La Sirène under this trade mark:
Not capable of distinguishing
The Full Court upheld O’Bryan J’s conclusion that URBAN ALE lacked any capacity to distinguish as essentially descriptive or laudatory. As Urban Alley had not used the term before it registered its trade mark, it was not registrable under s 41.
This was really just the result flowing from the facts arising on the evidence. So a successful appeal was always a steep hurdle.
Practice tip: if you are going to adopt something as a trade mark, it will be unhelpful to refer to it in marketing materials in terms like:
The signature Urban Ale sits somewhere between a classic Australian golden ale and a Belgian blonde, with pleasant tropical notes but a crisp, clean finish. This is a premium beer for the people and is described as a ‘celebration of our great city, a tribute to the laneway culture and a blend of the old and the new’
Name: Once Bitter Style: Urban Ale (Somewhere between an Aussie Golden Ale and Belgian Blonde) ABV: 4-5%
One could be mistaken for thinking the trade mark was “Once Bitter”!
Deceptively similar to prior conflicting registration
Likewise, Urban Alley was unable to overturn O’Bryan J’s conclusion that URBAN ALE was deceptively similar to a prior registration for URBAN BREWING COMPANY and so invalid under s 44.
On this part of the case, Urban Alley argued O’Bryan J’s reasons for concluding the two marks were not substantially identical were inconsistent with his Honour’s conclusion that they were deceptively similar and so the latter conclusion was wrong.
In relation to substantial identity, O’Bryan J held that the inclusion of BREWING COMPANY in the prior mark conveyed a different meaning to ALE.
The Full Court rejected Urban Alley’s attack at  – :
A side-by-side comparison of two marks is a studied comparison. It highlights the differences between the marks just as much as it shows their sameness, in order to reach a conclusion as to whether the two marks are, in fact, substantially identical. The primary judge’s observation must be understood as having been made in that light.
The test of deceptive similarity is fundamentally different. It is not a studied comparison. Rather, it is a comparison between one mark and the impression of another mark carried away and hypothetically recalled, paying due regard to the fact that recollection is not always perfect.
Thus, when considered from the perspective of deceptive similarity and imperfect recollection the differences which were apparent from a side by side comparison lost much of their significance. In that assessment, Urban Alley’s challenge overlooked the significance of URBAN being the first word of both marks and the close association in meaning of “brewing company” and “ale”. At , the Full Court explained:
The appellant also submitted that there is “no relevant trade mark resemblance” between the words “ale” and “brewing company”. This submission requires careful consideration. As the appellant’s submission recorded immediately above recognises, each compared mark must be considered as a whole. It is impermissible to dissect each mark to emphasise its disparate elements and then compare the disparate elements of each in order to reach a conclusion on deceptive resemblance. To start with, this would leave out entirely the impact of the common element “urban”. It would also ignore the synergy between the word “urban” and the other word(s) in each mark. This synergy contributes to the impression gained of each mark, which is carried forward into the relevant comparison between the two. This last-mentioned consideration brings into play the primary judge’s finding that there was a clear association in meaning between “brewing company” and “ale”. Given that clear association, coupled with use of the common element “urban”, it is understandable that the primary judge reached the conclusion he did on the question of deceptive similarity.
It might be thought that the strong emphasis on the narrow scope of the substantial identity test, requiring a studied side by side comparison, is a very welcome brake on the ruling in Pham Global.
Having ruled that Urban Alley’s trade mark was invalidly registered on two alternative grounds, their Honours pointed out that Urban Alley’s appeal against the finding that La Sirène did not infringe must fail. So, it was strictly unnecessary to consider whether La Sirène’s use of “Urban Pale” would have been an infringement.
Speaking obiter dicta, the Full Court emphasised that O’Bryan J’s finding that La Sirène did not use URBAN PALE as a trade mark, despite its prominence, turned very heavily on the “overwhelmingly descriptive” nature of the expression. At , their Honours said:
Thus, it is entirely possible—indeed likely—that, absent the finding of the Word Mark’s lack of inherent adaptation to distinguish because of the ordinary signification of the word “urban”, the primary judge would have come to a different conclusion on trade mark use in relation to the respondent’s use of the name “Urban Pale” on the depicted label. This is particularly so when regard is had to the prominence and location of the name “Urban Pale”. Such use would normally be regarded as persuasively suggesting trade mark use, a consideration which his Honour seems to have recognised in the next paragraph of his reasons, where he said:
205 It is apparent that the labelling of the La Sirène Urban Pale product features the words “Urban Pale” in large lettering and an emboldened font. It is the most prominent name on the labelling. However … I do not consider that that prominence converts the essentially descriptive name into a trade mark indicating the source of origin of the product.
Even so, it will be necessary to treat the finding that Urban Pale was not used as a trade mark very carefully and confined to its particular facts. On this part of the case, the Full Court concluded at :
Be that as it may be, our resolution of Grounds 1, 2 and 3 of the appeal adversely to the appellant necessarily means that Ground 5 of the appeal should be dismissed, as we have said.
You may have already received notification about this but, just in case, this year’s Francis Gurry lecture will involve a “conversation” with Dr Gurry himself.
Following his recent retirement as Director General of the World Intellectual Property Organisation – or WIPO to you and me, Dr Gurry “will reflect on his 35 years of work within the United Nation’s multilateral system – and what the future holds for IP.”
The talk will be streamed online on 25 November 2020 – 6:00pm AEST. Times in other jurisdictions and registration here. Registration is free.
… out, again. Stewart J has dismissed Monster Energy Corporation’s (MEC) opposition to the registration of MONSTER STRIKE by Mixi for computer gaming.
Mixi Inc. applied to register MONSTER STRIKE as a trade mark in Australia for computer games and software in international classes 9 and 41. MEC lost the opposition before the Registrar and appealed. okMEC argued that, because of MEC’s reputation in its MONSTER marks, Mixi’s use of MONSTER STRIKE for computer games and software would be likely to deceive or cause confusion.
Mixi launched its Monster Strike game in October 2013. By June 2014, there had been 8 million downloads and, by June 2018, more than 44 million downloads. Mixi had discontinued the English language version in 2017, so that the game was available only in Japanese or Chinese after that.
The priority date for MONSTER STRIKE was 27 December 2013, so that was the date MEC’s reputation in MONSTER fell to be determined and assessed.
MEC claimed reputation variously in:
(2) MONSTER ENERGY
(3) MONSTER RIPPER
(4) MONSTER REHAB
(5) MONSTER GIRL
(6) MONSTER ARMY
(7) MONSTER ASSAULT
(8) MONSTER KHAOS
and two stylised “M”s known as the M icon or M claw (illustrated below).
MEC did have trade mark registrations for these in Australia, but the goods and services were not for computer games and software.
MEC had launched the original “Monster” energy drink in 2002, with the product first being introduced into Australia in July 2009.
By the priority date, MEC had sold more than US$19 billion worth of drink in the USA and US$23 billion worldwide. Sales in Australia between 2011 and 2013 ranged from US$27 million down to US$15 million. More than 78 million cans of drink had been sold in Australia; of which 40 million were the Monster Energy Original product. The drinks were sold in Australia in over 10,000 outlets including grocery stores, convenience stores, petrol stations, bars, pubs, cafes and take-away food outlets.
MEC’s main witness conceded that there had not been any sales of Monster Assault or Monster Khaos in Australia before the priority date.
You probably already know what the cans look like, but Stewart J included images of typical get-up:
It was not in dispute that MEC did not provide computer software or games under its trade marks. MEC relied, however, on the fact that most of its advertising and promotional expenditure was spent on endorsements of athletes, gamers and musicians and sponsorships of sports, eSports (that is, competitive video gaming) and music festivals.
Between 2002 and 2013, MEC had spent more than US$2.5 billion on advertising, marketing and promotion. In Australia, MEC had spent US$50 million, with expenditure between 2011 and 2013 being US$31.4 million. Apparently, US$7.15 million was expenditure on athletes, musicians, competitions and other events.
MEC argued the target audience for its promotional activities were 18 –35 year olds, which was the same demographic as for computer games.
In addition to sponsoring the Evil Geniuses eSports team (starting in 2012), MEC had social media pages dedicated to gaming. Its Monster Energy Gaming page on Facebook had been operating since 2010. It had one million likes by the end of 2013; garnering about 10,000 “likes” from Australia each month between June and December 2013. MEC also used the Twitter handle @monstergaming.
There had also been extensive placements of MEC products, merchandise and advertising in video games, including t-shirts or other clothing, billboards and even some characters drinking MEC cans of drink. MEC had also sponsored at least one gaming developer, Ali-A, who had over 2 million subscribers to his YouTube channel.
In addition to the sports or gaming specific activities, MEC also engaged in the conventional provision of hospitality at pubs, sporting events, trade shows, gaming stores. The staff wore branded clothing, drove in branded vehicles and handed out branded samples.
MEC’s website had thousands of visits from Australians. Its main Monster Energy Facebook page had 24 million likes, of which 400,000 were Australians. The Monster Energy Girls Facebook page had 245,000 visits including 21,232 from Australia. There was a Monster Energy Facebook page with 3,450 visits from Australia; the Monster Energy Instagram account had almost 32,000 Australian followers and the main Monster Energy YouTube site had over 80 million views worldwide, with some 3.6 million views from Australia.
What MEC’s reputation was in
Unsurprisingly in the light of this evidence, Stewart J accepted that MEC had a well-established reputation in Australia. However, his Honour considered the reputation was closely bound up with the M claw mark and also generally involved the use of Monster and Energy together in combination.
From over 3,000 pages of written evidence, including photographs, MEC was able to identify only limited instances where MEC had used the word Monster on its own. For example (look closely):
At , Stewart J explained:
Many other cans of Monster energy drinks had the same or a similar slogan printed on them. In each instance the writing is small and the MONSTER® is dwarfed by the device marks which are distinctive and catch attention. I do not consider this use of MONSTER® to have generated any particular reputation for the use of the word MONSTER on its own.
His Honour considered that other references to Monster alone were really shorthand references to Monster Energy, which is “really the brand that has a strong reputation.” Some comments on social media by consumers referring only to “Monster” were similarly shorthand.
Accordingly, his Honour concluded at :
In the result, the evidence does not support a conclusion that the MONSTER word mark on its own had any particularly significant reputation in Australia at the relevant time. Any reputation of the word MONSTER is derived from the M claw, stylised MONSTER and the MONSTER ENERGY word mark. It is these that create the association in the minds of consumers.
MEC’s trade marks Monster Assault, Monster Khaos, Monster Ripper, Monster Army, Monster Rehab had either not been used in Australia or, if used, Stewart J considered there was no evidence to support a conclusion that they had developed a significant reputation in Australia.
Stewart J accepted that MEC reputation was well-known and that its (stylised) Monster marks were associated with a range of eSports-related products and activities. However, that association was as “a sponsor” or “supporter” and not as a provider or publisher of video games themselves. At  – :
 MEC submits that by the priority date, Australian consumers in MEC’s target demographic had a wide awareness of MEC’s Australian marks as emanating from a company with a long-standing and highly active presence in gaming and eSports. It further submits that MEC was strongly engaged with the international gaming community through its dedicated gaming internet sites and social media channels; closely connected with the generation of gaming content creators through its association with eSports athletes, teams and other content creators; and actively involved in the gaming industry through its promotion of, and licensing of its marks to appear in, a number of popular games.
 Those submissions can be accepted insofar as they apply only to the M claw and the words MONSTER and ENERGY in association with that mark. It can also be accepted that the marks were well-known in Australia, and that they were associated with a range of gaming and eSports-related products, programs and activities. However, the nature of that association and hence reputation was as a sponsor and supporter. Very often MEC’s marks, showing its sponsorship, appeared alongside many other well-known marks such as Vodafone, Samsung, Toshiba, Blackberry, Alliance and Pirelli, all apparently the names of co-sponsors. Of those with whom the marks had a reputation, there would have been a keen awareness that the trader behind the marks traded in energy drinks and not in other goods or services. MEC sponsored and promoted gaming and eSports events, and for that purpose it published material about such events, but its marks did not, in my assessment, have a reputation as a brand of origin for the provision of gaming event or publishing services; the reputation remained one of sponsor and promoter.
 In my assessment, an ordinary consumer would understand the presence of MEC’s Australian marks on athlete uniforms, equipment, event signage, apparel and the like to be for the purpose of advertising and promoting MEC’s energy drinks, and not to be functioning as a brand, or a source of trade origin, for the particular equipment, uniform, signage and apparel upon which the marks appear. This is similar to the findings in Qantas at  and . Similarly, MEC’s sampling activities conducted at sports events and other venues, including by the Monster Girls, would be understood by the ordinary consumer to have been conducted for the purposes of advertising and promoting its energy drinks.
No real, tangible danger of confusion
At , Stewart J concluded there was no real, tangible danger that a reasonable number of people would be caused to wonder whether or not MONSTER STRIKE was associated with MEC in some way.
First, Stewart J considered that the very different goods and services was significant. As a result, the risk of confusion was “inevitably very much less” than it might have been if they were “the same or significantly overlapping.”
Secondly, the competing trade marks were distinctively different, bearing in mind the stylised or composite form in which MEC’s reputation lay. “Monster” was part of that form, but MEC had not established a significant reputation in that form.
Correspondingly, MEC’s arguments based on the similar linguistic structure or brand extension failed as its evidence did not establish a reputation in the various extensions – Monster Assault, Monster Ripper, Monster Khaos, Monster Army.
Thirdly, the evidence showed that at least 40 other traders had registered trade marks for or including MONSTER in respect of video games etc. While there was no evidence of any use of these, at , Stewart J was prepared to infer that some of these at least would have reputation. However, this played only “a small role” in reducing the potential for confusion.
Fourthly, the likely public, being young men and women interested in computers and gaming, was “brand-savvy and not gullible or easily confused.”
Finally, there was no evidence of actual confusion.
As the claim under s 42(b) requires demonstrating a likelihood of deception, not just mere confusion or being caused to wonder, you won’t be surprised that it failed too.
Stewart J’s decision is the second in a year or so in which MEC has failed in its attempt to extend its rights from the field of energy drinks into what might be thought rather unrelated fields. The earlier decision, involving an infringement action against Rodney Jane’s use for tyres, is under appeal. I wonder if we have heard the last of this dispute too?
The Full Court has refused Meat & Livestock Australia leave to appeal from Beach J’s rulings to grant Branhaven’s patent for the use of genetic information in the selective breeding of cattle. MLA did not seek leave to appeal the ruling that the claims to uses of the genetic information were patentable subject matter.
In its amended form as allowed by Beach J, claim 1 reads:
A method for identifying a trait of a bovine subject from a nucleic acid sample of the bovine subject, comprising identifying in the nucleic acid sample an occurrence of at least three single nucleotide polymorphisms (SNPs) wherein each of the at least three SNPs are significantly associated with the trait, with the degree of statistical significance being p?0.05, and wherein the at least three SNPs occur in more than one gene; and wherein
[and wherein] (a) at least one of the SNPs corresponds to position 300 of any one of SEQ ID NOS: 19473 to 21982, or
(b) the SNP is about 500,000 or less nucleotides from position 300 of any one of SEQ ID NOS: 19473 to 21982 and is in linkage disequilibrium with the SNP at position 300 with an r2 value of ?0.7.
(The [ ] indicates deletions and the italics insertions from the original claim.)
In his Honour’s first ruling, Beach J held that claim 13 was invalid as a claim to genetic information, but otherwise rejected MLA’s attacks based on manner of manufacture, novelty and inventive step. His Honour, however, found that the claims lacked clarity. So Branhaven came back with the amended form.
In his Honour’s second ruling, MLA argued there was no power to amend and, in any event, the proposed amendments were not fairly based. In the result, his Honour rejected MLA’s attacks and directed the patent in amended form proceed to grant. MLA sought leave to appeal.
If an appeal is made to the Federal Court against a decision or direction of the Commissioner in relation to a patent application, the Federal Court may, on the application of the applicant for the patent, by order direct the amendment of the patent request or the complete specification in the manner specified in the order.
At  and , the Full Court considered the plain meaning of this provision was to confer on the Court power to deal with amendments of patent applications under appeal.
The Full Court considered MLA’s argument that Beach J had decided the appeal in his Honour’s first decision and so was functus officio “untenable”.
Within 14 days of the date of these orders, each of the parties file and serve proposed minutes of orders and short submissions (limited to three pages) to give effect to these reasons, including on the question of any steps necessary to deal with any application to amend the claims of patent application no. 2010202253 and on the question of costs.
The Full Court accepted that this order did not dispose of the appeal and so Beach J still had jurisdiction over the patent application in its amended form. At :
The order made by his Honour at the time did not dispose of the appeal but was instead a procedural order requiring the parties to file and serve proposed minutes of order and short submissions to give effect to his Honour’s reasons including in relation to any application to amend the claims of the patent application. There is no substance to the applicant’s submission that either the publication of his Honour’s first set of reasons or the making of that order brought the proceeding to an end.
However, as his Honour correctly observed, the publication of his first set of reasons did not dispose of the appeal since no order to that effect was made. Nor could the publication of his Honour’s first set of reasons amount to an order disposing of the appeal. His Honour made it clear in his reasons that he would refrain from making any such order until any question in relation to amendment had been dealt with.
The Full Court turned then to the substantive argument about whether Beach J erred in allowing the amendments.
Were the amendments permissible?
As already noted, his Honour had found in his first reasons that the relevant claims lacked clarity. The main issue here was that claim 1 did not explicitly state the requirement of “linkage disequilibrium” (LD) for the relevant single nucleotide polymorphisms (SNPs) or what degree of LD was required: see  –  reproduced at  of the Full Court’s reasons.
As the elements were not disclosed in the claim, MLA argued the amendments were impermissible as they introduced new matter into the claims. Beach J, however, allowed the amendments on the grounds that they were limiting amendments and had been in substance disclosed in the specification.
The Full Court essentially accepted this conclusion on the facts. It did note that, generally, a claim which defined an invention more narrowly than the disclosure in the specification would be fairly based, but there may be some situations where that was not the case. The overriding question was whether the claim described an invention different to the disclosure in the specification. At  – :
All other things being equal, a claim that defines an invention in terms that are narrower than a more general description in the body of the specification would support is not likely to travel beyond what is more generally described. But there may be some situations in which what is more specifically defined results in a claim that travels beyond what is described in the specification: AstraZeneca at 244 and -286 where reference is made to Sir Robin Jacob’s judgment in Dr Reddy’s Laboratories (UK) Ltd v Eli Lilly and Co Ltd  RPC 9 at  and . In these situations a claim may be invalid if the invention more specifically defined is an invention that is different from the invention described in the specification as opposed to some narrower embodiment of the latter.
In circumstances where it can be concluded that there is an implicit disclosure of the relevant feature, it is unnecessary to inquire into whether the feature is truly limiting. But even in the absence of an implicit disclosure, a claim does not necessarily lack fair basis because it includes a matter of detail that is not described in the specification so long as it defines an invention that is not different from the invention described in the specification. The proper characterisation of the invention described in the specification is critical when determining whether the claim is to an invention different from that described in the body of the specification. Each case will depend on its own facts and on the proper characterisation of the invention described in the body of the specification. (emphasis supplied)
If the feature added to the claim was implicitly disclosed in the specification, therefore, the claim could be amended. But, amendment might be permissible even if not implicitly disclosed.
At  – , the Full Court focused on Beach J’s unchallenged findings including, in particular, that the skilled addressee “would understand that the specification requires that there be high or strong LD between the limb (a) SNP and the limb (b) SNP”, but not necessarily a very high or perfect LD. The proposed amendments gave effect to that understanding by reference to more precise rather than some less precise criteria.
The Full Court accepted MLA’s criticism that the specification (before amendment) made no mention at all of r2 values. Beach J accepted expert evidence, however, that the r2 values were broadly equivalent to LD values that might fairly be regarded as high or strong. As a result, its inclusion was permissible. Noting that high LD or strong LD were “less precise criterion” than the expressed r2 vaues, at , the Full Court explained:
…. To hold that it is not open to use the r2 statistic or the 0.7 value for the purpose of ascertaining whether there is a high or strong degree of LD between the limb (a) SNP and the limb (b) SNP would involve, in our view, the very kind of over meticulous verbal analysis that should be eschewed when determining whether a proposed amended claim satisfies the requirements of s 102(1) of the Act. This is particularly so in circumstances where the amendment is propounded for the purpose of clarifying an ambiguity that would otherwise prevent the patent application proceeding to grant. In the present case we do not think the use of the r2 statistic in limb (b) results in a claim that defines an invention different from that which is more generally disclosed in the body of the specification as filed. (emphasis supplied)
As a result, the Full Court came to “the very clear conclusion” that MLA had not made out a clear prima facie case of error where the likely result would be allowing an invalid patent to proceed to grant. Accordingly, leave to appeal was refused.
Since this is a pre-Raising the Bar patent, the old “practically certain” test applies to the opposition. That raises the question whether things would turn out differently in a revocation proceeding on the balance of probabilities. After 949 paragraphs for the first decision and 470 paragraphs for the second, perhaps the “very clear conclusion” language might help discourage that course?
Cargill Inc. and Branhave were joint applicants but in the course of the hearings before Beach J, Cargill assigned its interest to SelecTraits Genomics LLC. ?
Claim 13. An isolated polynucleotide identified according to the method of claim 8. ?
Sch. 3 item 6. Prior to the introduction of this amendment, the appeal to the Court was limited to the form of the specification before the Commissioner in the decision under appeal. If an application to amend was made after the Commissioner’s decision, the application could only be dealt with by the Commissioner: see e.g. Airsense Technology Limited v Vision Systems Limited  FCA 828 ?
IP Australia has published a Consultation Paper on a possible new Geographical Indications Right.
You probably know we are not supposed to call a fizzy or bubbly alcoholic beverage made from grapes “Champagne” unless it comes from that special part of France (that’s France in the EU, not Texas).
This, and a range of other prohibitions, stem originally from the Australia-EU Wine agreement (and its successors) back in the 1990s which was supposed to give our wine producers much easier access to the EU market in return for respecting their cultural properties. (I’m not sure if anyone has ever undertaken an empirical assessment to see how that worked out.)
As previously reported, our Government and the EU are in the throes of negotiating a more wide ranging Free Trade Agreement. As part of those negotiations, the EU wants Australian law to significantly broaden the number and scope of EU “geographical indications” which are protected to include a further 236 spirit (as in alcoholic beverages) names and 172 agricultural and other names.
Nothing in this consultation paper means the Australian Government has agreed, or will agree, to make any changes to its existing GI regulatory framework or policy.
The Consultation Paper mentions that a common thread in submissions from the earlier round was the need to ensure that GIs could not be used to stop the continued use of food names already in common use. It envisages that there would be an opportunity to oppose registration on the basis that the term is a common or generic name for “a plant variety or animal breed” in Australia.
It’s not clear if the grounds of opposition would be limited to common or generic terms which are names of a plant variety or animal breed, or they are just examples of what might be common or generic terms. (It should be noted that the wine producers who were using “champagne”, “burgundy”, “claret” and the like didn’t get to oppose those GIs.)
Moreover, p. 2 of the Consultation Paper does note that in the previous round of consultations people could object to the EU’s proposed lists of further GIs but, if Australia agrees to protect any of them as part of the FTA, they will not go through the application and opposition process. They will go straight on to the Register.
Nothing in this consultation paper means the Australian Government has agreed, or will agree, to make any changes to its existing GI regulatory framework or policy.
On the subject of the Register, the Consultation Paper envisages that there would be a new Register created through amendment of the Trade Marks Act 1995. Hopefully, that would bring in all the currently protected GIs as well. Hopefully, it would also be more integrated and searchable than the current hotch potch.
On the more positive side, the Consultation Paper does say (p.3) that protection would not extend to a term like “camembert” alone if the GI registered was “Camembert de Normandie”.
On the other hand, the EU is seeking protection against uses which “evoke” a registered GI. On p. 5, the Consultation Paper notes that:
in the EU a producer has been prevented from selling whisky labelled ‘Glen Buchenbach’ because ‘glen’ (meaning ‘valley’) is a term used in Scotland and was found to evoke the GI ‘Scotch Whisky’. As another example, cheese sold in packaging with images of windmills and sheep was found to evoke the Spanish GI ‘Queso Manchgeo’ because those images are typical of the region in Spain where the GI is produced.
Maybe camembert is made in other parts of France than Normandy? What happens if that were to change and only the Normandy producers could use camembert “over there”? How would you test whether (presumably) Australian consumers would associate windmills and sheep with Don Quixote country? Don’t the Dutch have sheep? Would it matter what kind of windmill? Would the test be what Australian consumers would understand?
According to the Consultation Paper, consultations are open until 30 November 2020. In addition, there:
will be a Webinar – outline of GI consultation on 30 September at 12 noon to 1pm
will be a Virtual Roundtable – Standard of protection on 13 October at 12 noon to 1pm
will be Virtual Roundtable – Australian use of GIs on 15 October at 12 noon to 1pm
will be Virtual Roundtable – General operation of a possible GI system on 20 October at 12 noon to 1pm
will be Virtual Roundtable – GIs and Indigenous Knowledge on 22 October at 12 noon to 1pm
Links and more information about these via this page.
Nothing in this consultation paper means the Australian Government has agreed, or will agree, to make any changes to its existing GI regulatory framework or policy.
we can hardly claim we are not being properly consulted.
We are also not supposed to use “traditional expressions” on our wines. These matters are currently regulated under the Wine Australia Act 2013. There is a rudimentary overview with links to the Register of protected expressions here. ?
The Consultation Paper defines a “geographical indication” as “a name that identifies a product as originating in a country, region or locality where a particular quality, reputation or other characteristic of the product is essentially attributable to that geographic origin.” The definition in s 4 of the Wine Australia Act is in much the same terms, but limited to “wine goods”. ?
Although it is headed “Commercial in confidence”, a Google search on “yarra valley fetta” turned up this impassioned defence of “fetta” / “feta” as a common or generic term (but not, I think a plant variety or breed of animal). ?
I suspect that is Manchego. But it looks like Coles would be safe. ?
Mr Too Aussie’s video suggests the Big Jack is a special or limited time offer. However, Hungry Jack’s did file for and has obtained registration for “Big Jack” as a trade mark, No 2050899, for hamburgers etc. in classes 29 and 30, way back in November 2019. And Ben Butler at The Guardian reports McDonalds is also seeking revocation of that registration on the grounds the application was made in bad faith.
Someone’s suing Hungry Jack’s. They reckon Aussies are confusing the Big Jack with some American burger. But the Big Jack is clearly bigger ….
Hmmm. Earlier this year, Katzman J, in another case about burgers, explained:
What is the line between inspiration and appropriation? That is the question at the heart of the dispute in the present case.
That case didn’t turn out so well for the emulators.
As you will appreciate, McDonald’s have to get TM No. 2050899 cancelled in light of s 122(1)(e). Presumably, in addition to the “bad faith” allegation, McDonald’s is also asserting s 44 and s 60.
These provisions, like s 120, raise the question whether Big Jack is substantially identical with, or deceptively similar to, Big Mac.
You might think, even on the expanded and controversial test for “substantial identity” declared in Pham Global, the side by side comparison doesn’t work out in McDonald’s favour. Mac and Jack look and sound different and, you might think, convey rather different ideas.
What about deceptive similarity tested on the basis of imperfect recollection?
There couldn’t be too many Australians, especially of the fast food consuming public, who wouldn’t appreciate that Big Jack is gunning for Big Mac. But, is there a real and appreciable risk that a significant number of them would be caused at least to wonder whether there was some association with McDonald’s?
Also, you would have to think, all those ordinary Australians would know you can only get a Big Mac in a McDonald’s outlet.
You would probably have to think they pretty much know Hungry Jack’s is a direct competitor, which makes a point of being critical of McDonald’s.
Similarly, pretty much all those ordinary Australians winding up in a Hungry Jack’s take away could hardly be under any illusions that they were in Big Mac land?
Now, at 50(iii), French J did wholly orthodoxly say:
In considering whether there is a likelihood of deception or confusion all surrounding circumstances have to be taken into consideration. These include the circumstances in which the marks will be used, the circumstances in which the goods or services will be bought and sold and the character of the probable acquirers of the goods and services.
Does being in the shop count? Or is that violating the rule that you compare only the allegedly infringing trade mark to the registered trade mark?
What about billboards and the like? No shop context, probably a Hungry Jack’s logo – maybe not.
Also, you might think that “Big Mac” gets into the Woolworths territory of a household name and there could have lots of fun re-running the fight between Woolworths and Henschke.
What do you think?
Would things be any different if we had an anti-dilution law?
Maybe, at 50c to almost $1 more, the Big Jack will turn out to be a commercial flop and Hungry Jack’s will give up. I guess we’ll have to wait and see.
Now, the Senate has established a Select Committee to investigate what is to be done!
The terms of reference are (in full):
That a select committee, to be known as the Select Committee on the Aboriginal Flag, be established to inquire into and report on current and former copyright and licensing arrangements for the Aboriginal flag design, with particular reference to:
a. who benefits from payments for the use of the Aboriginal Flag design and the impact on Aboriginal organisations, Aboriginal communities and the broader Australian community of the current copyright and licensing arrangements;
b. options available to the Government to enable the Aboriginal Flag design to be freely used by the Australian community, including:
i. negotiated outcomes with licence and/or copyright holders:
ii. the compulsory acquisition of licences and/or copyright,
iii. ways to protect the rights and interests of the flag’s legally recognised creator Mr Harold Thomas; and
c. any other matters relevant to the enduring and fair use of the Aboriginal Flag design by the Aboriginal and Australian community.
The fun part: if you are wanting to make a submission, you need to get it in by 18 September 2020 as the Committee is due to report by 13 October.
We thought we had come a long from the days when the Commonwealth Government (in the guise of the Reserve Bank) could appropriate David Malangi’s artwork for the wonderful design of the (now defunct) one dollar note; Johnny Bulun Bulun and a later group of artists including George Milpurrurru rightly successfully asserted their copyrights over blatant infringers.
Now, however, it seems many people think Mr Thomas shouldn’t have the same rights.
(xxxi) the acquisition of property on just terms from any State or person for any purpose in respect of which the Parliament has power to make laws;
and, of course, placitum (xviii) confers power to make laws with respect to, amongst other things, “copyright”. It seems difficult to argue that a law to acquire one person’s copyright would not be a law with respect to copyright.[^f1]
Of course, an assignee of copyright takes subject to any licences that had previously been granted (and are still on foot): Copyright Act 1968 s 196(4). So, the Commonwealth would also have to have some power under the licence to Wam Clothing to terminate it or, presumably, acquire its property on just terms too.
[[^f2]: According to Shephard J’s judgment in Thomas, the Governor-General proclaimed the artistic work to be the flag of the Aboriginal People under s 5 of the Flags Act, back in July 1995. It seems from Sheppard J’s judgment, Mr Thomas came up with the design for use at the Aboriginal Day rally in Adelaide in 1971 “off his own bat”.
On 31 July, the ACCC published an exposure draft of the Bill aimed at forcing Google and Facebook to pay news businesses for the use of their news in services like Google Search, Google News and Facebook News Feed and Tab.
News media businesses claim that Google and Facebook make anywhere from $600 million to $1 billion a year from “using” the news the news media businesses publish.
When Spain introduced a law to redress this “value gap”, Google responded by not including Spanish news in its services. Germany introduced a similar law, but publishers had to opt into the scheme, not out. Apparently, none did.
Last year, the EU introduced a press publisher’s right as part of its Digital Single Market (DSM) Directive. When France implemented this (adopting the Spanish model), Google once again withdrew. The French Competition authority, however, has intervened.
Amongst other things, it concluded that Google and Facebook had become unavoidable trading parties for news media businesses wishing to reach audiences online. This created a significant imbalance in bargaining power.
In December 2019, the Treasurer directed the ACCC to facilitate negotations between the news businesses and Google and Facebook to develop a voluntary bargaining code to address this imbalance.
Those negotiations apparently not leading to the desired outcome, on April 2020, the Treasurer directed the ACCC to develop a mandatory bargaining code:
The Government has decided that the original timeframe set out in its response requires acceleration. The Australian media sector was already under significant pressure; that has now been exacerbated by a sharp decline in advertising revenue driven by coronavirus. At the same time, while discussions between the parties have been taking place, progress on a voluntary code has been limited according to recent advice provided by the ACCC following a request by the Government for an update. The ACCC considers it is unlikely that any voluntary agreement would be reached with respect to the key issue of payment for content.
The exposure draft bill and accompanying explanatory memorandum are the results of that process. I shall try only to describe what is being proposed.
Facebook News Feed (including Facebook Groups and Facebook Pages);
Facebook News Tab (if and when released in Australia);
Google News; and
News business corporations and news sources
A news business corporation may apply for registration of its news business(es) under the scheme if:
the news corporation’s annual revenue exceeds $150,000 or exceeded $150,000 in three of the last five financial years: s 52G;
the news source(s) its seeks to register create and publish online content that is predominantly “core news content”: s 52H;
the news source(s) operate predominantly in Australia for the dominant purpose of serving Australian audiences: s 52J; and
the news source(s) adhere to professional quality standards: s 52K.
Once registered, the rights of the news business corporation extend to “covered news content”, not just its “core news content”.
Core news content and covered news content
The definition in s 52A of “core news content” is content that:
(a) is created by a journalist; and
(b) that records, investigates or explains issues that:
(i) are of public significance for Australians; or
(ii) are relevant in engaging Australians in public debate and in informing democratic decision-making; or
(iii) relate to community and local events.
The explanatory memorandum explains at [1.51] – [1.53] that “core” news content can relate directly to matters of public policy and decision making at any level of government such as political, court and crime reporting. The activities of private sector entities may also be included if of sufficient public importance.
Core news content is a subset of “covered news content” which, in addition to “core news content”, also includes:
content that is created by a journalist and is relevant in recording, investigating or explaining issues of interest to Australians.
sports and entertainment related news such as interviews with coaches and players, reporting about the entertainment industry and coverage of reality television.
(This is not intended to be an exhaustive description of what is included.) However, it does not include sports broadcasts or the results or scores of sports, “entertainment content such as drama or reality TV programming” or:
specialty or industry reporting, product reviews, talk-back radio discussions, content produced by academics and documentaries.
Professional quality standards
The Bill proposes two requirements for quality standards: s 52K. The news source:
must be subject to the rules of the Australian Press Council, the Independent Media Council, the Code of Practice of the Commercial Television Industry or the Commercial Radio industry or the Subscription Broadcast industry, or rules substantially equivalent to these; and
the news source must have editorial independence from the subjects covered.
The explanatory memorandum explains at [1.58] that the second requirement of editorial independence means the news source must not be controlled by a political advocacy group such as a political party, trade union or lobby group. It also means that the news source cannot be controlled by someone with a commercial interest in the coverage and gives the example of sports coverage owned or controlled by the sport’s governing body.
The minimum standards
Once a news business is registered, the digital platform corporation must comply with the minimum standards: s 52L.
These include, for each digital platform service:
listing and explaining what data is collected about users of the news business (s 52M);
explaining how the data about such users made available to the news business differs from the data the digital platform corporation collects about users of its service; and
explaining how the news business can access that additional data;
giving the news business notice of any changes to algorithms used by the digital platform service likely to have a significant effect on the ranking of the news content on the platform or specifically directed at the ranking of paywalled content: s 52N, 52O;
giving notice of other changes to policies or practices likely to have a significant effect on the display and presentation of the news business’ covered news content or advertising directly associated with that content: ss 52P and 52Q;
if requested, provide the news business with flexible content moderation tools so that the news business can remove or filter comments on the digital platform service about the news content: s 52S; and
develop a proposal, in consultation with all registered news businesses, to recognise original covered news content when ranking and displaying news content: s 52T; and
must discriminate between registered news businesses or registered news businesses and news business which are not registered: s 52W.
The arbitration scheme
In addition to the rights afforded it throught the minimum standards, a registered news business may also initiate a bargaining and arbitration process with the digital platform for the use of news content.
The registered news business (or its representative) inititates the bargaining process by giving notice “it wishes to bargain over one or more specified issues relating to its covered news content”: s 52Y.
While the publicly funded ABC and SBS may initiate bargaining, they cannot bargain about remuneration: s 52Y(6).
The parties must negotiate in good faith (s 52ZB) and can demand the provision of information and data relevant to the issues the subject of bargaining, a kind of discovery process: s 52ZC. This includes discovery about the benefits the digital platform derives from use of the news content.
Either party may refer the dispute to compulsory arbitration if:
there has been at least one day of mediation; and
the parties have not reached agreement within three months of bargaining starting: s 52FZ
Provided there has been at least a one day mediation, the parties can also agree to refer the dispute to compulsory arbitration after 10 days.
The arbitration itself is particularly interesting. It is “final offer” arbitration.
Although the news businesses can initiate bargaining over “issues”, the arbitral panel must make a determination about the remuneration payable by the digital platform corporation to the news business(es).
Ten days after the arbitration is established, both parties must submit their final offers about the amount of the remuneration. Once submitted, the parties cannot amend or withdraw their respective “final offers”. They may, however, submit a response to the other party’s final offer. The arbitral panel must accept one or other of the final offers: s 52ZO.
The only exception to this requirement is where the arbitral panel considers both final offers are “not in the public interest because they are highly likely to result in serious detriment to the provision of covered news content in Australia or Australian consumers.” In that case, the arbitral panel must adjust one or other of the final offers as required by the public interest.
The final offers must also be provided to the ACCC, which is authorised to provide its comments about the final offers to the arbitral panel before the panel hands down its decision: s 52ZS.
The “final offer” process has the considerable advantage that it avoids the expense and delay usually associated with rate setting proceedings for access to essential facilities or under the licensing schemes overseen by the Copyright Tribunal.
In deciding which final offer to accept, the arbitral panel must have regard to (s 52ZP):
the direct benefit (whether monetary or otherwise) of the registered news business’ covered news content to the digital platform service;
the indirect benefit (whether monetary or otherwise) of the registered news business’ covered news content to the digital platform service;
the cost to the registered news business of producing covered news content;
whether a particular remuneration amount would place an undue burden on the commercial interests of the digital platform service.
It is striking that the matters which must be taken into account do not include the benefits (direct or indirect) that the news business derives from being carried in the digital platform service.
Once the arbitral determination has been handed down, the parties must enter into a written agreement to ensure the digital platform corporation will pay the news business the remuneration determined in the arbitration: s 52ZT.
The ACCC may issue an infringement notice to a person who contravenes that person’s obligations under this scheme. The penalty for a corporation found to be in contravention is up to 600 penalty units: s 51ACF – i.e., up to $132,000.
In addition, s 76 of the Competition and Consumer Act 2010 will apply so that civil penalties may be imposed up to the greater of:
3 times the total value of the benefits reasonably attributable to the non-compliance; or
10% of the contravenor’s annual turnover in the previous 12 months.
EU’s DSM Directive
The EU’s press publisher’s right under the DSM Directive is an obvious inspiration for this new right for news businesses. There are a number of significant differences, in addition to the far greater detail elaborated into the Bill.
For example, unlike the DSM Directive, the Code to be imposed by the Bill is not tied to use of copyright or other (at this stage) recognised property right. Instead, the Bill creates a right to payment for some “intangible value”.
The DSM Directive expressly excludes from the obligation for payment:
“the use of individual words or very short extracts of a press publication” – which seems a lot like the snippets returned in a Google Search for example.
At least since the Victoria Park Racing case, the High Court has declared that Australian law does not protect all intangible value, only those sources of value falling within recognised legal rights. Later, in the Blank Tapes case, the High Court struck down a “royalty” imposed on the sale of blank cassette tapes on the grounds it was not a payment for use of copyright and so was invalid as a tax or, possibly, an acquisition of property on other than just terms. It will be interesting to see whether the resort to an access regime – one in which the facility provider pays, not the user – changes the calculus.
Under the DSM Directive, the obligation to pay does not apply to articles or materials published before 6 June 2019. Further, it applies to articles and materials only for two years following publication.
Another difference is that art. 15.5 of the DSM Directive imposes an obligation to ensure that the authors of the press publication receive “an appropriate share” of the remuneration the press publisher receives from the digital platforms.
Google’s reaction has been swift. It has cancelled, or suspended, a licensing deal it had reached with a number of independent publishers. It has come out strongly against the scheme. Now, when one initiates a search on Google or seeks to watch something on YouTube, one is met with the following banner:
Comments should be submitted to the ACCC by 28 August 2020
For example, Mason and Kehoe, [‘Tech giants should pay media $600m: Costello’][600m]. Google disputes this and claims that the news media business gain much more value from its services than it receives. ?
Directive (EU) 2019/790 on copyright and related rights in the Digital Single Market and amending Directives 96/9/EC and 2001/29/EC, art. 15. For Communia’s outline and guidelines see here and here. ?