Author name: war

A barrister practising mainly in Australian patents, trade marks, copyright and other IP law; lecturer and contributing author to LexisNexis' Copyright & Designs and Patents looseleaf services

WIPO and traditional knowledge and folklore

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Lessig on copyright reform

Lessig on copyright reform Read More »

Copyright liability for hosting material posted by others

Section 116AE of the Copyright Act 1968 (Category C activity) provides for a limitation on the liability of hosting services for material posted by others.  Think, for example, of YouTube or those websites that ISPs provide their subscribers. The broad conditions for the protection to apply are set out in s 116AH. Copyright Regulations reg. 20A to 20X provide more detailed requirements, including the notice and take down procedures.

Apart from the failed attempts of pretty much naked infringers to rely on these provisions, we don’t have much case law on how these provisions apply.  See Cooper and KaZaa.

The provision is closely modelled on §512(c) of the US Copyright Act (putting to one side the problematical “carriage service provider” criterion).

Therefore, you might find a US case, Io v Veoh, in which the host successfully relied on the defence worthwhile reading.  

Prof. Goldman has an excellent discussion here.

One of Prof. Goldman’s points is the problem of the relationship of the ‘safe harbours’ to liability for secondary infringement (the nearest analog in Australia being liability for authorising copyright infringement).

That could be an issue here too on the Moorhouse principles, but it has always seemed to me that, before this safe harbour was introduced, the web host had an even more direct exposure for direct infringement by reproduction and, possibly, communication. I wonder if the US Second Circuit’s approach in Cartoon Network v Cablevision (Aug. 4) has potential here?

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Troubles with the grace period

The Patents Act was amended (in relatively controversial circumstances) to include a 12 month grace period (somewhat a la the USA) so that use or publication of the invention in the 12 months before the complete specification was filed could not be relied on to destroy validity: see s 24(1)(a) and reg.s 2.2(1A) and 2.3.

Assume that a complete application for a standard patent was filed on 13 May 2005.  Then a complete application for an innovation patent, as a divisional from the standard, was filed on 22 November 2006.

Assume further that the first publication of the invention the subject of both applications was in October 2004.

Which complete application does time run (backwards) from?

If the standard application, the innovation patent will be valid; if not, it will be invalid.  If time runs from the date of the complete application for the innovation patent, however, the divisional status of the innovation application will not have all the usually expected effects.

Stone J has found that the relevant application, on the basis of the specific wording of the legislative provisions, is the complete application for the innovation patent:

10 There does not appear to have been any previous judicial consideration of the present question. Both parties submit that, having regard to the context in which they appear, the ordinary and natural meaning of the provisions supports the construction for which they respectively contend. For reasons given below I have concluded that the construction for which the respondent contends is correct, namely, that where the specification filed in respect of a parent application discloses the invention claimed in a divisional application based on the parent, the “complete application” to which cl 2.2(1A) refers is the divisional application. Consequently I would answer the question for determination as follows:

For the purpose of determining the validity of the Australian Innovation Patent No 2006100978 (Innovation Patent), and on the facts stated in the orders made by Bennett J on 11 December 2007, “the filing date of the complete application” within the meaning of reg 2.2(1A) of the Patents Regulations 1991 (Cth) is the filing date of the complete application for the Innovation Patent on 22 November 2006.

28 I reject the applicant’s argument that the respondent’s construction creates an anomaly by providing the innovation patent with the benefits of divisional status whilst depriving it of the grace period benefits otherwise accruing to that status. As the respondent correctly submits, the consequence of its view is that the grace period simply runs from a later date, which may or may not extend past the priority date based on the filing of the parent application. This is said to reflect:

… a decision not to allow divisional applications to benefit more than they already do from the earlier priority date in circumstances where the divisional application is filed more than a year after the parent application.

Be very, very very careful if you have to rely on the grace period!

Mont Adventure Equipment Pty Limited v Phoenix Leisure Group Pty Limited [2008] FCA 1476.

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Patent application searching

IP Australia and the US PTO have reached agreement to permit some international searching for US patent applications to be undertaken by IP Australia.

According to IP Australia:

The arrangement, which comes into effect on 1 November 2008, will allow applicants from the US to choose IP Australia to undertake the initial search and examination of their patent application under the Patent Cooperation Treaty (PCT). Applications that may not be covered under the arrangement are certain international applications relating to particular mechanical engineering or analogous fields of technology.

The arrangement starts on 1 November 2008.

A bit more detail here.  Nothing on USPTO site as yet.

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Manner of manufacture

The hyper-driven David Brennan is also doing a free lunch time presentation at Allens Arthur Robs in Melbourne on 14 November.

Registration and more details here (pdf).

Attempt to patent the new (?) science of subronics here and check out Prof. Lemley’s take on the issue or bone up on the ACIP review via here.

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In-house trade mark lawyer awards

In-house trade mark lawyer awards Read More »

the value of copyright: determining shadow prices

Ass. Prof. David Brennan and Dr Rhonda Smith will talk for IPRIA about how to determine a fair price for using IP where the IP owner can’t demonstrate any real harm.

I think a situation like this is where an infringer makes sales of the infringing product, but the IP owner wouldn’t have made those sales and so didn’t “lose” anything.

The talk if at Blake Dawson in the city on 18 November at 6.00 pm.

Registration is free via here.

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Resale royalty right

On Saturday, the Age carried a story about the proposed resale royalty right.

The details (yet to be implemented in legislation) are up here (pdf) and here (rtf):

The scheme will start on 1 July 2009.  It will cover:

resales of original works of visual art sold through the secondary art market where the seller has acquired the work after the legislation takes effect. It will not be restricted just to works created after the scheme starts.

If such a qualifying work is resold (in the secondary market) for AUD$1,000 or more, there will be a 5% fee payable to the artist. This is the option the then Government’s 2004 study found would generate the highest level of royalty payments. (There is no indication whether or not the $1,000 will be indexed.)  Liability for payment will be joint and several and will cascade: seller, buyer’s agent, buyer.

For these purposes, a ‘ resale’ will include:

all resales involving art market professionals, public institutions or organisations, and all resales subsequent to the first transfer of ownership, regardless of whether the first transfer was made by sale, gift or any other means.   

A ‘work of visual art’ will be:

work of art original works of graphic or plastic art, such as a painting, a collage, a drawing, a limited edition print, a sculpture, a ceramic, an item of glassware or a photograph. This definition reflects similar arrangements in the EU. 

To qualify, the author will have to be an Australian or permanent resident (or their heirs) – I wonder if this will require qualification at the time the work was made?

The fact sheet indicates the possibility of reciprocity under foreign schemes.  It suggests this might have something to do with the Berne Convention.  A resale royalty (or droit de suite) is not covered by art. 6bis, but art. 14ter.

Joshua Gans looks at the economics here.  Anyone familiar with ‘artist’s rights’ legislation in Australia could have told him that artists, like children and the mentally incompetent, won’t be getting any right to ‘opt out’.  The fact sheet confirms:

The right will be inalienable and unable to be waived. 

The then Government’s 2004 study estimated that the scheme now proposed to be adopted would have captured 72% of sales at public auction in Australian in 2003. 823 artists would have benefited, with an average royalty of $3,300.  One artist would have generated a royalty of $207,000 and, at the other extreme, another $40.  Administration costs would have been $600,000. This is much higher than the UK estimates of £1 million start up costs and £50,000 pa on-going.

For those of you concerned that this might be the end of the auction market in Australia, a UK study (where a (somewhat different) scheme is operating, didn’t think so.

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Jammie Thomas wins – sort of?

Ms Thomas, a single mother of two, is was the first person successfully prosecuted to a substantive trial by the RIAA in the USA for copyright infringement by P2P file “sharing” – using KaZaa, she downloaded and “shared” 24 copies of protected sound recordings.

The jury awarded RIAA statutory damages of US$220,000 by the jury (or $9,250 per song file downloaded).

Well, (pending the appeal), it’s all coming unstuck – a bit.  The trial judge, of his own motion (they do things differently over there?), recalled the matter, heard further argument and has granted a retrial on the basis that his instruction to the jury was erroneous. 

Jury Instruction No. 15 was as follows:

“The act of making copyrighted sound recordings available for electronic distribution on a peer?to?peer network, without license from the copyright owners, violates the copyright owners’ exclusive right of distribution, regardless of whether actual distribution has been shown.”  

The error appears to be in those words “regardless of whether actual distribution has been shown”.  

US copyright law, like much in the US I guess, is rather different.  The US Copyright Act does not include a “making available” right (see art. 8 WCT and arts 10 and 14 WPPT).  In the funny way they do things there, copyright owners do not get an exclusive right to communicate a work electronically; rather they get – in addition to publication and reproduction rights – (1) a right to publicly perform it and (2) to distribute copies: see 17 USC §106, in particular (3):

(3) to distribute copies or phonorecords of the copyrighted work to the public by sale or other transfer of ownership, or by rental, lease, or lending.”   

The “public performance” right is how they provide control over broadcasting.  It turns out, however, that distributing copies requires that there be an actual distribution, not just a making available for distribution.

Four comments:

First, the trial judge has granted a new trial.  

Even on the narrow approach taken by the trial judge (putting to one side the potential for an appeal), Ms Thomas seems to be extremely exposed.  For example, the RIAA argued that the error didn’t matter because Ms Thomas infringed the copyright by downloading the recordings: an exercise of the reproduction right.  The trial judge noted that may well be right, but it was impossible to tell whether the jury awarded the US$220,000 damages on the basis of infringing the reproduction right or the erroneous instruction no. 15, or some combination of factors.

Similarly, the only proof of “distribution” was the copy downloaded by the RIAA’s private investigator.  Ms Thomas argued that this could never be a distribution because the copyright owner (and its authorised agents) can’t infringe its own copyright.  The trial judge rejected this:

The Court holds that distribution to MediaSentry can form the basis of an infringement claim.  Eighth Circuit precedent clearly approves of the use of investigators by copyright owners.  While Thomas did not assist in the copying in the same manner as the retail defendant in Olan Mills – by actually completing the copying for the investigator – or as the retail defendants in RCA/Ariola – by assisting in selecting the correct tape on which to record and helping customers copy – she allegedly did assist in a different, but substantial manner.  Plaintiffs presented evidence that Thomas, herself, provided the copyrighted works for copying and placed them on a network specifically designed for easy, unauthorized copying.  These actions would constitute more substantial participation in the infringement than the actions of the defendants in the Eighth Circuit cases who merely assisted in copying works provided by the investigators.   

That is, by using KaZaa, Ms Thomas placed (whether knowingly or not) unauthorised copies of the recordings in her “shared” file so that other KaZaa users could access it and copy it.  That would be sufficient for liability for distribution if a copy were shown actually to be distributed.  A retrial was necessary, however, because it wasn’t possible to tell how much that infringing act contributed to the damages award and how much as a result of the erroneous Jury Instruction No. 15.

Secondly, the trial judge’s interpretation of the distribution right seems somewhat narrower than what some people had been arguing: that distribution required distribution of physical copies, not transmission of electrons.

Thirdly, Ms Thomas’ imaginary Australian cousin, would not have much hope: see e.g. ss 31(1)(a)(iv) and 85(1)(c) of the Copyright Act 1968, bearing in mind the “communicate” is defined in s 10910 to mean

make available online or electronically transmit (whether over a path, or a combination of paths, provided by a material substance or otherwise) a work or other subject-matter, including a performance or live performance within the meaning of this Act.

and there would also be the small matter of the reproduction of the infringing copy on her computer.

She would not of course be exposed to statutory damages.  As Howard Knopf, over at Excess Copyright notes, the trial judge is extremely upset about the imposition of statutory damages in this context.

Although if the imaginary Australian cousin continued after receipt of a letter of demand “additional damages” might loom large: see Review v Innovative Lifestyle at [55] – [65] (a registered designs case).

Finally, trade war?  Well, not yet.  Who knows whether there will be an appeal and how long it will take.  In any event, the making available right is in the WIPO Copyright Treaty and the WIPO Performers and Phongrams Treaty.  These are not obligations that are required to be implemented by TRIPS and so are not subject to the WTO dispute resolution procedures.

But hey, may be Australian copyright owners could lobby the Australian government and get it to take matters up under the Free Trade Agreement procedures.  One can imagine (well fantasise is perhaps more accurate) that the US administration and Congress would be terrified at the offence to their treaty partner’s rights amidst all that Wall Street “flu”.  At least, it might be something to poke them back in the eye with (in due course and providing they are not wearing lipstick).

Case is Capitol Records Inc v Jammie Thomas here.

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