Enforcement

Arbitrating IP disputes in Australia

Last year, IPwars reported on Hammerschlag J’s ruling that arbitrators under the Commercial Arbitration Acts 1984 (here and here (repealed and replaced by a 2010 Act)e.g.) can settle disputes about (1) the ownership of improvements under a technology licence agreement and (2) the licence fees payable if the technology be exploited in various ways in the future.

The arbitrator has now made an award finding that the patents owned by Lloyd or its subsidiary Solfast, the Solfast and Asura patents, were improvements covered by the licence and so should be assigned to Larkden.

Larkden has secured from Hammerschlag J orders enforcing that award and so requiring Lloyd to transfer ownership to Larkden.

Section 35 of the Commercial Arbitration Act 2010 (NSW) provides that an arbitrator’s award must be recognised and is enforceable subject to the formal requirements of s 35 and substantive grounds in s 36. The substantive grounds are:

Grounds for refusing recognition or enforcement

(1)Recognition or enforcement of an arbitral award, irrespective of the State or Territory in which it was made, may be refused only:

(a)at the request of the party against whom it is invoked, if that party furnishes to the Court proof that:

(i)a party to the arbitration agreement was under some incapacity, or the arbitration agreement is not valid under the law to which the parties have subjected it or, failing any indication in it, under the law of the State or Territory where the award was made, or

(ii)the party against whom the award is invoked was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to present the party’s case, or

(iii)the award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration, or it contains decisions on matters beyond the scope of the submission to arbitration, provided that, if the decisions on matters submitted to arbitration can be separated from those not so submitted, that part of the award which contains decisions on matters submitted to arbitration may be recognised and enforced, or

(iv)the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties or, failing such agreement, was not in accordance with the law of the State or Territory where the arbitration took place, or

(v)the award has not yet become binding on the parties or has been set aside or suspended by a court of the State or Territory in which, or under the law of which, that award was made, or

(b)if the Court finds that:

(i)the subject-matter of the dispute is not capable of settlement by arbitration under the law of this State, or

(ii)the recognition or enforcement of the award would be contrary to the public policy of this State.

Lloyd argued that the award in relation to the Solfast patents fell foul of s 36(1)(a)(iii) because the shares in Solfast, originally owned by Lloyd, had been transferred to GENV. Hammerschlag J found this was untenable: the transfer of shares in Solfast was void and set aside under s 267(1) of the Corporations Act. In addition, although developed by Solfast, the Solfast patents were improvements within the meaning of the licence because Lloyd had developed the patents through the medium of Solfast.

Lloyd’s second argument was predicated on s 36(1)(b)(ii) contending that some of the orders in the award were too vague and uncertain to be enforceable. This allegation included the order that Lloyd take all necessary steps to ensure that [Lardken]’s interests in the prosecution of the Assigned Patent Applications are protected and secured.

Hammerschlag J rejected this ground too. The orders were not vague and uncertain. Further, his Honour doubted they would offend public policy as not sufficiently concerning “the State’s basic notions of morality and justice”.

Larkden Pty Limited -v- Lloyd Energy Systems Pty Limited [2011] NSWSC 1331

The arbitrator.

Arbitrating IP disputes in Australia Read More »

Trade marks and survey evidence in Australia

Adidas is suing Pacific Brands, alleging that the latter’s use of 3 stripes on footwear infringes Adidas’ registered trade marks for the “3 Stripes” (the judgment doesn’t identify which trade marks or the Pacific Brands’ product(s) in question).

Adidas gave notice under CM-13 (this is .doc download link, but the terms of the practice note are also set out in the judgment) that it intended to conduct a consumer survey.

It would appear that what Adidas proposed to ask survey respondents was:
After setting out the proposed form and methodology of survey and control to be used the Notice set out the proposed survey questions as follows:
(a) Who do you think makes this shoe?
(b) Why do you say that?
(c) When did you last buy a pair of sports shoes?

Pacific Brands sought an order preventing the survey being undertaken or used. Pacific Brands argued that the survey was a waste of time and money because:

  1. it had conceded Adidas had a reputation in the 3 stripes trade mark in Australia; and
  2. whether or not the use of the stripes on Pacific Brands’ footwear was use as a trade mark or, if it was, was deceptively similar to Adidas’ trade marks,
were purely questions of law for the judge alone.
Robertson J refused to block the survey for those reasons at this early stage. His Honour considered that Gummow J’s observations in Interlego did not support Pacific Brands’ argument.
In support of this proposition, the respondent referred to Interlego AG v Croner Trading Pty Ltd (1992) 39 FCR 348 at 387-389. I do not so read the passages in the judgment of Gummow J, with whom Black CJ and Lockhart J agreed. It is correct to say that deceptive similarity is a question for the tribunal of fact and is not a matter for any witness to decide but, as the passage cited by Gummow J from Lord Diplock’s judgment in General Electric Co (USA) v General Electric Co Ltd [1972] 1 WLR 729 at 738 makes plain, to say that a question is for the tribunal of fact or to describe it as a “jury question” does not mean that evidence going to that question is impermissible.
It might also be said that s 80 of the Evidence Act creates a problem for it too. See Cadbury Scwheppes v Darrell Lea at [49] – [57].
Adidas is not out of the woods yet. It would appear that Pacific Brands have identified defects in the proposed survey itself. Robertson J indicated what Pacific Brands should have done is identify those defects as part of the CM-13 process.
What the defects may be is not identified (and his Honour was not necessarily agreeing that they were defects). At least questions (a) and (b) set out above seem to be the sort of questions which courts have typically found acceptable, at least since the Jif Lemon case, as they do not involve the survey respondent engaging in undue speculation. I guess we shall have to wait and see if anything further emerges.
Adidas AG v Pacific Brands Footwear Pty Ltd [2011] FCA 1205
x

Trade marks and survey evidence in Australia Read More »

Australia signed up to ACTA

Last Saturday, while half of us were trying not to watch Meat Loaf earn a reported $500,ooo (here, here or here) or tweeting, the Minister for Trade travelled to Japan to sign ACTA (the Department’s home page currently has a photograph of the actual signing).

According to the Minister’s Press Release:

The implementation of ACTA will not require legislative changes in Australia. Rather, trading partners will adapt their laws to the high standards of IP enforcement that already apply in Australia.

According to the USTR, no changes would be required to US law either.

The Minister for Trade’s Press Release states that Australia is one of 10 countries attending the signing + the EU. Howard Knopf reports that those signing included Australia, Canada,  Japan, Morocco, New Zealand, Singapore, (South) Korea & USA, but the EU didn’t. According to ZDNet, the EU still working on it. So this may be a bit “optimistic”.

According to the USTR, the EU, Mexico and Switzerland did attend and “confirmed their continuing strong support for and preparations to sign the Agreement as soon as practicable”.

Lid dip @howardknopf

Australia signed up to ACTA Read More »

The Raising the Bar Bill

Senator Carr introduced the Intellectual Property Laws (Raising the Bar) Bill 2011 into Parliament today.

Press release

Download the text of the Bill and EM from here (choose your own format).

You will remember that (according to the Press Release) the main objects of the Bill include:

  • raising patent standards to ensure Australian innovators are well placed to take their inventions to the world;
  • increasing penalties for trade mark counterfeiters;
  • improvements to border security measures for goods that infringe copyright and trade marks;
  • providing free access to patented inventions for researchers; and
  • cutting red tape and delays when seeking an IP right.

While there have no doubt been modifications to the text of the Exposure Draft (and Patentology flags a big change to the transitional provisions for the new patentability standards), you can get a very good feel for what the various parts of the Bill are trying to achieve:

in relation to patents from Dr Summerfield’s 8 part series over at Patentology:

  1. Part 1: inventive standard
  2. Part 2: usefulness
  3. Part 3: provisional specifications
  4. Part 4: enablement
  5. Part 5: claims supported by description
  6. Part 6: experimental use
  7. Part 7: miscellanea including standard of proof
  8. Part 8: transitional

Kim Weatherall also commented on a number of aspects, exploring in particular the (proposed) trade mark criminal offences.

You do need to bear in mind that these commentaries were on the text of the Exposure Draft and it was intended that anomalies identified through the Exposure Draft would be corrected in the Bill so, as I have already noted, there will be changes. Nonetheless, these comments should give you a good fell for what was being intended and issues that might be thrown up.

As you will see from the commentaries on the exposure draft, there are a host of issues to be considered. Time doesn’t permit anything but a cursory attempt on a couple of points here:

Item 113 of Sch 6 will replace the current s 41 of the Trade Marks Act (requiring a trade mark to be capable of distinguishing) with a new provision intended to reverse Blount and ensure that there is a presumption that a trade mark is registrable. It does this by requiring the Registrar to be satisfied that the trade mark is not capable of distinguishing before the Registrar can reject the application on this ground.

So clause 41(2) says “A trade mark is taken not to be capable of distinguishing … only if ….”

(Now I look at it, I wonder how long before it will be before someone tries to argue that “taken not to be capable of distinguishing” means something different to (and less than) “is not capable of distinguishing”. Oh well. Surely that one would be dispatched over the fence for six?)

While the Bill does seek to change the standard of proof against patent applications and patent oppositions from the existing “practically certain to fail” or “clear” type standard to the usual “balance of probabilities (see e.g. items 14 and 15 of Sch 1), no such amendment is proposed for trade mark oppositions. Therefore, the current state of uncertainty on this issue will continue (contrast e.g. Hills v Bitek at [43] – [55] to Sports Warehouse v Fry at [26] – [40]) , even though the school of thought favouring the “practically certain” or “clear” standard was imported from the Patents Act.

The bill will also introduce a whole new regime of oppositions to the registration of trade marks.

Item 18 of Sch. 3 will replace s 52 so that there is an obligation to file a Notice of Opposition which the Registrar, not the opponent, will serve on the applicant. Item 19 will introduce a new s 52A. This will require an applicant to file a notice of intention to defend or the application will lapse.

According to the EM, the regulations (when they are promulgated) will include power for the Notice of Opposition to specify the particulars of the grounds of opposition. The EM explains:

Opponents are currently required to state the grounds on which they intend opposing an application when they file their notice of opposition. However, they are not required to set out the particulars of those grounds. Frequently, this means that the opponent sets out all possible grounds, whether or not they have any intention of relying on them. As a result, the trade mark applicant may be faced with a number of grounds to deal with and no indication of which are key to the opposition until late in the opposition proceedings and sometimes not until the hearing

makes it difficult for the applicant to prepare their case. It also increases costs as the applicant is obliged to prepare a case in response to all grounds raised in the statement of grounds, including those on which the opponent may no longer rely.

The amendment addresses this problem by allowing for regulations to be made to require the opponent to file a statement of particulars of the grounds on which they intend to oppose. This will help focus oppositions earlier, reducing costs and unnecessary effort for the applicant.

The EM talks of the regulations conferring a power to require particulars. Whether this will be a discretionary power to be exercised on a case by case basis or an obligation on all opponents will need to await the terms of the regulations themselves. For example, the EM on items 24 and 25 states that opponents will be required to file both statements of grounds and particulars and  the last paragraph of the EM on item 17 states that the particulars will be required to be filed within 1 month of the filing of the Notice of Opposition.

The regulations will also apparently include a power to amend the statement(s) of grounds and particulars. However, the EM on items 24 and 25 states:

The regulations will only permit the opponent to amend the statement of grounds and particulars under tightly controlled circumstances.

The Federal Magistrates Court will get original jurisdiction in matters under the Designs Act and the Trade Marks Act alongside its existing original jurisdiction in copyright and (what used to be called) trade practices matters.

 

 

The Raising the Bar Bill Read More »

Government responses to ACIP enforcement reviews

The Government has announced its responses to ACIP’s reviews of:

On a quick skim, the main recommendation to introduce a Patents Tribunal to determine “IP” disputes has been found non-viable due to the limitations on the Commonwealth’s repository of judicial powers. With WIPO’s arbitration and mediation service in mind, however, IP Australia is to work with alternative dispute resolution providers to provide a new ADR resource. In the PBR context, the Government states that it does not consider it appropriate for IP Australia, as a regulatory agency, to provide post-grant mediation services itself.

The review on PBR has received rather mixed results.

The Government has not accepted the proposal to introduce a “purchase” right.

The PBR Act will be amended to clarify that harvested material which can also be used as propagating material qualifies as propagating material for the purposes of the Act’s prohibitions.

The Government accepts that no changes to the operation of ss 14 and 15 are required.

At this stage, the Government considers that the making of “mendacious” declarations of PBR is adequately covered by the prohibitions on misleading or deceptive conduct in trade or commerce.

Lots of recommendations for more education.

No doubt, you will have your own favourite recommendation(s), but (as I am not a Kat, ip or otherwise) that is all there is time for today!

The Minister’s Getting Tougher on Imitators press release.

ACIP’s “patents” review (pdf).

ACIP’s PBR review (pdf).

Government responses to ACIP enforcement reviews Read More »

Affinage and A.S.P. 2

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

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

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

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

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

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

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

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

Affinage and A.S.P. 2 Read More »

How wide should injunctions be

Following on from his ruling that Idameneo’s use of its trade mark breached its contractual obligation not to use a trade mark capable of being confused with Symbion’s trade mark, Jessup J has granted an injunction:

The Respondent be permanently restrained, whether by itself or through its subsidiaries from using the Respondent’s Mark.

Three aspects for comment:

First, Symbion sought and his Honour refused to grant an injunction that Idameneo not use its trade mark or “any trade mark, device, brand or logo which is similar to or capable of being confused with” Symbion’s trade mark (i.e., reflecting the terms of the contractual obligation).

In support of that application, Jessup J was referred to a number of cases proclaiming that the usual form of order for infringement of an intellectual property right was an order restraining the respondent from infringing the applicant’s [intellectual property right]. His Honour pointed out, however, that none of those cases established that such an order should be made in the case of breach of contract as a matter of principle.

Jessup J accepted that such a wide injunction might be an appropriate exercise of discretion in a particular case. However, there was nothing in this case which warranted that course:

here is nothing in the facts – or in the dynamics – of the present case which would provide any basis for the suspicion that, if it were precluded from using its present mark, the respondent would devise some artful similarity of the applicant’s mark, or would “sail close to the wind” as it is occasionally said.  If the orders which I made on 13 May 2011 stand, the respondent will be obliged to rebrand its business, its sites and its stationery.  Nothing suggested by the applicant, and nothing which otherwise occurs to me, would give reason to suspect that the respondent would have the slightest interest in adopting a new logo or image which was confusingly similar to the applicant’s mark.  If, contrary to this expectation, the respondent were to do so, it is true that the applicant would be obliged to bring fresh proceedings, but I have little doubt but that the court would not then be readily forgiving of the respondent for failing to keep a sufficient distance between its own new mark and that by reference to which the applicant succeeded in this proceeding.

Secondly, despite the terms of the injunction, Jessup J supplemented it with a further order to:

remove and destroy all signage, corporate stationery, flyers, posters, leaflets, brochures and any other promotional, advertising and marketing materials (whether in hard copy or electronic format) and garments which bear the Respondent’s Mark and which are in the possession, power, custody or control of the Respondent or its subsidiaries

and to deliver up an affidavit confirming all that mayhem has taken place.

Finally, his Honour granted a stay of the injunction – for 6 months or, if Idameneo appealed, for 6 months from the date the appeal was concluded. There is no discussion of the reasons for the stay, so it appears to have been uncontroversial between the parties.

Symbion Pharmacy Services Pty Ltd v Idameneo (No 789) Limited (No 2) [2011] FCA 531

Thirdly,

How wide should injunctions be Read More »

You can arbitrate disputes under an IP licence agreement

Hamerschlag J, in the New South Wales Supreme Court, has ruled that disputes between a licensor and licensee under a technology licence agreement fall within the arbitration clause in the agreement and, consequently, the arbitrator’s determination that he has jurisdication is valid and binding on the parties.

The disputes between the parties related to (1) the application of the “improvements” clause and (2) whether licence fees would be payable if the licensee embarked on different strategies in the future. Hamerschlag J rejected the licensor’s, Lardken’s, argument that neither of the matters were disputes within the scope of the arbitration clause, cl. 19(b):

(b) All disputes arising in connection with this Licence, which are not adjusted by Licensing Agreement between the parties concerned, shall be finally settled by arbitration. The arbitration shall be held before a single arbitrator appointed by the parties or in the absence of agreement by the Chair of the Law Society of New South Wales, and conducted in accordance with and under the Commercial Arbitration Act 1984 of New South Wales. Judgment upon the award rendered may be entered in any court having jurisdiction, or application may be made to such court for a judicial acceptance of the award, or an order of enforcement as the case may be.

The improvements clause

Lardken licensed Lloyd to use Lardken’s technology relating to methods of collecting energy, converting it to heat, transferring the heat energy to a storage medium based on graphite and extracting and releasing the heat energy into useable form.

The licence agreement had one of those “Improvements” clauses, cl. 5.4(a), by which Lloyd agreed to transfer ownership of any improvements in the technology it developed to Lardken and would receive a non-exclusive licence back.

A third party, Ausra, applied for patents in the USA and Australia. Lloyd had notified Lardken about these applications, but had settled a dispute with Ausra on terms that Ausra assigned its rights in the patent applications to Lloyd. Lardken claimed that “Ausra’s” patent applications had been developed from confidential information about Lardken’s technology which, it was alleged, Ausra accessed at Lloyd’s facility. Lardken also claimed it was entitled to ownership of patent applications filed by one of Lloyd’s subsidiaries, Solfast.

Lloyd denied that any of this technology were improvements within the meaning of the licence agreement and, when Lardken refused to agree, referred the matter to arbitration.

Lardken argued that these disputes were not capable of determination by the arbitrator as a matter of public policy as only the Commissioner of Patents had authority under the Patents Act to grant patents or, subject to appeal to the Court, determine who was an entitled person under s 15 and s 32 and s 36.

Hammerschlag J held that the issue between the parties was a dispute about whether the Ausra or the Solfast technology fell within the terms of cl. 5.4(a). That was a dispute falling within the scope of the arbitration clause. The arbitrator’s decision would not, and could not, affect the Commissioner’s determination whether to grant the patent applications or not. The Commissioner’s powers under ss 15, 32 and 36, to determine entitlement, were not exclusive: questions of assignment for example were regularly determined in other fora. All the arbitrator’s decision would do would be to decide rights and obligations as between Lardken and Lloyd.

The liability to pay licence fees

Lloyd also sought the arbitrator’s ruling that it would not have to pay additional licence fees if:

  1. it itself constructed something using Lardken’s technology; or
  2. it sub-licensed one of its subsidiaries to construct something using Lardken’s technology.

Lardken argued the dispute about Lloyd’s potential liability to pay royalties in the future was not a ‘dispute’ capable of arbitration. There was, as yet, no “live issue” between the parties, it was really an attempt to seek an advisory opinion about a hypothetical eventuality.

Hammerschlag J also found that this was a dispute covered by the arbitration clause.

When Lloyd had written to Lardken stating its interpretation of the licence agreement, Lardken had responded disagreeing. Thus, at [101]:

There is thus clear disagreement between the parties on matters arising in connection with the Licensing Agreement. Each has claimed that the Licensing Agreement operates in a way which the other disputes; see Halki Shipping Corporation v Sopex Oils Ltd [1998] 1 WLR 726 at 757. See also the incisive discussion as to what constitutes a dispute in Tjong Very Sumito v Antig Investments at 747 and following, and Sutton et al, Russell on Arbitration , 23rd ed (2007) at [5-003].

Further, that fact that there was an element of futurity about the liability to pay did not render it purely abstract or hypothetical. Hammerschlag J accepted that purely hypothetical matters may not qualify as ‘disputes’, At [104]:

Although both of these disputes involve an element of futurity they are not purely abstract or hypothetical in the sense which makes them incapable of being the subject of determination. They concern whether certain prospective conduct will result in liability to pay fees under the Licensing Agreement (or put another way whether in the event of that conduct occurring the failure to pay would be a breach of contract). It was not suggested that the prospect that that conduct would occur was fanciful.

In reaching this conclusion, his Honour noted that declarations could be granted by the Court in similar situations:

98. In The Commonwealth v Sterling Nicholas Duty Free [1972] HCA 19; (1972) 126 CLR 297 at 305 Barwick CJ said:

The jurisdiction to make a declaratory order without consequential relief is a large and most useful jurisdiction. In my opinion, the present was an apt case for its exercise. The respondent undoubtedly desired and intended to do as he asked the Court to declare he lawfully could do. The matter, in my opinion, was in no sense hypothetical, but in any case not hypothetical in a sense relevant to the exercise of this jurisdiction. Of its nature, the jurisdiction includes the power to declare that conduct which has not yet taken place will not be in breach of a contract or a law. Indeed, it is that capacity which contributes enormously to the utility of the jurisdiction.

Hammerschlag J did note, however, it was a matter for the arbitrator’s discretion whether or not to make a determination on the issue.

The judgment doesn’t say how much it would cost to build one of these plant, but one might well think it makes sense for a party to be able to find out in advance what, if any, licence fee would be payable before it had committed to, or incurred, the expense of building the plant.

Larkden Pty Limited -v- Lloyd Energy Systems Pty Limited [2011] NSWSC 268

Lid dip: Steve White

You can arbitrate disputes under an IP licence agreement Read More »

Civil Dispute Resolution [Bill] Act

Just as the Victorian government has announced its intention to repeal the corresponding obligations for litigation in State courts, the Commonwealth Attorney General has announced that the Civil Dispute Resolution Bill has now been passed by both Houses of Parliament.

The Bill originally lapsed on the dissolution of Parliament last year, but was reintroduced in September.

A key feature of the legislation is the introduction of the new genuine steps statement. According to the General Outline in the EM:

This Bill encourages the resolution of civil disputes outside of the courts and seeks to improve access to justice by focusing parties and their lawyers on the early resolution of disputes.

This Bill seeks to ensure that, as far as possible, parties take ‘genuine steps’ to resolve a civil dispute before proceedings are commenced in the Federal Court or the Federal Magistrates Court.  When commencing proceedings in a court, parties are required to file a statement saying what steps they have taken to resolve their dispute or, if they have not taken any steps, the reasons why.  The Bill gives examples of reasons why steps might not be taken, including urgency, or where the safety of a person or security of property is compromised.  The court can take into account the failure to take steps when exercising its existing case management directions and costs powers.

The Bill does not require parties to take any particular specific step – the most appropriate steps to take depend on the circumstances of the particular dispute.  The Bill is deliberately flexible in allowing parties to tailor the genuine steps they take to the circumstances of the dispute.

The substantive obligations (on litigants and practitioners) under the legislation come into force on the earlier of (a) the date set in a Proclamation or (b) 6 months after Royal Assent.

Some notes on the bill that lapsed.

The Senate Legal and Constitutional Affairs Committee’s report.

The NADRAC report.

Lid dip, Jane.

 

Civil Dispute Resolution [Bill] Act Read More »

Electronic discovery

Electronic discovery Read More »

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