Because I felt like it

Australia’s proposed Media bargaining incentive

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In late April, the Commonwealth government announced plans to introduce a “News Bargaining Incentive”.

You may recall that back in 2021 Parliament enacted the Treasury Laws Amendment (News Media and Digital Platforms Mandatory Bargaining Code) Act 2021 (Cth) which, as you might guess, introduced a Code[1] requiring designated digital platforms – Google, Facebook, TikTok to you and me – to negotiate agreements with news organisations to pay for the “use” of Australian news media content. Some commentary on the “legals” here and here.

Well, it ran into a problem. Facebook (or, rather, Meta) dropped professional (for want of a better word) Australian news media from its services and so didn’t have to pay anything.

The new incentive aims to fix that by imposing a tax equal to 2.25% of revenue on social media giants (whether they use Australian news media content or not) and give them a rebate for amounts they pay to Australian news media organisations pursuant to the existing bargaining code.[2]

At this stage, there is a package of draft legislation and explanatory materials for consultation (submissions due 18 May 2026).

There is also a separate consultation being run by the Department of Infrastructure on how to design the scheme for the distribution of revenues generated by the proposed scheme. Unsurprisingly, submissions on that are also due by 18 May 2026.

Some technical details

The legislative package consists of 3 bills:

Paragraphs 1.6 to 1.8 of the (draft) EM summarise what is intended:

1.6 The Administration Bill establishes the framework for the NMI,[3] which includes the following key elements:

· An entity is liable for the NMI in a financial year if the entity or a member of its group provides a “significant social media or internet search service” in Australia and the group has “consolidated revenue attributable to Australia”[4] that exceeds $250 million for the financial year;

· The amount of NMI an entity is liable for in a financial year is calculated by applying the NMI rate to the entity’s “consolidated revenue attributable to Australia” from the third-most-recent financial year before the financial year of the NMI;

· An entity can offset their NMI liability in a financial year by entering into commercial agreements with Australian news media businesses to produce news content or to use their news content.

1.7 The Charge Bill imposes the NMI at a rate of 2.25 per cent on the entity’s “consolidated revenue attributable to Australia” determined under the Administration Bill.

1.8 The Consequential Amendments Bill makes necessary changes to the ADJR Act 1977, ITAA 1997 and the TAA 1953 to support the introduction of the NMI.

The key provision is clause 13 of the Administration Bill which will impose a liability to pay a charge on a “parent entity” for each financial year[5] where:

  1. One or more members of the parent entity’s “service group” provide one or more “significant social media or search services” at any time in the financial year; and
  2. The consolidated revenue attributable to Australia of the service group for the financial year exceeds $250 million.

Clause 14 sets out the amount of the charge: the group’s consolidated revenue attributable to Australia multiplied by the rate set out in the Charge Bill – 2.25%.

The liability will apply from the first 12-month financial reporting period of the parent entity which starts on or after 1 January 2025.

Then, clause 16 would entitle the parent entity to offset any “charge offset” applicable for the financial year against the charge payable for that financial year under clause 13.

Clauses 18 to 20 deal with calculating the “charge offset” – i.e., the amounts paid by members of the service group to third party news businesses for the production or making available of “covered news content”, whether under a negotiated agreement or arbitrated under Part IVBA of the Competition and Consumer Act 2010.

Clauses 22 to 24 set out an anti-avoidance scheme where entities enter into schemes the sole or dominant purpose of which is to gain a charge benefit – paying a lower charge than they would have if they hadn’t entered into the scheme. By clause 22(2) these provisions apply whether the scheme, or any part of it, was entered into or carried out inside or outside Australia. The Commissioner [of Taxation] also gets power to make declarations setting out the amount of charge that an avoider should have paid, or should pay in the future.

Some definitions

There are a raft of definitions (often convoluted) in clause 6 and various cross-referenced clauses. “Social media service” and “search service” get their own clauses, respectively, cll 7 to 9.

To that end: a social media service would be defined by cl 8 as an electronic service (1) the sole or significant purpose of which is to enable online social interaction between 2 or more end-users and [presumably][^f4] (2) the service allows end-users to link to, or interact with, some or all of the other end-users and presumably the service allows end-users to post material on the service.

There are 8 types of electronic service which are excluded from this definition, however. They include email, messaging, voice and video calling, gaming, information sharing about products or services, professional networking ….

A search service would be defined by clause 9 to be an electronic service that:

(a) is an internet search engine service; and

(b) enables searches of the internet “broadly” and not just of a limited database or to compare prices of goods or services; and

(c) does not solely or primarily use large language models (ChatGPT, Gemini, Claude etc.)

Paragraph 1.24 of the EM gives examples of things which are not caught by this definition (apart from ChatGPT, Gemini and Claude (which are not mentioned by name) such as a job search website, a search service on a website limited just to searching that website and an accommodation website search engine that allows searching “only” for the price of accommodation. Does anyone use AirBNB, Booking.com, Expedia et al. just to find the price?

And clause 7 would define a significant social media or search service to be one of those services which:

(a) is not prescribed by the rules; and

(b) in the case of social media services has more than 5 million average monthly active Australian users; or

(c) in the case of search services, has more than 10 million average active monthly Australian users.[6]

An active Australian user for a month means a person who accesses the service from within Australia at least once during the month.

The amount paid by way of the charge will not be deductible.[7]

Apparently, the revenue collected from the ~~taxes~~ charges will be distributed amongst registered news organisations according to the number of their journalists producing core news content for Australian audiences. A draft proposal for the design of this scheme has been outlined by the Department of Infrastructure in a consultation paper raising 15 questions about the suitability and operation of the proposed scheme.

According to press reports, the US government has denounced the scheme as ‘extortion’ but the Prime Minister has declared the government’s intention to proceed with the scheme.

News Bargaining Incentive – draft legislation

Consultation on Revenue Distribution

  1. Now Part IVBA of the Competition and Consumer Act 2010 (Cth).  ?
  2. If Media Watch is to be believed (lid dip: Prof. Ricketson) – ‘Big Tech tantrum’, 4 May 2026 – that’s a significant jump on the 0.6% of its revenue Meta paid when it did participate in the Code (and before it found “better” stories on Facebook).  ?
  3. The pedants amongst us will hope they tidy this up: the EM calls the NMI ‘the news media bargaining incentive charge’ while the Bills variously refer to it as a ‘news media bargaining charge’ or simply a ‘charge’.  ?
  4. Defined in cl. 10 broadly to mean gross revenue of the corporate group attributable to Australia as determined in accordance with accounting standards.  ?
  5. Financial year means the parent entity’s accounting financial year, not the Australian financial year.  ?
  6. It is proposed that the regulations may specify a higher amount than the 5 or 10 million.  ?
  7. Items 2 and 5, Schedule 1 to the Consequential Amendments Bill and sections 12–5 and 26–120 of the ITAA 1997.  ?

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Copyright & Designs Update 2023

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I shall be giving an annual update on Copyright & Designs on 19 October at Corrs Chambers Westgarth in Melbourne.

My talk is scheduled to start around 1:00 pm following the Victorian Local Elections.

Details and registration via here.

I hope to see you there!

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Apologies

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I am afraid some “switch” or something got toggled yesterday when I uploaded my latest post. This apparently converted everything into a subscriber only view. That seems to have been corrected now so you should be able to view the latest post in full: The Agency Group v The North Agency: How to Deal with Self Care v Allergan

Please let me know if you are still having difficulties.

In the meantime, sorry!

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Some talks (not me)

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Coming up to the end of the year, there are events on reforming patent litigation practice and domain name disputes in review.

Patent litigation practice

Calling it “A very IPRIA Christmas”, IP Australia and IPRIA are hosting on 7 December at 5:30 pm an end of year celebration exploring “a wish list of practice reforms for making patent litigation in Australia (including appeals from the Office) more expeditious and cost effective.”

The event will be chaired by Justice Rofe and features Clare Cunliffe and David Shavin KC from the Bar and Lisa Taliadoros from the solicitors’ side of the profession.

Registration is free and attendance can be in person or online – although to assist catering they do ask that you register by the end of Monday 5 December if you are planning to attend at the Law School in Carlton in person.

Domain names

If domain name disputes are more your thing, the Hon. Neil Brown KC is also presenting an “Annual round-up on Domain Name Arbitration”. Topics Neil intends to cover include:

  • how the domain name process works
  • latest trends emerging from the decisions of arbitrators
  • what evidence do you need and how to collect the best evidence
  • the procedures to lodge a claim and how to defend one
  • traps for new players.

While Neil and I haven’t always seen eye to eye in particular cases, Neil has lots of experience both in the UDRP and a number of other regional and country-specific dispute resolution processes.

Neil is giving his talk online via Zoom at 10:00 am (Melbourne time; i.e. UTC +11) also on 7 December 2022.

According to his brochure, there is no need to register; just log-in. I am afraid I cannot reproduce the link so you are probably best just to email him directly.

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Season’s Greetings!

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No gliding sugar plum fairies but spotted on a rare foray out of lockdowns.

Image of a scarlet coated toy soldier standing on its drum.

Thank you for visiting over the past year.

Wishing you a very Merry Christmas (or other seasonal celebration of your choice) and all the best for a happy, healthy and safe New Year!

IPwars

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DABUS “over there”

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Judge Brinkema, sitting as a District Court Judge in the Eastern District of Virginia, has upheld the USPTO’s rejection of Thaler’s DABUS applications on the basis that DABUS cannot be an inventor under the US Act.

In the United States, Dr Thaler has two patent applications – US Application Serial Nos 16/524,350 and 16/534,532. In both, DABUS was the nominated inventor and Dr Thaler claims entitlement on the basis of assignment.

As you will no doubt recall, DABUS is a “creativity machine” or artificial intelligence.

To highlight the ludicrousnessfictional nature of the universe we are operating in, Dr Thaler as the owner of DABUS executed the assignment to himself:

In view of the fact that the sole inventor is a Creativity Machine, with no legal personality or capability to execute said agreement, and in view of the fact that the assignee is the owner of said Creativity Machine, this Assignment is considered enforceable without an explicit execution by the inventor. Rather, the owner of DABUS, the Creativity Machine, is signing this Assignment on its behalf.

When the America Invents Act was passed, amongst other things it inserted a definition of “inventor” into the Act so that 35 USC §100(f) provides:

(f) The term “inventor” means the individual or, if a joint invention, the individuals collectively who invented or discovered the subject matter of the invention.

Perhaps (with respect) unsurprisingly, Judge Brinkema ruled that “individual” meant a natural person.

In doing so, her Honour was fortified by the natural or ordinary meaning of the word. Contextually, there were also other references in the Act where Congress had used the term “individual” in reference to the inventor. (For example, §115(a)(1) and (b)(2).)

In addition, the Supreme Court had construed the term “individual” in the Torture Victim Protection Act as referring to a “natural person”. And several Federal Circuit decisions had declared that “inventors must be natural persons” albeit not in the context of the meaning of §100(f).

Judge Brinkema then explained that Dr Thaler “having neither facts nor law to support his argument” contends that policy considerations and the general purpose of the Constitution’s Patent Clause required the statute to be interpreted to permit AIs to be inventors:

Allowing patents for AI-Generated Inventions will result in more innovation. It will incentivize the development of AI capable of producing patentable output by making that output more valuable …. Patents also incentivize commercialization and disclosure of information, and this incentive applies with equal force to a human and an AI-Generated Invention. By contrast, denying patent protection for AI-Generated Inventions threatens to undermine the patent system by failing to encourage the production of socially valuable inventions.

Patent law also protects the moral rights of human inventors and listing an AI as an inventor where appropriate would protect these human rights …. [I]t will discourage individuals from listing themselves as inventors without having contributed to an invention’s conception merely because their name is needed to obtain a patent. Allowing a person to be listed as an inventor for an AI-Generated Invention would not be unfair to an AI, which has no interest in being acknowledged, but allowing people to take credit for work they have not done would devalue human inventorship.

Judge Brinkema considered that binding rulings of the Supreme Court and the Federal Circuit repeatedly held that policy arguments could not override a statute’s plain language. Her Honour also pointed out that, when Congress passed the America Invents Act, AIs were in existence and it was aware of them. Moreover, the USPTO’s own consultations had not exposed any strong support for AIs to be inventors.

Ruling against Thaler, Judge Brinkema concluded:

As technology evolves, there may come a time when artificial intelligence reaches a level of sophistication such that it might satisfy accepted meanings of inventorship. But that time has not yet arrived, and, if it does, it will be up to Congress to decide how, if at all, it wants to expand the scope of patent law.

What does this mean for Australia?

Plainly, the American context is not directly applicable to Australia since, as Beach J pointed out at [118], our Act does not have a definition of “inventor”. So, there is much greater scope for policy arguments to operate.

In that connection, the USPTO report cited by Judge Brinkema can be found here.

Ordinarily, I would be on the side of progress: the NRDC view of the world rather than D’Arcy v Myriad. Our courts, of course, must fit within the D’Arcy v Myriad world view unless Parliament were to bestir itself.

Apart from South Africa (which I understand does not undertake substantive examination of patent applications), Dr Thaler’s applications have been rejected on the ground that an AI is not an inventor by the UKIPO and EPO as well as in the USA. Government policy, which appears to have aligned with the Productivity Commission‘s argument that Australia as an intellectual property importing nation should not be out of step with the international environment, would suggest that an AI should not qualify as an inventor. Can we really afford to keep repeating the mistake made in the 3M case? However, an appeal is pending in the EPO. Maybe there will be an appeal in the USA too but the Federal Circuit’s prior indications do not augur well for the success of that.

It is also difficult to comprehend why, if as our Courts have ruled, that authors for copyright purposes must be humans, the same does not apply to inventors. Of course, our law now explicitly recognises moral rights as part of an author’s rights and there is no corresponding provision under Australian patent law. But both types of rights are justified by the same rationales – natural law or Lockean theory of property and, even, the so-called utilitarian theory.

I guess we shall see.

Thaler v Hirshfield ED VA, 2 September 2021 1:20-cv-903 (LMB/TCB)

Lid dip, Prof. Dennis Crouch at Patently-O.

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Dr Francis Gurry

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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.

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Tobacco Plain Packaging Laws Upheld by WTO Appellate Body

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The WTO’s Appellate Body has dismissed the appeals by Honduras and the Dominican Republic against Australia’s tobacco plain packaging laws (TPP measures).

In summary, the Appellate Body upheld the Dispute Panel’s findings that:

  • the TPP measures were not more restrictive than necessary to fulfil a legitimate objective within the meaning of art. 2.2 of the TBT Agreement
  • the TPP measures were not inconsistent with art. 16.1 of the TRIPS Agreement; and
  • the TPP measures were not inconsistent with art. 20 of the TRIPS Agreement.

(Strictly speaking, the Appellate Body found that Honduras and Dominican Republic did not demonstrate the TPP measures were inconsistent with the relevant obligations.)

Cuba and Indonesia did not proceed with appeals against the Panel decisions rejecting their complaints. Ukraine’s complaint never proceeded to a Panel hearing.

Report and Addendum

Just the findings and conclusions (in pdf format)

Summary of key findings (DS435 – Honduras) and (DS441 – Dominican Republic).

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Yellow tops and labels

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It’s not exactly front page news, but over at news.com.au they have a short video explaining the battle between Kraft and Bega over who can market peanut butter in that yellow get-up. This follows news that Kraft has applied for special leave to appeal the dismissal of its complaint.

A Current Affair also has a go with a lot more flag waving and some gruesome finger dipping.

If you’re looking for the more formal legal analysis, the Full court decision is here.

So far, the moral of the story is that an unregistered trade mark is not property in its own right. Such a “thing” can be assigned only as part of the transfer of the goodwill of a business as a going concern. If you are going to sell your business, or its assets, but you don’t want to the purchaser to use an unregistered name, or get-up, after the sale, you will need to impose appropriate contractual restraints.

Kraft Foods Group Brands LLC v Bega Cheese Limited [2020] FCAFC 65 (special leave application pending)

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auDRP: .com.au and .net.au allocation rules

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auDA is in the process of reviewing the rules for name allocation in the .com.au and .net.au spaces.

According to the Explanatory Guide the significant areas of the proposed changes include:

(1) eligibility rules for the .au namespace (these include allowing registration of second level domain names – i.e., not requiring registration in .com.au or .net.au); 

(2) changes to the use of the State and Territory namespaces to include Peak State and Territory bodies; 

(3) the use of internationalised domain names in the .au namespace; 

(4) the omission of the Domain Monetisation test for com.au and net.au namespaces; 

(5) a new prohibition on sub-leasing, renting or otherwise allowing another party to use a licence, except where the Person is a related body corporate; 

(6) a public interest test to deal with government requests; and 

(7) a new suspension power to provide a more proportionate response to non-compliance with the Licencing Rules. 

A roadshow concludes with a public workshop in Brisbane today.

A draft of the proposed rules for allocation can be found here and a statement of Key Consultation Issues here.

The Consultation page with further documents can be found here.

As part of that review, it is undertaking a survey to gauge community / stakeholder views.

You can take the survey here.

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