On Telstra’s opposition to the grant of Amazon’s 1-click patent in Australia, the Commissioner’s delegate has found that:
claims 1, 2 and 4 to 61 were invalid;
but:
It seems to me that the use to which server generated client identifiers [i.e., cookies] are put in the present invention is both an elegant and inventive way of achieving one action ordering functionality. Therefore I consider that any of the claims having this integer fulfil the requirement of subparagraph 18(1)(b)(ii) of involving an inventive step. These are claims 3 and 62 to 141.
does not infringe Symbion’s registered trade mark for:
Symbion's trade mark
(As registered, the trade mark is not coloured; it was generally used in the colours depicted. See s 70(3).)
However, Idameneo’s use of its trade mark did breach its contractual obligations.
On the trade mark infringement front, you might have been thinking like me, “Who would have thought?” It turns out, however, that what enabled Idameneo to escape was the nature of the services: medical imaging services. Although the customer, you or I needing an x-ray, pays the bill and has the service practised on us, the relevant public were the doctors (and the odd dentist) who referred the patient to the service. This constituted a specialist market within Lord Diplock’s definition :
My Lords, where goods are of a kind which are not normally sold to the general public for consumption or domestic use but are sold in a specialised market consisting of persons engaged in a particular trade, evidence of persons accustomed to dealing in that market as to the likelihood of deception or confusion is essential. A judge, though he must use his common sense in assessing the credibility and probative value of that evidence, is not entitled to supplement any deficiency in evidence of this kind by giving effect to his own subjective view as to whether or not he himself would be likely to be deceived or confused.
By law, the doctor (and presumably the dentist) could not make a referral without providing the patient with the name and address of the service provider: i.e., they had to know who was going to provide the service.
It is rather a messy deal how Symbion came to license its trade mark to the corporate group of which Idameneo was a member. Under the terms of the licence, however, the licensee agreed (for itself and the other members of the corporate group which included Idameneo) by cl. 5.5:
Use of Similar Marks
Except as permitted by this deed, the [respondent] must not, and must ensure that each Licensee does not, use:
(a) any Trade Mark; or
(b) any Mark similar to or capable of being confused with any of the Trade Marks or which contain the words SYMBION or FAULDING,
as a trade mark, business name, domain name or otherwise anywhere in the world.
(emphasis supplied)
Jessup J was not prepared to treat the obligation as being 2 separate obligations: not to use similar trade marks or ones capable of being confused …. Rather, his Honour considered that the notion of ‘similar’ had to take colour from its context.
On the other hand, his Honour rejected Idameneo’s argument that the contractual obligation was no different to the test provided by s 10 for deceptive similarity for trade mark infringement:
36. …. The respect in which the test stated by the contractual provision conspicuously differs from that under s 10 is that it is concerned with similarity which is capable of causing confusion, whereas the section is concerned with resemblance which is likely to deceive or to cause confusion. Here I think that the applicant has the better of the argument. It is as clear as may be that the parties to the licence agreement were conscious of the circumstance that many of the marks referred therein were registered under the Trade Marks Act; and it may be inferred that they had an active appreciation of the requirements of s 10. I have no reason to doubt that their choice of different language by which to express the prohibition in cl 5.5(b) was a conscious one. I consider that for the court to conflate, as it were, the terms of that prohibition into those of s 10 of the Trade Marks Act would be to neutralise that choice, and would go against the parties’ intentions.
In [37], Jessup J went on to note that the contractual prohibition was part of the consideration Symbion had extracted in return for granting the licence and must be thought to have some intended value.
Applying the usual rules of visual comparison and imperfect recollection, the lower threshold established by capable of confusion compared to likely to deceive or cause confusion meant the contract had been breached.
Jessup J did accept that the setting in which the competing marks were used should be taken into account in deciding whether or not cl. 5.5 was breached. The facts that Idameneo used its mark for medical diagnotic imaging while Symbion used its mark for the wholesale distribution of pharmaceuticals, however, did not save Idameneo:
47 But I do not accept the respondent’s factual submission that the circumstances in which the respondent’s mark is used are so distinct from the business activities of the applicant as to leave no realistic scope for confusion by reason of similarity. Both marks are used in the allied health sector: indeed, before 2008, the applicant’s mark was used by the respondent and its subsidiaries (then not part of the Primary group) in both the pharmaceutical and the imaging parts of that sector. I think I am entitled to regard it as notorious that there is a degree of contact, at both the professional and the consumer levels, as between these parts, such as would make it quite unsurprising if the same people – to some extent at least – had occasion to encounter both the respondent’s mark and the applicant’s mark from time to time. And there is some evidence that the respondent’s mark is used in settings, such as the premises of hospitals, where those who have regular business dealings with the applicant – pharmacists and the staff of hospital pharmacy departments, for example – might be expected to be found. …. (emphasis supplied)
Idameneo argued that cl. 5.5 should be read down so as not to apply to its use of its trade mark because it had been using its trade mark before Symbion’s trade mark had been developed and it was in use when the licence was negotiated. Thus, it argued it was unreasonable to read cl. 5.5 as applying to its continued use of the trade mark. Jessup J rejected this argument, noting the strictness of the test for implying terms into a comprehensive, professionally drafted written agreement. Moreover, Idameneo’s business appears to have been something of a sideline or relatively remote activity within the corporate group as a whole. Jessup J pointed out at [42]:
there is no evidence that the applicant … knew of the existence of the respondent’s mark in the period August-October 2008.
Thus, the conditions for implication of a term could not be made out.
Symbion Pharmacy Services Pty Ltd v Idameneo (No 789) Limited [2011] FCA 389
One week after Apple sued Samsung, Samsung sued Apple for patent infringements, apparently in 4 countries. One point of interest is that this is not Samsung’s defence to Apple’s claims, but is filed so soon after Apple went to court.
On 28 April, the Government’s Convergence Review (noted here) issued a Framing Paper.
According to p. 4 of this curious document:
This initial consultation paper seeks to identify the principles that should guide media and communications regulation in Australia, and provide stakeholders with the opportunity to raise the key issues arising from the principles. Its intent is to invite big-picture thinking about the Australian media and communications environment in its global context and how it may need to be shaped in order to achieve principles that serve the public interest. The committee will use these principles as a starting point to advise government of its preferred alternative policy framework
Accordingly (from p. 11):
the committee considers it appropriate to develop and consult with stakeholders on a set of principles to guide the committee’s consideration of specific issues. These principles have two main aims: to provide a consistent and transparent basis on which to consider specific issues and to ultimately form the basis of a set of policy objectives suitable for a converging media environment.
So your comments on the Framing Paper are sought by 10 June 2011. Then, the timetable is:
Emerging Issue paper : June 2011
Hearings: July 2011
detailed Discussion Papers: August 2011
Final Report: March 2012.
For the most part, the Framing Paper appears to relate to the regulatory regimes for broadcasting and telecommunications.
When announcing his intention to refer aspects of copyright law to the ALRC, the Attorney-General appeared to indicate that the reference (if any) will be subject to what happens in this Convergence Review. It is not so easy to identify from the Framework Paper, however, what areas might be cut across by the ALRC reviewing copyright law.
The Framework Paper does refer in several papers to “legitimate content services”. May be, it is to be found in “principle 6” which is (proposed to be):
Principle 6: Australians should have access to the broadest range of content across platforms and services as possible
This principle is taken from paragraph 5(e)(ii) of the Terms of Reference and is consistent with the objects in the BSA12, and s.3(1)(a) of the Telecommunications Act to ‘Promote the long-term interests of end-users of carriage services or of services provided by means of carriage services.’ The committee considers that a guiding principle for the review is to maximise the range of legitimate content services available to Australians. A consideration is that regulation should be flexible and adaptable to changing market and technological circumstances, and constructed with a view to enhancing audiences and consumer choice.
Principle 7 appears to be directed more to the question of ‘net neutrality.
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:
it itself constructed something using Lardken’s technology; or
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
On 16 August 1995, Caithness’ application for Nadine was granted and certificate 465 was issued.
Under the old Act (the PVRA), the term of a registration was 20 years from the date of acceptance; i.e. until 28 May 2012. The term of registration under the New Act, however, was 20 years from the date of grant; i.e. until 16 August 2015. Elders, Caithness’ exclusive agent for Australia, challenged the Registrar’s conclusion that the term applicable was that under the old Act.
If Nadine had actually been registered before the old Act was repealed, s 82 of the new Act meant it would have the longer term of protection (i.e., measured from the date of grant) conferred by the new Act as if it had been registered under the new Act.
Because Nadine had only been accepted when the new Act came into force, however, Lander J has ruled that it did not fall under s 82, but s 83.
Moreover, the drafting of s 83 led to the ‘unfairness’ that Nadine was only entitled to protection for the term applicable under the old Act; i.e. until 28 May 2012.
His Honour refused to apply the principle in Inco Europe Ltd v First Choice Distribution[2000] UKHL 15 and interpret s 83 as if additional words could be read into it to remedy an obvious drafting error:
85 The additional words which should be read in at the end of s 83 are said to be “save that a successful applicant will be granted PBR pursuant to the provisions of the Act”.
86 Assuming this Court had the power to do what the applicant contends, the Court should decline to exercise the power for two reasons which follow from the reasons for the construction that I have suggested. First, it would mean that an applicant who could not comply with s 44 of the new Act would have to be deemed to have complied otherwise the application would have to be refused. That would require some further words to be notionally added. Secondly, the applicant would obtain rights, being PBR, that s 82 contemplates that an old Act applicant should not be entitled. The applicant would obtain the rights which are specifically excluded in s 82(3) and (4). That would be a very odd result. It would mean that an applicant who had been granted plant variety rights under the old Act would be deemed to be entitled to PBR without the rights in s 82(3) and (4), but an applicant who had made an application under the old Act but who had not been granted any rights would become entitled to PBR including the rights under s 82(3) and (4).
87 This is not a piece of legislation which can be redrawn by the Court. The unfortunate result which the drafting error discloses is a matter for Parliament.
Elders Rural Services Australia Limited v Registrar of Plant Breeder’s Rights [2011] FCA 384
Nilay Patel at Thisismynext.com has embarked on an in depth examination of Apple’s new court action against Samsung.
Unlike the spectacularly unsuccessful war against Windows (based on copyright and ‘look and feel’), this action involves:
* patents;
* design patents; and
* trade dress.
The “thing that distinguishes this case from Apple’s other actions against other Android products is the trade dress component (and the piquancy of Samsung being a supplier of major components for the iPhone and the iPad).
Now, this case is not being brought in Australia but, if it were, one would wonder about the trade dress prospects given the clear Samsung branding in light of Parkdale v Puxu and its progeny such as Playcorp v Bodum. The only case where the trade dress got up in the face of clear branding is really the Jif Lemoncase, in which there was survey evidence showing an overwhelming preponderance of supermarket shoppers declaring they had bought a Jif Lemon, notwithstanding the swing tags and other clear branding.
Those cases did not, of course, involve design registrations as well (or the functional patents). And, even on trade dress, Apple’s complaint is at great pains to point out the level of detail at which resemblances can be drawn.
Logan J has granted injunctions against International Hair Care UK’s use of AFFINAGE (and other trade marks) on its global website for (in effect) infringing International Hair Care Australia’s trade marks registered in Australia. The facts throw up the interesting question of what happens when 2 different people own the same trade mark in different countries and try to use it on the internet.
Facts
IHC UK is the owner of the registered trade mark AFFINAGE for hair care products in the UK and 20 other countries throughout the world, but not Australia.
In 1992, Mr Barry, the principal of IHC UK, set up IHC Australia with Mr Jolly. At that time, Mr Barry owned a majority of the shares.
IHC Australia applied for and registered AFFINAGE under the Australian trade marks act for hair care products.
In 2002, Mr Barry sold his then remaining shareholding in IHC Australia to Mr Jolly (and his wife) for $480,000. IHC Australia kept its registered trade marks and, under the terms of the sale, the parties divided up the global rights between themselves. IHC Australia got the rights to AFFINAGE in China, South-East Asia, Australia, New Zealand and the South-West and Western Pacific to the International Date Line; IHC UK had the rights to the rest of the world.
Sometime after this, Mr Barry or IHC UK incorporated a new Australian company, Affinage Salon Professional Pty Ltd, to sell hair care products under the brands A.S.P. and KITOKO.
In August 2010, the parties started legal action in Australia against each other. That litigation was compromised by a deed of settlement the terms of which, amongst other things, included Affinage Salon Professional agreeing to change its name so that it did not include AFFINAGE and IHC UK and its subsidiary undertaking:
not to use AFFINAGE … as a sign in connection with the importation, marketing, sale or manufacture in Australia of hair care products including hair colours and dyes.
In January this year, IHC Australia’s solicitor did a Google search and went to the link for IHC UK’s website at www.affinage.com. At that link, he was presented with a banner AFFINAGE and beneath it in smaller script SALON PROFESSIONAL. There was a “country box” with a drop down list of countries. When he selected “Australia”, he was taken to a page headed “ASP”. Under the “Profile tab” for Australia, there were the following passages:
In 1996 [IHC UK] conceived, created and lunched the premium hair care brand AFFINAGE. Originated as a line of hair colour, the AFFINAGE brand grew rapidly to include [reference to other types of product]… Now we are introducing our exciting new hair care brand, ASP, to the Australian and Asian markets. Having already signed distribution agreements with a number of companies we look forward to fantastic success in 2011.
….
Today our products are sold in over 50 countries – across Europe, Africa, the United States, South America and the Asia Pacific. Our brands are marketed globally by [IHC UK] and through it’s associated companies in the USA and Australia. Global distribution is achieved through a worldwide network of wholesalers and specialist distributors
A map of the world showed markers ASP Australia, ASP USA and identified the UK as Worldwide HQ. If the UK or the USA were chosen, the same information was displayed, but the landing pages were headed AFFINAGE and AFFINAGE, not ASP, was used to mark the countries.
IHC Australia re-commenced proceedings for breach of the undertakings.
Following service of the court documents (no other notice of complaint having been given), IHC UK amended its website.
The landing or home page now looked like:
IHC UK's modified home page
and Australia no longer appeared in the drop down box for countries under AFFINAGE, only under A.S.P.
Findings
Logan J found that the website in both its unmodified and modified form breached the undertaking in the deed of settlement and granted injunctions, amongst other things, requiring the A.S.P. component of IHC UK’s website to be removed from www.affinage.com. In contrast, the Facebook and Twitter links on the home page did not breach the undertakings.
On its true construction, the undertaking required IHC UK not to use AFFINAGE in Australia as a trade mark (at [61]). This required that IHC UK not use AFFINAGE as a trade mark in a way which targeted Australia.
IHC UK’s use targeted Australia
His Honour recognised that IHC UK was perfectly entitled to use its trade mark in, for example, the UK where it was the registered owner. The problem was to reconcile that entitlement and the global nature of the internet with IHC Australia’s territorial rights in Australia.
At [59]:
… the reconciliation to which I have just referred is achieved, in terms of the undertaking given in this case, by an approach that finds a use of the nominated words in connection with “marketing” in Australia if the words as so used are downloaded in Australia and there is evidence that the use was specifically intended to be made in, or directed or targeted at Australia.
Unlike the Ward & Brodiecase, that targeting was effected by the country selection box: that was its whole purpose. In the case of the unmodified website (at [60]):
that global web site is, inter alia, directed to or targeted at Australia. That is the whole purpose of the “Australia” option in the drop down box selection offered on the global landing page.
This was also true of the modified website. At [62]:
…. That Australian targeted use on the global landing page controls all that follows when one selects, as did Mr Bennett, the “Australia” option in the drop down box.
It was use as a trade mark
While IHC UK could legitimately say it introduced the brand AFFINAGE into Australia as a matter of historical fact. Its usage of the term went much beyond that.
On the first or unmodified form of the website, the purpose of the profile page or tab in the Australia” section was to persuade people to buy IHC UK’s, “and materially” its Australian distributor’s, products by reference to the AFFINAGE trade mark. At [67], his Honour explained:
When one reads the language of the “Profile” page in context, the repetition of AFFINAGE and the repeated use of “our brands” in conjunction with “worldwide” and “are marketed globally by IHC UK and through its associated companies in the USA and Australia”, the reference to Affinage is not just to a matter of foreign history but part of a current promotion that our goods worldwide, including those offered in Australia, include goods with the AFFINAGE brand. ….
No doubt, part of that context included the fact that one landed on a home page emblazoned with the AFFINAGE banner. But, his Honour, as in the Mantracase, was troubled by the repetitive use of the trade mark and, particularly, the representation that “Our goods “are marketed globally … in the USA and Australia”. His Honour also made the point that nothing on the profile page made it clear that IHC UK no longer held the rights to AFFINAGE in Australia.
The modified version of the website, featuring both the AFFINAGE and A.S.P. trade marks, was much closer to the line. Despite the separation between the 2 marks and the removal of Australia from the drop down box for AFFINAGE, however, Logan J considered it was still using AFFINAGE to target Australia in a trade mark sense. At [70]:
The “setting” for the viewer of this global landing page has undoubtedly changed and changed in a way that seeks to create a discrete Australian “target”. What remains though is a determined endeavour to place AFFINAGE in the mind of the viewer who has an interest in reading further in relation to Australia. The Australian “target” remains on the global landing page as a fixed feature. A connection between the AFFINAGE brand product and the ASP brand, each formulated by IHC UK is promoted and promoted to an Australian viewer. What the global landing page does not say is that IHC UK has no connection with the AFFINAGE brand in Australia. Instead, the overall “setting” is that there is an Affinage world brand in which the Australian province is known as “A.S.P.”. This, in my opinion, remains a use of that sign in Australia in connection with marketing contrary to the terms of the undertaking.
Accordingly, IHC UK was ordered to remove :
Australia from the drop down country box;
the A.S.P. pages from its website
any references to Australia from its website; and
any links between any new A.S.P. website and the AFFINAGE website.
FCR O35 r11(2)
For those interested in procedural matters, Logan J refused to follow the Ucorpruling and concluded that FCR O35 r11(2) conferred a power only; there was a discretion whether or not to award an injunction once it was shown the terms of the undertaking had been breached.
International Hair Cosmetics Group Pty Ltd v International Hair Cosmetics Limited [2011] FCA 339
Mr Bohdan Zograf has very kindly translated the IPwars post on Telstra v PDC into Belorussian for the benefit (one hopes) of everyone in Belorussia interested in IP!
Those of you with the appropriate linguistic skills can see it here.
