Love was not in the air – Part 2

In a previous post, we looked at why Perram J held that Glass Candy’s “Warm in the Winter” and Air France’s “France is in the Air” reproduced a substantial part of the musical work in Love is in the Air, but not the literary work comprising the lyrics.

A further set of issues his Honour had to untangle was which acts involving the streaming and downloading of Warm or France infringed and who owned those rights.

You will recall that Glass Candy are an American electronic duo based in America who, in 2011, released “Warm in the Winter”. Glass Candy wrote and recorded “Warm in the Winter” in the USA. They made it available for streaming and download on, first, the Big Cartel website and then the IDIB website.[1] They or their rights management agent, Kobalt, also made the recording available through iTunes / Apple Music, Google Play, Youtube, Spotify etc.

Subsequently, Glass Candy provided a version of “Warm in the Winter” to Air France for use by the latter in its Air France: France is in the Air promotional campaign. Until this litigation started, Air France used “France is in the Air” in TVCs and radio advertisements in 114 countries (but not Australia), posted the advertisments on its Youtube channel (which could be downloaded from Australia) and, if you rang up its office from Australia and all its customer service operators were tied up, for its “music on hold” service.

Infringement, or not

Having found that Warm and France reproduced a substantial part of Love, Perram J turned to determing which conduct engaged in by Glass Candy, Kobalt and Air France actually infringed any copyright in Australia and who owned those rights.

In summary, Perram J held that:

(1) the streaming and downloading of Warm from the Big Cartel and IDIB websites infringed the copyright in Love;

(2) the streaming and downloading of Warm from the streaming services iTunes/Apple Music, Google, Play, Spotify and Youtube did not infringe copyright as it was licensed; and

(3) the playing of France to Australians via Air France’s music on hold service did infringe, but the streaming and downloading via Youtube did not.

The infringing acts

The streaming of Warm to Australia and its downloading by subscribers in Australia entailed a number of acts:[2]

(1) the making and recording of Warm;

(2) the uploading of a copy of Warm on to the servers of each streaming service;

(3) the making available of that copy to be accessed by end-users in Australia;

(4) the streaming of the recording to someone located in Australia; and

(5) in the case of downloads, the downloading of a copy of Warm on to the end user’s computer (or smart device) in Australia.

Making and recording – the reproduction right

The making and recording of Warm and France did reproduce a substantial part of Love but, having taken place in the USA (or the USA and France), were not infringements of the copyright in Australia.[3]

There does not appear to have been evidence about where the servers of the streaming services such as iTunes / Apple Music, Google Play, Spotify or Youtube were located, but Perram J was not prepared to assume they were in Australia. So loading the copy on to the streaming service’s server was not an infringing activity either.

Making the recording available to be accessed – the communication right[4]

Although storing the copies on the streaming services’ servers was not a reproduction implicating Australian copyright, Perram J considered that Glass Candy’s acts of communicating the copies of Warm to the streaming services (uploading them) could infringe copyright in Australia and the acts of streaming and downloading in Australia would be damage suffered by the copyright owner in Australia. At [376], his Honour said:

…. That act of infringement seems to me to occur by communicating Warm to iTunes (and if it had been proven the other online music services). That was the infringement. Each time thereafter that the streaming service raised revenue by streaming or downloading Warm that was evidence of the damage suffered by the Applicants or the profits made by Glass Candy. Viewed that way, whether the streaming and downloading of Warm from the online music services is a contravention is irrelevant.

From the context, however, it appears that that act of communicating the copy to the streaming service(s) was not an infringement alleged against Glass Candy. I am not sure how that “infringement” would work, however, given his Honour’s further findings.

The alleged infringements the subject of the proceeding

That left as infringing acts being pursued by the Applicants:

(1) the streaming of Warm to Australians from the Big Cartel and IDIB websites – an exercise of the communication right;

(2) the making of the copies of Warm by users in Australia from the Big Cartel and IDIB websites – an exercise of the reproduction right; and

(3) the streaming of Warm to Australians from the streaming services – also an exercise of the communication right;

(4) the making of the copies of Warm by users in Australia from the streaming services – (at [276]) an exercise of both the communication right (by the streamng service) and the reproduction right (by the end-user); and

(5) in the case of France, the playing of “music on hold” to callers from Australia.

These allegations gave rise two problems: (a) who was the owner of the relevant right and (b) what licences of these copyrights had been granted. The issues that arose are a good illustration of the kind of tracing the chain of title fun the long term of copyright requires you to engage in to make sure you have identified the right person as the copyright owner.

In summary, Perram J found that Boomerang had no standing to sue anyone for infringing the communication right as it was not the owner of the relevant copyright; APRA was. Boomerang was the owner of the copyright in respect of the reproduction right, but its interest was partial or concurrent with AMCOS’ interest as the exclusive licensee of that right.

However, the streaming and downloading from the streaming services, iTunes / Apple Music, Youtube, Google Play and Spotify did not not infringe as those services held licences from APRA and AMCOS for those acts.

The copyright and ownership – a chain of title history

Harry Vanda and the late George Young – the Easybeats, Flash in the Pan – composed Love is in the Air in 1977.

In 1978, they assigned all their copyright in the literary and musical works comprised in Love to Alberts.

Subsequently, in 2016, when Alberts sold its business to BMG, it excluded from the sale the back catalogue of songs written by Vanda, Young and a third member of the Easybeats, Stevie Wright. Alberts instead assigned these rights to Boomerang – a new company owned by members of the Albert family.

However, in 1972 Vanda and Young had become members of the Australasian Performing Right Society (APRA), the collecting society for public performance rights and, as it was before the introduction of the broadly based communication right[5] by the Copyright Amendment (Digital Agenda) Act 2000, the cable diffusion right.

When Vanda and George Young became members of APRA, like everyone else who becomes a member, they assigned to APRA the exclusive rights:

(a) to perform in public; and

(b) to transmit via a diffusion service,

in all of their existing copyrights and any copyright works made in the future while still a member of APRA.[6]

So, the rights in Love is in the Air assigned by Vanda and Young to Alberts did not include the public performance or diffusion rights, as they had already been assigned to APRA.

An interesting point to note here is that the assignment to APRA in 1972 was not an assignment of the broad communication right, as there was no such right under Australian law at that time. Further, the repeal of the diffusion right and its replacement with the broad communication right did not affect that earlier assignment. The earlier assignment did not catch, however, the broader rights encompassed in the communication right, apart from the diffusion service, when the broader right came into force as the terms of the assignment were limited just to the diffusion right.

After the assignments from Vanda and Young, Alberts had also entered into agreements which affected the rights of reproduction and communication.

In 1986, Alberts had entered into a licence with AMCOS granting AMCOS the exclusive rights to authorise the making of records from the Alberts catalogue, including Love. Over time this was amended so as to include the making of digital records. The exclusive licence included the right to authorise the making of reproductions for the purposes of broadcasting in Australia. There were, however, three exclusions from these exclusive rights: they did not extend to making reproductions for inclusion in advertisements, or cinematographic films for the purpose of being broadcast in Australia. They also did not extend to licensing a number of named record companies.

In 1992 and again in 2005, Alberts had also entered into assignments with APRA. The 2005 assignment included an assignment of the right of communication to the public (introduced by the Digital Agenda Act in 2001).

Finally in 2016, after the assignment from Alberts of its copyright in Vanda, Young and Wright works, Boomerang also granted an exclusive licence over its copyright to AMCOS and assigned its public performance and communication rights to APRA.

At [299], Perram J found Boomerang and AMCOS had mutually abandoned the earlier licence granted by Alberts and replaced it with the 2016 licence.[7] The 2016 licence granted AMCOS exclusive rights to authorise reproduction of Love to make records, for digital downloading and communication to the public. AMCOS was not licensed to authorise use of Love in advertisements or synchronisation into a film.

A summary

So, at [326] and [342] Boomerang had no standing to sue Glass Candy or Air France in respect of any streaming or the playing of ‘music-on-hold’ as APRA was the owner of the relevant rights.

Boomerang was the owner of the reproduction right (at [334] – [335], [342]), but its interest was concurrent with AMCOS as the exclusive licensee under s 119 and s 120. AMCOS of course also had concurrent rights under those sections.

Which acts of streaming / downloading infringed?

The straightforward case on infringement was the streaming and downloading from the Big Cartel and IDIB websites. The position of iTunes / Apple Music, Google Play, Spotify, Youtube was complicated by licences those entities had from APRA and AMCOS.

iTunes / Apple Music, Spotify et al.

The evidence showed that sales of Warm through Apple’s services amount to $85.41 (although some of these were probably to the Applicants’ solicitors).

Perram J held that the streaming and downloading of Warm from these services did not infringe as they held licences from APRA and AMCOS which permitted these acts.

In January 2010, Apple Pty Ltd had entered into a licence agreement with APRA and AMCOS. By cl. 9.1, the licence was a non-exclusive licence to:

(a) reproduce AMCOS Works;

(b) authorise the reproduction of AMCOS Works;

(c) communicate in the Territory the APRA Works (including authorising their electronic transmission from Your Digital Music Service to Your customers);

(d) authorise Your Affiliates to communicate the APRA Works to customers in the Territory as necessary in the course of providing the Digital Music Service,

in the form of Downloads (whether by You, or Your customers in the Territory, onto storage devices) for the purpose of Sale or to complete a Sale, including in the form of Clips provided at no charge for the sole purpose of demonstrating the Clip to customers and potential customers of Your Digital Music Service …

Love was included in the APRA and AMCOS Works.

Perram J held that the rights to reproduce and communicate to the public included the rights, not just to reproduce or communicate the whole of Love, but also a substantial part of it through the operation of Copyright Act 1968 s 14. As Warm and France reproduced a substantial part of Love, they were covered by the licences. At [352], his Honour explained:

Because Love is in the AMCOS and APRA catalogues it follows that since 2010 Apple has been fully licensed to provide digital streaming and downloading of Love. And because the doing of an act in relation to a work is taken by s 14 of the Copyright Act to include a reference to the doing of that act in relation to a substantial part of the work, it also follows that Apple has at all material times been licensed by APRA and AMCOS to make available for streaming or digital download a substantial part of Love. Of course, the Applicants’ principal contention in this case is that making Warm available for streaming or digital downloading involves the communication or reproduction of a substantial part of Love. However, it would appear that iTunes is lawfully entitled to make Warm available for streaming or downloading even if it does involve a communication or reproduction of a substantial part of Love. Consequently, the Applicants can have no possible case against Apple for making available Warm for streaming or downloading from iTunes.

Similar conclusions followed in respect of the other streaming services which also had licences with APRA and AMCOS.

As Apple did not infringe by streaming or authorising the downloading of Warm, so also Glass Candy could not be liable for authorising the (non-)infringement.

There was an additional wrinkle on this part of the case. Kobalt admitted there had been streaming from Google Play, Spotify and Youtube, but Glass Candy did not. Perram J considered the evidence did not actually establish there had been streaming or downloading from these services so, if the licences did not cover these activities, Kobalt alone would have been liable by reason of its admissions.

The Big Cartel and IDIB websites

The evidence showed that Warm had been downloaded 12 times for $11.50 in revenue from Big Cartel and only once from IDIB. There were also payments to Kobalt Australia of $266.60 from AMCOS and $366.43 from APRA. Warm was still being advertised for sale for $1 from the IDIB website.

The position of downloads from the websites Big Cartel and IDIB was straightforward. The evidence showed Padgett uploaded Warm or caused it to be uploaded and Ida No received payments from time to time from the sites. Therefore, at [348] they were liable for authorising the communications to the public and downloading from those websites.

The position of streaming was more complicated. Padgett and Ida No had licensed their distribution / streaming rights to BMI in 2010. APRA’s own records recorded BMI as the owner of copyright in Warm for the public performance and communication rights. IDIB had also licensed streaming rights in relation to its website to Kobalt US. At [390], this meant that the person liable for authorising the streaming from the idib website was either BMI or Kobalt US, neither of which was a party. The receipt of royalties by Kobalt Australia from APRA was not sufficient to find it liable for authorising the streaming.

I am not sure why, if Padgett and Ida No had licensed their rights to BMI or Kobalt USA, they were nonetheless not liable for authorising infringing conduct by those entities or authorised by them.

Air France

The case against Air France for streaming promotional videos from Youtube failed because of Youtube’s licence from APRA for the reasons Apple’s licences protected streaming and downloading. There was still liability for the music-on-hold, however, as Air France did not hold a licence from APRA.

Remedies

Glass Candy contended that any damages would be de minimis and so relief should be withheld.

At [432] Perram J rejected this argument. First, his Honour found that the copying of Love had been deliberate so the infringements were flagrant. That meant additional damages may well be awarded. In addition, his Honour anticipated that the compensatory damages award might not be so modest:

Further, whilst it is tempting to think that the damages might be limited by the apparently modest infringements I have found, the Respondents (other than Kobalt) will no doubt have to deal with a contention by the Applicants that their damages should be assessed on a foregone licence basis. Without wishing to lend colour to that contention, damages on that basis may not be so modest.

[Boomerang Investments Pty Ltd v Padgett (Liability)][2020] FCA 535[8]


  1. Italians Do It Better – a record label jointly owned by Padgett (aka Johhny Jewel) and a DJ, Mike Simonetti.  ?
  2. Similar analysis applies to the uses of France by Air France which, additionally involved the transmission of France via a diffusion service to callers on hold.  ?
  3. As noted in my previous post, Perram J may have been interested in exploring whether or not an Australian court could hear and determine questions of infringement under US law.  ?
  4. Copyright Act 1968 s 31(1)(a)(iv): the exclusive right to communicate the work to the public.  ?
  5. Copyright Act 1968 s 31(1)(a)(iv): the exclusive right to communicate the work to the public.  ?
  6. Of course, that would not apply to copyright which had been assigned to someone else before becoming a member of APRA.  ?
  7. As Alberts successor in title, Boomerang was bound by the terms of the 1986 licence granted to AMCOS: Copyright Act 1968 s 196(4).  ?
  8. The applicants’ subsequent attempt to have the Reasons revised or to re-open their case was given short shrift.  ?

Apple can’t register APP STORE as a trade mark in Australia

Yates J has rejected Apple’s attempt to register APP STORE in Australia as a trade mark for retail store services featuring computer software provided via the internet or for use on handheld mobile devices and the like.

Apple applied to register APP STORE in Australia on 18 July 2008 for retail store services featuring computer software […] in class 35 and related services in classes 38 and 42, TM App No 1252301. The application claimed Convention priority from 7 March 2008. Apple’s “App Store” launched in Australia on 11 July 2008 – that is, one week before the application was filed – with the release of the iPhone 3G. The Registrar rejected the application on the grounds that the trade mark lacked any inherent capacity to distinguish and, there having been no use prior to 11 July 2008, it was not factually distinctive of Apple as at the claimed Convention priority date.

Yates J, as noted, has rejected Apple’s “appeal” on the basis that APP STORE is not capable of distinguishing the services specified in the application.[1] As one would expect, his Honour’s decision provides an excellent tutorial on how one should approach questions arising under s 41 including, apart perhaps from questions of onus, the new form.

The relevant date

Yates J held that capacity to distinguish fell to be assessed at the filing date of the application not, as the Registrar contended based essentially on s 72, on the priority date applicable as a Convention application. This was potentially significant as there had been no use of the trade mark at the priority date, but there had been at least one week’s use at the filing date.

Capacity to distinguish

Yates J began by pointing out that whether something has inherent capacity to distinguish depends on the occasion and circumstance. It turns on both the nature of the particular mark itself and also the nature of the particular goods or services specified in the application.[2]

To overcome the Registrar’s rejection, Apple relied on evidence from a linguistics expert, analysis of internet usage on Google Trends and in the Internet Archive and a Newspoll online survey

Apple’s primary argument was that the expression “app store” could not be fully understood by simply combining the meanings of its component parts “app” and “store”. At [88]:

…. In other words, the combination “app store” does not have a “compositional” meaning. According to him, “the compound APP STORE can only be fully?understood non?compositionally”. ….

The argument here was that, while the term “app” had been used as “clipped” form of application since 1985, that usage was restricted to specialised computer circles. In addition, the word “store” meant a physical place where one went to buy goods or services: Apple’s App Store introduced a new meaning: an online, virtual “place” where one did not so much buy things as a “licence” to use software. That is, in more traditional terms, the expression is at best “allusive” rather than directly descriptive.

On the evidence, however, Yates J found that both “app” and “store” had relevantly well-understood descriptive meanings in the relevant sense for the general public at the filing date. There was evidence at [121] – [123] that before the filing date “app” had been used in 83 articles in publications such as PC World, Technology Review, Rolling Stone and Atlantic Monthly to refer to software applications running on PCs in the Windows environment. At [181], his Honour found:

well before 2008, the word “app” had a well-established and well-understood meaning as a shorthand expression for computer software that is application, as opposed to operating, software. I do not accept that, at the filing date, this use of the word was restricted to computer experts. I am satisfied that it was the received meaning for many interested users of computer software and certainly for those involved in the trade of supplying computer programs, including by retail.

and at [190]:

I am not persuaded that the word “store”, as used in APP STORE, ushered in a new meaning of that word. On the evidence, I am satisfied that, at the time that Apple applied for the APP STORE mark, the word “store” had a well-established and well-understood meaning among traders and the general public that was not confined to the traditional notion of a physical store, but extended, as well, to an online store for the provision of goods or services.

His Honour gave as examples Amazon.com’s launch of its e-Books store in 2000, its software download store launched in 2001 and Apple’s own iTunes Music Store launched in 2003.

Consequently, his Honour concluded that members of the public seeking to acquire application software at the filing date would have understood APP STORE to be no more than a description of a trade channel. It had no inherent capacity to distinguish:

I am satisfied on the balance of probabilities that, at the filing date, members of the public seeking to acquire application software would have understood APP STORE as no more than an expression to describe a trade channel – a store – by or through which application software could be acquired. The fact that the “acquisition” would have involved the acquisition of rights by way of licence does not, in my view, bear upon the matter.

Even if Apple was the first to use the combined expression, which Yates J does not seem to have been convinced it was, “the words in combination bore no more than their ordinary signification when applied to the designated services in Class 35.”

While his Honour drew on the Full Federal Court’s ruling in Oro / Cinque Stelle overturned by yesterday’s ruling in the High Court, these factual findings of what the terms and combined expression would mean to members of the public, unless somehow overturned, would appear to be fatal to any appeal.

Acquired distinctiveness (secondary meaning)

Yates J considered the evidence on acquired distinctiveness “opaque”. There was no real evidence about how the press releases issued with the launch of the store were used or of any other advertising or promotional steps undertaken. His Honour was prepared to accept that people had done internet searches in the week following launch of the term “app store” and “perhpas many persons” had come to associate the App Store service with Apple, but that was not enough.

The Newspoll survey

The Newspoll survey was drawn from an online pool of people who were willing to participate in market surveys for reward. It disclosed that some 65% of participants associated the term “App Store” with a particular company or brand[3] and at least 88% of those nominated Apple as the company or brand. There were at least 2 main problems with this survey. First, it was conducted in 2011 – 3 years after the relevant date – “well after the relevant period” at [223]. Secondly at [224] – [231], applying cases like Woolworths v BP and Chocolaterie Guylian, it was not enough to demonstrate that the expression APP STORE was associated with Apple; it was necessary to show the nature of that association was to identify the trade source of the product – i.e., as a badge of origin.

The ‘pro-active’ role of the Registrar

Apple criticised the active role the Registrar took in this case: going to the lengths of filing her own expert evidence in answer to Apple’s expert and relying on affidavits provided by solicitors acting for Microsoft. Such an active role is indeed unusual in such appeals. Yates J, however, did not accept that the Registrar’s role could fairly be described as “partisan”. His Honour pointed out that the Registrar is entitled to appear as a party and what role she should take when doing say would depend on the circumstances of particular cases:

In the present appeal, a large body of evidence, including expert evidence, was adduced by Apple. The Registrar was not bound to accept either the completeness or the correctness of that evidence. If, as here, there was a genuine alternative case available on the facts or evidence which materially qualified the case brought by Apple, then that alternative case could only be advanced by evidence adduced by the Registrar in the appeal, including by way of expert evidence, bearing in mind the nature of the proceeding as a hearing de novo. I do not think that the Registrar should be criticised for advancing a case for the Court’s consideration. To deny the Registrar that opportunity would be to deny the Court the opportunity to make findings on an appropriately-informed basis. This is not to encourage the Registrar, as a party to such an appeal, to make the case before the Court more factually complex or extensive than it need reasonably be or to take other than appropriately measured steps in the conduct of the litigation. Quite clearly, appropriate judgment must be exercised in considering what evidence is truly necessary, and what forensic decisions should be taken, to fulfil the Registrar’s role, which must be to take reasonable steps under the Act to protect the public interest in respect of the registration of trade marks in Australia. I do not think that the Registrar has over-stepped the mark in this case. ….

Apple Inc. v Registrar of Trade Marks [2014] FCA 1304


  1. This too was decided under the “old” form of s 41 not the new form introduced by the [Raising the Bar Act][rtb].  ?
  2. Although not referred to specifically by his Honour, this is well illustrated by “North Pole” in respect of “bananas” in contrast to, say, “Whopper” in respect of hamburgers.  ?
  3. There was considerable variation among age groups: 90% of those aged 18 to 34, 81% of those aged 35 to 49 and 60% of those aged 50 to 64.  ?

Apple and that ITC ban

Well written piece in The New Yorker outlining the role of the US International Trade Commission in patent disputes and President Obama’s veto of the ITC’s order to block imports of “older” Apple products.

Mind you, make sure you are not eating your cornflakes over breakfast or sipping your decaf skinny latte when you get to the paragraph:

Samsung’s lawyers may take their talents to Seoul, Tokyo, London, or other venues in which home-court advantage is increasingly important ….

Prof. Wegner apparently saw it differently.

Lid dip: Miguel Belmar

The price of digital downloads in Australia

Big week for parallel imports last week:

(1) the US Supreme Court declared US law applies a doctrine of international exhaustion for copyright material

(2) Adobe, Apple and Microsoft fronted the Australian Parliament to explain why digital “things” cost so much more in Australia than elsewhere (i.e., the USA).

Apple’s defence said, amongst other things, it was the price it had to pay to the owners of Australian copyright – lovely chart here. Other reports (with more analysis) here and here (which may be challenges Apple’s explanation a bit for its own products).

That didn’t really work as an explanation for Adobe, which gets lambasted here.

Perhaps, just maybe, treating digital downloads as a single global market might lead to some lowering of prices, but the beauty of digital delivery (from the content owner’s perspective) is that you can set your price and the customer can buy or not.

Is there a link between (1) and (2)?

In his analysis, Prof. Goldman sets out a number of reasons why he thinks Kirtsaeng, while it may provide some good news in terms of lower prices, will have only a short term effect.

(I suppose we can trumpet the fact that our technological protection measure protections don’t extend to protecting region coding (here and here), although I do wonder how one would prove that was the purpose of the (ac)tpm.)

Compulsory licensing of patents

The Assistant Treasurer has referred the operation of the compulsory licence regime within the Patents Act 1990 to the Productivity Commission for review.

At present, sections 133 to 140 of the Patents Act provide for applications to be made to the Federal Court for a compulsory licence to work a patent where

(i) the applicant has tried for a reasonable period, but without success, to obtain from the patentee an authorisation to work the invention on reasonable terms and conditions;

>(ii) the reasonable requirements of the public with respect to the patented invention have not been satisfied;

(iii) the patentee has given no satisfactory reason for failing to exploit the patent; or

the patentee has contravened the anti-competitive provisions in Part IV of the Competition and Consumer Act 2010.

The Terms of Reference require the Productivity Commission to:

  1. Assess whether the current Australian provisions can be invoked efficiently and effectively to deal with circumstances where reasonable requirements of the public are not being met or where the patentee engages in anti-competitive conduct. This includes, but is not limited to, consideration of concerns that gene patents may hinder access to affordable healthcare, including access to medical advice that relies on the identification and use of gene sequences related to human health and disease.
  2. Advise on the frequency, and impact, of the issue of compulsory licences in comparable markets and the common features in such compulsory licenses.
  3. Recommend any measures that may be required to efficiently and effectively exercise these safeguard provisions and invoke their use in a manner consistent with Australia’s international obligations, without limiting access to overseas technologies, technology transfer, research and development investments or substantially reducing the patent incentive for innovation.
  4. Recommend any alternative mechanisms deemed necessary to ensure that the balance between incentives to innovate and access to technology best reflect objectives of ensuring reasonable access to health care solutions, maximising economic growth and growing the Australian manufacturing industry.
  5. Recommend measures to raise awareness of these provisions and their purpose, including the specific challenges of raising awareness among small businesses and the healthcare sector.

The genesis of the reference seems to lie in the uproar resulting from the attempt to charge licence fees for diagnostic kits based on the BRCA 1 patent and, more recently, the smartphone wars.[1]

A number of submissions to the Senate’s Community Affairs committee claimed that there were a range of deficiencies with the present scheme. In addition, IP Australia told the Senate’s Community Affairs committee when it was investigating these (and other matters) that, in the 100+ years our law has had such provision, there had been only 3 applications for the grant of a compulsory licence. The ALRC had also recommended that the scope of ‘reasonable requirements of the public’ be clarified (the recommendation to make the competition test a basis for licensing having been sort of implemented when s 133(2)(b) was inserted in 2006.

The Terms of Reference also note that Australia is a net importer of technology with, for example, only 1,178 (or 8%) of the 14,557 patents granted in 2010 being granted to Australian residents.

The TRIPS Agreement allows us to do something in this sphere. See art. 40 and art. 27.2 even goes so far as to allow us to exclude from patentability things necessary to protect ordre public “including to protect human … life or health”.

Of course, the multi-million dollar question in all of this is what that elastic word “reasonable” might mean?

Do also note paragraph 4 of art. 40, which gives a country that is concerned its nationals are being prejudiced by the exercise of such rights an “opportunity for consultations”. Of course, such a country might just move straight to the dispute resolution processes. I wonder how a more liberal use of compulsory licensing, or the threat of it, would play with those of our trading partners who consider compulsory licences of patents to be anathema?

According to the Productivity Commission’s website:

1 an issues paper will be released in August;
2 initial submissions will be due by 28 September;
3 there will be a draft report released in early December;
4 public hearings will be held in February 2013; and
5 the final report will be delivered to the government on 29 March 2013.


  1. According to the Press Release amongst other things: “Of concern to government is a perception that patents over genetic technologies, or a perceived lack of licences to use these patents in Australia, unreasonably restricts or delays patient access to medical advice based on the latest diagnostic tests. Other areas of sensitivity include climate change mitigation, food security and alternative energy technologies, and technical standards essential patents (for example, in telecommunication technologies).”  ?

Apple and Samsung in the High Court 3

As is well known by now, the High Court dismissed Apple’s application for special leave to appeal from the Full Federal Court’s dissolution of the interlocutory injunction against the Samsung Galaxy Tab 10.1. This means that Samsung can legitimately offer the Galaxy Tab 10.1 for sale in Australia pending trial and subject to an undertaking to keep full accounts.

The transcript of the High Court hearing (French CJ, Gummow and Bell JJ) is now up. In refusing special leave, French CJ said on behalf of the Court:

The organising principles upon which applications for interlocutory injunctions are determined are set out in O’Neill and, as is emphasised in those passages, the governing consideration is that the requisite strength of the probability of ultimate success depends upon the nature of the rights asserted by the plaintiff and the practical consequences likely to flow from the grant of interlocutory relief, the reference to “practical consequences” including the considerations which are present where the grant or refusal of an interlocutory injunction, in effect, disposes of the action in favour of the successful party on that application.

This appears to have been a case where the decision on the interlocutory application effectively would determine the outcome of the dispute, hence, as the Full Court emphasised, the requirement for a reasoned examination of the strength of Apple’s case. ….

That is, as both parties accepted the interlocutory injunction was effectively final relief in that the Galaxy Tab 10.1 would be well and truly superseded by the final resolution of the case (including any appeals), Apple needed to demonstrate a strong case for infringement.

While the High Court panel accepted the judge hearing an interlocutory injunction might not always be expected to forecast the outcome of the case at the interlocutory stage, the practical consequences in this case meant that was necessary. In undertaking that exercise, the Full Federal Court had made no error of principle (and, unsurprisingly, the High Court was certainly not going to engage, at this stage, in claim construction and reviewing the evidence).

Apple Inc & Anor v Samsung Electronics Co. Limited & Anor [2011] HCATrans 341

Apple v Samsung in the High Court 2

Apple’s application for special leave to appeal from the Full Federal Court’s decision to discharge the interlocutory injunction granted by Bennett J will be heard on Friday, 9 December 2011 in Sydney.

In granting the stay on the Full Federal Court’s orders, Heydon J pointed out that the fact that 2 experienced patent judges had reached opposition conclusions, in circumstances which his Honour characterised as the appeal court not disturbing Bennett J’s findings of fact, indicated Apple’s case was not without some prospects of success.

Perhaps more interesting at the level of tea leaf reading, Heydon J expressed his personal concern that no expedited final hearing was ordered in this case:

Secondly, to my mind at least, it is deeply troubling that there was no expedited final hearing in this case. Precisely why there was not, on my perhaps limited acquaintance with the materials, is a somewhat murky question. But why it is that no expedited final hearing took place and how the courts below dealt with the fact that no expedited final hearing took place is a matter of some public interest in the sense in which Ms Howard was using that expression and is a matter which may be thought worthy of close investigation on the special leave hearing.

The Full Federal Court appeared to discount Samsung’s resistance to an expedited hearing.

Apple Inc v Samsung [2011] HCATrans 326

Apple and Samsung in the High Court

The High Court has extended the stay on the Full Federal Court’s dissolution of the injunction against Samsung’s Galaxy Tab 10.1 for another 7 days.

Samsung gets Oz injunction discharged

The Full Federal Court (Dowsett, Foster and Yates JJ) has allowed Samsung’s appeal from Bennett J’s decision and discharged the interlocutory injunctions against the Galaxy Tab 10.1.

On a first read, it looks like a “close run” thing. It also appears the grant of (interlocutory) injunctions for patent infringement in Australia may well be increasingly influenced in the future by the sorts of issues highlighted by the US Supreme Court in KSR v Teleflex (although that case was not referred to).

A factor which appears to have played high importance in the Full Court’s thinking was the recognition (by both parties) that the awarding of the interlocutory injunction in this case was effectively final relief:

49.   In the present case the parties accept that the orders made below are effectively final in that the commercial viability of the Galaxy Tab 10.1 in the Australian market will be lost. We doubt whether the grant of interlocutory relief in the present case avoids frustration of the Court’s process. When one keeps in mind that the Court must seek to do justice to both parties, such a consequence for Samsung can hardly be described as other than a frustration of the Court’s process. In our view, the task facing her Honour was not simply to grant or refuse an injunction. The task was to protect the Court’s process from frustration, as best as could be done in the circumstances, following the guidelines laid down by the High Court in the cases to which we will refer in the next section of these reasons. An “all or nothing” outcome was unlikely to produce that result.

Followed at [50]:

In this case, given the primary judge’s findings as to the merits of both parties’ cases and the even weighting attributed by her Honour to the relevant factors under consideration in her assessment of the balance of convenience, an arrangement which shared the risk of loss was the best that could be done to avoid frustration of the Court’s process, at least in the absence of any conduct by either party which effectively made it the author of its own misfortune. The question, then, was whether Samsung’s conduct in refusing an early trial on the conditions offered, together with whatever may be made of the “eyes wide open” factor and the fact that Apple relies on two patents rather than one leads to the conclusion that Samsung should be denied a trial on the merits. …. (emphasis supplied)

then [51]:

…. Where the merits and the question of convenience are fairly evenly balanced, there will be no injustice in requiring that the party seeking relief demonstrate good prospects of success before imposing almost certain prejudice on the other side.

The strength of Apple’s case

Apple argued that Samsung’s importation and sale of the Galaxy Tab 10.1 would infringe:

Claim 6 provided:

6. A touch panel having a transparent capacitive sensing medium configured to detect multiple touches or near touches that occur at a same time and at distinct locations in a plane of the touch panel and to produce distinct signals representative of a location of the touches on the plane of the touch panel for each of the multiple touches, the transparent capacitive sensing medium comprising:
a first layer having a plurality of lines that are electrically isolated from one another and formed from a transparent conductive material; and
a second layer spatially separated from the first layer and having a plurality of lines that are electrically isolated from one another and formed from a transparent conductive material, the second conductive lines being positioned transverse to the first conductive lines, the intersection of transverse lines being positioned at different locations in the plane of the touch panel, each of the conductive lines being operatively coupled to capacitive monitoring circuitry,
wherein the first layer and the second layer are disposed on two sides of an optically transmissive member.

On this part of the case, the question was whether or not either or both of 2 layers in the Galaxy Tab 10.1’s screen (described as layer D and layer E) satisfied the requirement of “an optically transmissive member”.

While not finally deciding the point, the Full Court considered that Apple’s case on this point was unlikely to succeed:

121.  It is sufficient for us to express the view that, on the present state of the evidence, there is a real and substantial prospect that the importation into and supply in Australia of the Galaxy Tab 10.1 will not infringe claim 6 of the Touch Screen Patent. We have referred to a number of difficulties that confront Apple in making good its case on infringement. It may well be that, on a final hearing, Apple will meet these difficulties. But difficulties they are. Whilst we would not be prepared to say that Apple’s case on infringement is not open to be argued, the difficulties to which we have referred do affect the assessment at the present time of the probability that, if on a final hearing the evidence remains the same, Apple will be found to be entitled to final injunctive relief for infringement of that claim. If Apple has established a prima facie case at all (which we doubt), it is founded upon a construction argument which, if the evidence remains as it is, is unlikely to succeed at trial.

On the other hand, Samsung’s case on the alleged invalidity of claim 6 equally fell short (of course, Samsung would not be liable for infringement if it holds the line on Apple’s positive obligation to prove the infringement):

  1. It is not necessary at this point to resolve the debate between the parties as to whether the reference in the Leeper Article about detecting the presence of “multiple fingers” is to multiple fingers at multiple locations or multiple fingers at a single contact point. It is enough to say that there is some reasonable degree of uncertainty about what the Leeper Article actually discloses in that regard. Moreover, even if one were to assume that the article is referring to the detection of multiple touches or near touches that occur at the same time and at distinct locations in a plane of the touch panel – which on the present state of the evidence would be a generous assumption – there is, importantly, no apparent disclosure in the Leeper Article that the ClearPad is configured to produce distinct signals for each of the multiple touches that are representative of the location of each of those touches.
  2. In our view it follows from that state of affairs that Samsung has not established a prima facie case that the Leeper Article anticipates the touch panel claimed in claim 6 of the Touch Screen Patent.

Samsung’s case on the “Mulligan patent application” was equally suspect: esp. [149] – [150].

The Heuristics patent:

1. A computer-implemented method, comprising:

at a computing device with a touch screen display,
detecting one or more finger contacts with the touch screen display,

applying one or more heuristics to the one or more finger contacts to determine a command for the device; and

processing the command;
wherein the one or more heuristics perform the functions of:

determining that the one or more finger contacts correspond to a one- dimensional vertical screen scrolling command rather than a two-dimensional screen translation command based on an angle of movement of the one or more finger contacts with respect to the touch screen display; and
determining that the one or more finger contacts correspond to a two dimensional screen translation command rather than a one-dimensional screen translation command, based on an angle of movement of the one or more finger contacts with respect to the touch screen display.

and

55. A computer-implemented method of any one of claims 1 to 26, wherein
the one or more finger contacts correspond to a finger gesture with an initial movement and a subsequent movement, and wherein
the function of determining that the one or more finger contacts correspond to a one-dimensional vertical screen scrolling command rather than a two-dimensional screen translation command includes identifying the entire finger gesture as the one-dimensional vertical screen scrolling command and basing the determination on the angle of movement of the initial movement of the finger gesture, and wherein
the function of determining that the one or more finger contacts correspond to a two-dimensional screen translation command rather than a one-dimensional vertical screen scrolling command includes identifying the entire finger gesture as the two-dimensional screen translation command and basing the determination on the angle of movement of the initial movement of the finger gesture.

The issue here is whether or not the Galaxy Tab 10.1 employs gestures based on “the angle of movement”. According to the Full Court, there was no factual dispute between the parties about how gestures worked (or for those familiar with the “other” system, don’t):

155 There seems to be no dispute that, in the Galaxy Tab 10.1, the process for determining the relevant command is as follows. A first user contact on the screen is detected and an X (horizontal) channel and a Y (vertical) channel are generated around the touch point. The touch panel logic then identifies the location of the user’s second touch point at a pre-defined period of time after the first contact is detected. The location of the second touch point is then compared with the locations of the X and Y channels previously generated by the first touch. The software then interprets this as an instruction for screen movement, relevantly a one-dimensional screen scrolling command or a two-dimensional screen translation command, and then processes the command accordingly.

The Full Court considered it was “difficult to discern” Apple’s reading of its claims in this and so concluded that Apple had not established a prima facie case on infringement: [160].

Balance of convenience factors

The factors considered here were

  • whether Samsung had unreasonably refused a proposal for an early trial;
  • whether Samsung’s conduct in entering the market with its “eyes wide open” to the potential for infringement were disentitling; and
  • Apple’s reliance on 2 patents instead of 1.

As to the proposal for an early trial, the Full Court considered that the various proposals were too shifting, too limited and ultimately too unclear to be operative:

190.  …. Had the offer been of a final hearing on all issues, and had the time for preparation been reasonable, the position may have been otherwise. In the circumstances of this case we cannot see how Samsung’s conduct in refusing the offer of an early trial could properly be weighed in the balance of convenience. In those circumstances we consider that her Honour erred in principle by taking into account that irrelevant consideration.

The Full Court gave careful consideration to the “eyes wide open” contention, but concluded her Honour was right to give it little weight:

196.  …. Finally, in the present case, the most compelling features are the assessments of the strengths and weaknesses of the respective cases and the equality of likely detriment. Other considerations pale into insignificance beside those matters.

The Full Court could not see how asserting 2 patents rather than 1 put Apple in any better position (it might be interpolated: both with the issues identified above).

Samsung Electronics Co. Limited v Apple Inc. [2011] FCAFC 156

Lid dip: Peter Clarke

 

Smartphone patent landscape

Dr Mark Summerfield has an interesting post demonstrating some work he and his colleagues have been doing modelling the ownership of patents in the smartphone space.

In their mobile technology landscape, or themescape, they seek to demonstrate pictorially:

  • Samsung appears to own key hardware patents;
  • Microsoft seems to own most software patents;
  • but Apple seems to have highly strategic patents.

The themescape also seeks to demonstrate that Google was a long way behind, but may be catching up if it gets to acquire Motorola’s patents.

Dr Summerfield does express some frustration:

It is therefore ironic – and some might say more than a little unfair – that Apple should be in a position to frustrate Samsung’s attempts to compete against its iPhone and iPad products, while the FRAND obligations associated with Samsung’s much larger patent portfolio leave it in a strategically weakened position.

In this context, it is hardly surprising that Samsung is in the Federal Court of Australia arguing that it should not be barred from obtaining an injunction against the iPhone 4S on the basis of the FRAND status of the patents which it is asserting against Apple.

But one might equally wonder why Samsung should be allowed to get injunctions on the basis of its so-called FRAND patents (assuming the fair and reasonable royalty is forthcoming) when it apparently volunteered its patents for inclusion into various standards in return for FRAND obligations? This FRAND-type issue has been around since at least the 1980s and led to this basic position.

Foss Patents also has a relatively recent round up of where many of the litigations between the various smartphone manufacturers currently sit.