IP Australia has opened a consultation on the draft Design Law Treaty which will be the subject of a Diplomatic Conference in November.
According to IP Australia’s announcement, most of the text is agreed but the outstanding issues are:
grace periods – namely the periods after public disclosure of the product when you can still seek design registration (Article 6)
whether a procedural treaty should include substantive law (e.g. proposal for term of protection in Article 9bis)
the option for an office to require disclosure when a designer has utilised any traditional knowledge, traditional cultural expressions or biological/genetic resources in the design (Article 3)
whether IP offices should be required to provide an electronic system for design applications (Article 9ter and 9quater)
the assistance WIPO should provide to developing countries (e.g. technical assistance and capacity building for the ratification of the treaty) (Article 22).
Most of these seem unlikely to cause much difficulty for Australia.
The main substantive impact, hiding under the “e.g. proposal for term of protection Article 9bis“, is whether the term of protection should be raised to at least 15 years or Member States can choose to stay at the TRIPS minimum of 10 years. (You will remember six years ago now IP Australia published a cost benefit analysis of Australia raising the term of designs protection from 10 to 15 years.)
A requirement for the disclosure of utilisation of traditional knowledge, traditional cultural expressions or biological/genetic resources would be new – but seems to be the direction policy development is heading in Australia anyway. Of course, a big question will be just what is encompassed by those expressions and the consequences of both disclosure and failure to disclose.
There are also some options about filing requirements such as how many and which representations need to be filed which should be carefully considered if the promises of simplification and efficiency are to be achieved.
IP Australia requires submissions by 22 September 2024. That is a very tight timeframe, no doubt dictated by the fact the Diplomatic Conference is being held in November. As IP Australia has known about all these issues since last November, one might wonder why they are only getting around to consulting now.
O’Bryan J sets out a convenient summary of how the case came to be before him and IPwars has had a few goes including here and here but in case the meaning of “manner of manufacture” for the purposes of the Patents Act 1990 is not tattooed over you heart, a brief recap:
The Commissioner rejected Aristocrat’s innovation patents over an electronic gaming machine (EGM) with a new software-implemented feature game and trigger.
Burley J allowed Aristocrat’s appeal, pointing out it was accepted on all sides that the claims would have been patentable if implemented in the traditional mechanical way rather than software implementation.
The Full Federal Court allowed the Commissioner’s appeal restoring the rejection of the claims. Although agreed in the result, the reasoning was divided. Middleton and Perram JJ held at [26] that it was first necessary to decide if the claimed invention was for a computer or computer-implemented. If so, it was then necessary for the claim to result in an advance in computer technology. In the result (and subject to any appeal to the High Court), after setting aside Burley J’s orders, the Full Federal Court ordered: The proceedings are remitted to the primary judge for determination of any residual issues in light of the Full Court’s reasons including any issues which concern the position of claims other than claim 1 of Innovation Patent No. 2016101967 (referred to at [8] of the reasons of the primary judge dated 5 June 2020) and the costs of the hearings before the primary judge.
The High Court memorably failed to reach a decision, with three judges dismissing the appeal while the other three judges would have allowed Aristocrat’s appeal (a seventh judge was unable to sit). Consequently, under Judiciary Act 1903 s 23(2)(a), the decision of the Full Federal Court was affirmed.
On remitter, Burley J considered he was bound by the Full Federal Court’s decision and ruled that the dependent claims of Aristocrat’s patents were also invalid.
Leave to appeal
As Burley J was hearing and determining an appeal from a decision of the Commissioner, Aristocrat needed leave to appeal to the Full Court under s 158(2).
Often where leave is being sought by the patentee or applicant for the patent rather than an opponent, one might expect leave would be granted as otherwise the patent is dead. As O’Bryan J explained at [50]:
The guidance that emerges from the above cases may be summarised as follows. Section 158(2) evinces a legislative policy against the bringing of appeals against a judgment or order of a single judge of the Federal Court in the exercise of its jurisdiction to hear and determine appeals from decisions or directions of the Commissioner except where the court, acting judicially, finds reason to grant leave. The discretionary power to grant leave is not constrained by express legislative criteria and the Court should not lay down rigid rules that would restrict the exercise of the discretion given the diversity of cases to which s 158(2) will potentially apply. In determining whether to grant leave, it is relevant to consider: whether the decision is attended with sufficient doubt to warrant it being reconsidered on appeal; whether the issues proposed to be raised by the appeal are of general application; and the consequences of a refusal to grant leave – particularly whether the refusal will finally determine the matter. None of those considerations is determinative in and of itself and the considerations are interrelated. The cases make clear that the degree of doubt with respect to the decision that would warrant a grant of leave is affected by the consequences of a refusal to grant leave. In a pre-grant opposition proceeding, where there have been two hearings with the opposition dismissed, and where the opponent of the patent will still be able to institute revocation proceedings, leave to appeal will often be granted only where the opponent has demonstrated a clear prima facie case of error in the decision appealed from. In contrast, where an opponent has been successful such that the decision will be final with respect to the grant of the patent, leave to appeal would ordinarily be granted where the grounds are arguable.
O’Bryan J appears to have had some reservation in granting leave this time around. His Honour described the application as “finely balanced”.
The two main areas that seem to have been particularly troubling were that, as the Commissioner characterised it, the parties had agreed that Burley J’s determination of claim 1 in the first hearing would guide the determination of the other claims. Secondly, the innovation patents in question had expired and Aristocrat still had applications for standard patents covering the same subject matter pending.
Ultimately, his Honour found in favour of granting leave in the “unusual circumstances” of this case.
The factor that appears to have tipped his Honour in favour of granting leave was not just that the High Court had divided 3:3 in its previous decision. O’Bryan J was sceptical that this was just Aristocrat trying to have a “second go”. Rather, the additional factor is how s 23 of the Judiciary Act should apply in circumstances where all six judges of the High Court appear to have rejected the majority view in the Full Federal Court.
At [65], O’Bryan J explained:
Having taken all of the foregoing factors into account, I have determined on balance that leave to appeal should be granted. Ultimately, two factors weigh marginally in favour of the grant of leave: that the effect of the primary judgment is to determine finally that the innovation patents in suit will not be granted, and that the grounds of appeal sought to be raised by Aristocrat are arguable (raising novel questions about the operations of s 23(2)(a) in the unusual circumstances of this case). If Aristocrat is able to persuade an appellate court that the primary judge’s application of s 23(2)(a) of the Judiciary Act in this case was erroneous, Aristocrat should be entitled to have the residual claims adjudicated in accordance with the legal principles that the appellate court determines are applicable.
What happens next
Having been granted leave to appeal, Aristocrat has foreshadowed an application under Judiciary Act s 40 requesting the High Court to hear and determine the appeal without the need for a further hearing in the Full Federal Court. This is of course a very unusual step. In this case, however, the foundational question can really be answered only by the High Court: how does s 23(2)(a) operate when the decision under appeal is affirmed but all the High Court judges sitting on the appeal appear to have rejected the reasoning of the “affirmed” decision?
Who know, we might even get something approaching a settled test for “manner of manufacture” (again).
Ms Skildum-Reid’s application for preliminary discovery against the University of Queensland (UQ) has failed for a number of reasons, the most interesting of which is Derrington J’s ruling that it is likely that a six year statute of limitations applies to infringements of moral rights.
Ms Skildum-Reid is a corporate sponsorship consultant, adviser, speaker and author. Over the years since 2006, she has given presentations at various workshops. In the course of doing so, Ms Skildum-Reid developed one or more slide decks.
In July 2023, Ms Skildum-Reid discovered through internet searches some 15 slide decks with 79 instances of what she considered plagiarism being, or having been used, in two marketing courses being run by UQ.
Through her lawyers, Ms Skildum-Reid wrote to the University stating (amongst other things):
In addition to the egregious and blatant infringement of our client’s Copyright Works, our client considers the unauthorised use of the Copyright Works by the University without any accreditation or reference to her as author (in breach of her moral rights in the Copyright Works) to constitute plagiarism and serious academic misconduct on the part of the UQ staff members who have been responsible for delivering/presenting the UQ Courses.
Correspondence between the parties’ lawyers followed, without resolving the dispute.
Ms Skildum-Reid then brought a preliminary discovery application against the University under both FCR 2011 r 7.22 and r. 7.23. That is, seeking discovery from the University of documents or information to enable her to identify a prospective respondent or, alternatively, whether she had a right to relief against the prospective respondent.
In responding to the application, however, the University provided evidence from the person running the course, a Dr Chien, that she was simply using and updating slide decks provided to her by the University when she took over the course in 2009, some 15 years earlier.
The problem
This evidence caused considerable consternation in Ms Skildum-Reid’s camp. Ms Skildum-Reid wanted to identify who were the person(s) who had prepared the slide decks passed on to Dr Chien.
As those events occurred more than six years previously, Ms Skildum-Reid ran into the limitation of actions provided by Copyright Act 1968 (Cth) s 134(1):
An action shall not be brought for an infringement of copyright or in respect of the conversion or detention of an infringing copy, or of a device (including a circumvention device) used or intended to be used for making infringing copies, after the expiration of six years from the time when the infringement took place or the infringing copy or device was made, as the case may be. (emphasis supplied)
and the University made it plain it intended to rely on s 134(1).
At the hearing of the application for preliminary discovery, Ms Skildum-Reid sought to modify her claims to include infringement of her moral rights.
By this stage, Ms Skildum-Reid had realised that any claims of copyright infringement against whomever had prepared the slide decks provided to Dr Chien were well and truly statute barred. Ms Skildum-Reid’s argument was quite simple. Section 134(1) applies only to infringement of copyright. Infringement of moral rights is not infringement of copyright so, therefore, s 134(1) has no application.
An attempted solution
The argument is that infringement of copyright is defined by ss 36 to 38 in Part III and ss 101 to 102 in Part IV. So, for example, s 36(1) provides in part that “copyright subsisting in a literary, dramatic, musical or artistic work is infringed by ….”[1] (emphasis supplied)
And, further, what constitutes copyright is defined by s 31 “Nature of copyright in original works” in the case of original literary, dramatic, musical and artistic works[2] and ss 85 – 88 in the case of other subject matter. None of these provisions confers a right of attribution or a right of integrity.
Moral rights while subsisting in original works and other (Part IV) subject matter, are not “copyright” and do not arise under Part III (original works) or Part IV (other subject matter). Instead, moral rights arise under Part IX – all the way down in s 189 and following.
These provisions include separate provisions about infringement. So, for example, s 195AO provides:
… a person infringes an author’s right of attribution of authorship in respect of a work if ….
Sections 195AP and 195AQ make corresponding provision for infringement of the moral rights of integrity and against false attribution.
No mention of “copyright” in any of them.
Despite running (in the case of “author’s rights) all the way down to s 195AZO, there is no counterpart to s 134. The Copyright Act does not in terms include a statute of limitations on moral rights claims.
The University, however, sought to invoke the six year statute of limitations on claims of tort arising under Queensland state law[3] which, the University contended, applied through s 79(1) of the Judiciary Act 1903 (Cth):
The laws of each State or Territory, including the laws relating to procedure, evidence, and the competency of witnesses, shall, except as otherwise provided by the Constitution or the laws of the Commonwealth, be binding on all Courts exercising federal jurisdiction in that State or Territory in all cases to which they are applicable.
The State statute of limitations applied
At [40] – [42], Derrington J cited the High Court’s interpretation of the role of s 79 as filling any “gaps” in Federal law by allowing the application of the relevant state or territory law in such cases.[4]
Derrington J could discern nothing in the Copyright Act or the Explanatory Memorandum for the bill introducing moral rights to suggest that a limitations period for moral rights had been deliberately excluded. Accordingly, there was a “gap” and it was generally accepted infringement of copyright, while statute based, was tortious conduct.
Rule 7.22 requires only that the prospective applicant for preliminary discovery may have a claim, not a prima facie case. Derrington J considered, however, it was still necessary to take into account the prospects of success. Pointing out at [53]:
…. It would be productive of wasted time and money to require a person to make discovery of documents to a prospective applicant in circumstances where, if the contemplated action were pursued, it would necessarily fail.
His Honour found that it was unlikely Ms Skildum-Reid would be able to avoid the operation of the Queensland Limitations of Actions Act. Accordingly, her application under r. 7.22 failed. At [54], his Honour concluded:
Here, no answer was provided to the prospective respondents’ submissions that the claims sought to be made would be barred by s 10 of the Limitation of Actions Act. Though there may be arguments that actions for the infringement of statutory intellectual property rights are not tortious in nature so that s 10 of the Act does not apply to them, such arguments would have to overturn long lines of authority to the contrary. The prospect of doing so is unlikely. In those circumstances, the prospective applicant has not established for the purposes of r 7.22(1)(a) that she may have a right to obtain relief against the unidentified previous course co-ordinator or guest lecturer for infringement of her moral rights.
The prospects of a successful claim, or rather the lack of prospects, also meant Derrington J would not have exercised the discretion in favour of ordering preliminary discovery.
Rule 7.23
Ms Skildum-Reid’s application for preliminary discovery under r 7.23 ran into other difficulties. The main problem being, having accused the University of “egregious and blatant” copyright infringement, it was rather difficult to satisfy the requirement that Ms Skildum-Reid had insufficient information to decide whether to sue or not.
Having made allegations in “emphatic and unequivocal terms”, there was nothing in her evidence explaining why she had insufficient information to decide whether to proceed. At [88] – [89]:
…. It might be inferred from her affidavit material that she believes that she has claims against the prospective respondents. However, there is nothing to suggest that her belief is only that she may have claims against them. No statement of uncertainty about the veracity of her anticipated claims, or why that uncertainty might exist, is provided. Further, she did not identify what information she lacked but needed in order to decide whether to start proceedings. (original emphasis)
These were fatal omissions. Whilst it might occasionally be possible to attribute to the prospective applicant the assertions of their solicitor or counsel for the purposes of establishing the reasonable belief, the drawing of that inference can be difficult. It is preferable, on any application for there to be direct evidence of the prospective applicant’s belief for the purposes of subparagraph (1)(a) and of the lack of information which prevents a decision being made for the purposes of (1)(b). Here, none of those matters were addressed in the affidavits relied upon.
Section 101 makes similar provision: “a copyright subsisting by virtue of this Part is infringed by ….” ?
In the case of literary, dramatic and musical works, the familiar rights to reproduce the work in a material form, publish it (for the first time), perform it in public, communicate it to the public etc. ?
s 10 of the Limitation of Actions Act 1974 (Qld). Every state and territory has equivalent legislaton. ?
Rizeq v Western Australia (2017) 262 CLR 1 at [16] (Kiefel CJ) and [90] (Bell, Gageler, Keane, Nettle and Gordon JJ). ?
The Full Federal Court has allowed Redbubble’s appeal from the remedies granted for its eleven infringements of five Hells Angels’ registered trade marks. In doing so, the majority instituted a kind of monitoring and notice and take down system as a “safe harbour” against trade mark infringement. In addition, the Court raised questions about how use of a trade mark on a website overseas may, or may not, constitute infringing conduct in Australia.
Redbubble operates a website at www.redbubble.com. Creators can upload images to the website. Other users can browse the website, select one or more of these images for application to merchandise such as t-shirts and coffee mugs. Once the orders have been placed, Redbubble contracts for the merchandise to be manufactured and shipped to the purchaser. Redbubble provides the payment processing service, it also provides the fulfilment functions including communications such as order confirmation and invoices with the purchaser. Redbubble’s trade marks were on the communications, the goods ordered and the packaging.
The servers for Redbubble’s website, however, are located in the USA and the day to day management is carried out there.
In this round, in two decisions,[1] Greenwood J at first instance had found Redbubble infringed the Hells Angels registered trade marks by 11 transactions. The 11 transactions were trap purchases by Hells Angels Australia’s trade mark officer.
His Honour went on to order declarations of infringement, damages of $8,250 and additional damages of $70,000. His Honour also ordered an injunction in general terms – for example:
Redbubble is restrained whether by itself, its officers, servants or agents or otherwise howsoever, from using the sign being the device described in Declaration 2 …, or any sign substantially identical with, or deceptively similar to, a sign consisting of the device, on the website operated by Redbubble in relation to trade in goods to which the sign can be applied, where such goods are goods in respect of which Trade Mark No. 526530, Trade Mark No. 723463 and Trade Mark No. 1257993 is registered.
On appeal, Redbubble did not challenge the infringement findings but sought to set aside the remedies.
The injunction
At the time of the judgment, creators were uploading to the website some 90,000 new images each day.
Secondly, it adopted what it called a Proactive Moderation Policy. This involved co-operating with rights holders to build up a stock of Reference Content, which it then used to monitor uploads and remove content assessed as too similar. Redbubble had extended the moderation policy to include some rights even without input from the rights owner. As part of this, Redbubble had been developing a software tool, RB Protect, with image matching and optical character recognition capabilities. This tool was limited to identifying identical images and had not yet developed to the point where it could do so in real time.[3]
At the time of the trial, Redbubble was conducting proactive moderation for some 477 rights holders (up from 200 in 2017). It had proactively moderated about two million artworks since January 2017 and terminated over one million uploader accounts.
On appeal, the Full Federal Court split 3:2 on the injunction issue.
All five judges were agreed that the injunctions ordered by Greenwood J were in error because they were not limited to restraining use of the trade marks as a trade marks; i.e., as badges of origin (see e.g Perram and Downes JJ at [213] – [214]).
There was a disagreement whether it was right to describe a trade mark owner who had proved infringement as having a prima facie right to a final injunction, or generally having such a right. Perram and Downes JJ would not have ordered any injunction. Nicholas, Burley and Rofe JJ ordered an injunction but, as noted above, instituted a “safe harbour” scheme based on Redbubble’s moderation policies.
Perram and Downes JJ
Perram and Downes JJ were concerned that describing a final injunction as a prima facie entitlement risked enlarging the trade mark owner’s rights beyond its statutory entitlement under s 20. Their Honours recognised that a final injunction was generally appropriate but emphasised the remedy, albeit statutory, nonetheless retained its equitable nature and was discretionary.
At [224], their Honours considered a good working rule was that an injunction may be refused if:
(a) the injury to the plaintiff’s legal rights is small;
(b) the injury is one which is capable of being estimated in money;
(c) the injury is one which can be adequately compensated by a small money payment; and
(d) it would be oppressive to the defendant to grant the injunction.
Adopting Shelfer v City of London Electric Lighting Co [1895] 1 Ch 287 at 322–323 and an article by Burley J and Angus Lang in (2018) 12 Journal of Equity 132 at 137–142.
The working rule was significant in this case. First, the evidence demonstrated that the only way Redbubble could comply with the usual form of injunction was to cease operating. Thus at [225] complying with the injunction would not just be inconvenient but grossly disproportionate to the right protected.
The remedy was grossly disproportionate because the Hells Angels had not demonstrated any loss and was not likely to suffer loss of any kind. At [226], Perram and Downes JJ explained:
We do not accept therefore that it would be correct to grant an injunction which could only be obeyed by Redbubble ceasing to trade. The shuttering of Redbubble’s business at the instance of a party which has suffered and is likely to suffer no loss of any kind falls within the working rule. If Hells Angels had demonstrated some actual or apprehended loss then the question would be much more difficult. Such a case might be presented by the owner of a trade mark which had a reputation for the exclusive nature of the products to which it was affixed (although there might be many other circumstances generating similar problems). For such a trader, even the intermittent appearance of its marks on Redbubble’s website for short periods of time could cause real harm to that goodwill and this could be so even without any sales. ….
In the “somewhat unusual circumstances of this case”, therefore, their Honours considered it was not appropriate to grant an injunction at all.
Nicholas, Burley and Rofe JJ
While agreeing that the award of a final injunction is discretionary, at [248] Nicholas, Burley and Rofe JJ considered at [248] that describing the right holder as having prima facie entitlement to a permanent injunction is both unexceptional and correct. Their Honours explained at [245]:
But generally speaking, unless the court is persuaded that there is no significant risk of further infringement occurring, or unless there exists some other discretionary reason for refusing the remedy, a final injunction will usually be granted against a party that is found to have infringed.
Further, at [249], their Honours agreed with Perram and Downes JJ that it is not necessary for the right owner to prove it will suffer irreparable harm or that damages will not be an adequate remedy.
It is also not necessary for the trade mark owner to prove that it is more probable than not that the infringer will commit further infringing acts. A final injunction might still be granted even if the Court considers the risk of repetition is “slight” or “negligible”.
In this case, there was admittedly a significant risk of repeat infringements. Indeed, the case itself involved repeat infringements.
Like Perram and Downes JJ, Nicholas, Burley and Rofe JJ considered a general injunction was not appropriate. The risk of repitition, however, meant an injunction was appropriate. Accordingly, at [251] their Honours limited its effects by specifying that the general injunction would not be breached by compliance with the moderation policies. Therefore, the general injunction was qualified:
3 The Appellant will not be in breach of orders 1 or 2 (the general injunction) if:
(a) it maintains a system involving the surveillance of its website at www.redbubble.com (the Website) and the removal of images that might infringe the marks referred to in orders 1 and 2 above which is no less rigorous than that which it had in place as at 24 August 2022 and is referred to in the affidavit of Mr Joel Barrett of that date as “Proactive Moderation”; and
(b) within seven days of an image to which orders 1 or 2 above refers being identified on the Website by the Appellants or its servants or agents, the Appellant removes the image from the Website.
4 Notwithstanding Order 3, the Appellant will be in breach of order 1 or order 2 if, on the First Respondent or the Second Respondent or both of them becoming aware of an image to which such order refers being available on the Website, and notifying the Appellant of the image by sending an email to legal@redbubble.com (or such other email address as notified by Appellant in writing from time to time):
(a) with the subject field ‘Hells Angels Complaint’;
(b) identifying the image by reference to the location of the image on the Website in the form http://www.redbubble.com/people/[username] /works/[work number and name]; and
(c) stating that the First Respondent and/or the Second Respondent considers that the image would breach Order 1, Order 2 or both,
the Appellant fails to remove the image or images from the Website within seven days of such email.
Perram and Downes JJ had considered such a limitation inappropriate as it required Redbubble to comply with its existing policies and, further, would be seen as giving the Court’s imprimatur to those policies.
Nicholas, Burely and Rofe JJ countered that the Order did not require Redbubble to maintain any surveillance system but would reduce the burden and risks of the usual form of injunction and was similar to the “site blocking” orders under the Copyright Act 1968. In addition, their Honours considered the making of the injunction in this form did not preclude a general injunction alone or different remedies in different cases. At [254]:
What injunctive relief (if any) should be granted at the suit of a different applicant who establishes that its rights have been infringed by Redbubble will depend on the right infringed (eg. copyright or trade mark), the circumstances of the infringement and the evidence, including any evidence of the surveillance and moderation policies and practices followed by Redbubble at the time any such proceeding is heard.
Concluding comments
Review of the discussion about use as a trade mark on websites outside Australia and damages will have to await another occasion.
The judicial acceptance of a notice and take down / moderation scheme for trade mark infringement is a significant development as such a scheme has been implemented in Australia only by statutory intervention in the Copyright Act 1968. The development does have echoes of a similar development in the United Kingdom (albeit in a different regulatory regime).[4]
It is important, however, to keep in mind that the Full Federal Court was very conscious of the limited impact of the infringements in this particular case and the Hells Angels’ very limited attack on Redbubble’s argument that it was not feasible yet to develop a system which did more than detect exact image matches as discussed by Perram and Downes JJ at [147] and [161] – [162].
The Hells Angels discovered several new transactions after the initial hearing on liability had been heard and successfully applied to re-open the trial to address transactions 8 to 11. ?
After Burley J dismissed Aristocrat’s remitted claims for innovation patents over an electronic gaming machine (EGM), Aristocrat has now sought leave to appeal.[1]
To recap
Aristocrat had three innovation patents – AU 2016101967, 2017101629 and 2017101097 – for an EGM with a new, free feature game and trigger. The Commissioner revoked the patents on the ground that they not a manner of manufacture on the basis that the substance of the invention was merely a game or the rules of a game.[2]
Burley J allowed Aristocrat’s appeal, finding that the claim 1 was a mechanism of a particular construction and so was a practical embodiment rather than a mere, abstract scheme.
Although it was accepted before their Honours that the claimed invention would be a manner of manufacture if the game had been implemented in a device made in the “traditional” way utlising cogs and spinning wheels rather than software, the Full Federal Court unanimously upheld the Commissioner’s appeal, albeit for different reasons.
As it had been sufficient for Burley J to deal with claim 1 only and Aristocrat contended there were further issues raised by the dependent claims, the Full Federal Court ordered that:
The proceedings are remitted to the primary judge for determination of any residual issues in light of the Full Court’s reasons including any issues which concern the position of [the residual claims] and the costs of the hearings before the primary judge. (emphasis supplied)
Before that could happen, however, the High Court subsequently granted leave to appeal – unusually for that time, on the papers. As I am sure you no doubt recall, three Judges (Kiefel CJ, Gageler and Keane JJ) of the High Court would have dismissed the appeal; three other Judges (Gordon, Edelman and Steward JJ) would have allowed it; Gleeson J was apparently unable to sit.
The High Court being equally divided, the decision of the Full Federal Court was affirmed.[3] Even the the three judges who would have dismissed the appeal, however, appeared to reject the principle propounded by the majority in the Full Federal Court. At [77], Kiefel CJ, Gageler and Keane JJ said:
…. the two?step analysis proposed by their Honours unnecessarily complicates the analysis of the crucial issue. As explained in Myriad, the crucial issue is as to the characterisation of the invention by reference to the terms of the specification having regard to the claim and in light of the common general knowledge. It is not apparent in the present case that asking whether the claimed invention is an advance in computer technology as opposed to gaming technology, or indeed is any advance in technology at all, is either necessary or helpful in addressing that issue. As Nicholas J explained, the issue is not one of an “advance” in the sense of inventiveness or novelty. In conformity with the decision in N V Philips, the issue is whether the implementation of what is otherwise an unpatentable idea or plan or game involves some adaptation or alteration of, or addition to, technology otherwise well?known in the common general knowledge to accommodate the exigencies of the new idea or plan or game. (citation omitted)
As the tied result in the High Court meant the Full Federal Court’s decision was affirmed, that in turn meant that the patentability of Aristocrat’s claimed invention was remitted to Burley J for determination of any residual issues.
On remitter
On remittal, Burley J rejected Aristocrat’s invitation to adopt the reasons of the three Judges in the High Court who would have allowed the appeal.
Burley J considered it was inappropriate to search for a principle, or principles, which a majority of the High Court judges had agreed on. Rather, pursuant to s 23(2)(a) of the Judiciary Act, the Full Federal Court’s decision had been affirmed and, accordingly, he was required to decide the residual issues in accordance with the order remitting those issues to him to be decided in light of the [majority’s] reasons.
His Honour concluded that the additional features specified in the dependent claims did not make any technical contribution that could be described as an advance in computer technology. Therefore, in accordance with the majority’s conclusions in the Full Federal Court, the claims with the additional features were still nonetheless not patentable subject matter.
Although patents are supposed to be available for any inventions in all fields of technology and without discrimination as to the field of technology,[4] Middleton and Perram JJ had ruled at [25] that, in a case of the kind before their Honours, it was not appropriate to inquire whether the claimed invention was a scheme as that “may reduce the richness of analysis called for.” Paradoxically given the narrowness of the approach compared to that of Nicholas J, their Honours held at [26] that the issue fell to be determined by two questions:
(a) Is the invention claimed a computer-implemented invention?
(b) If so, can the invention claimed broadly be described as an advance in computer technology?
In the case of claim 1, the Full Federal Court found that it was only the integers comprising the feature game (see features 1.10 to 1.12 below) that distinguished the EGM from the state of the art. However, the implementation of the feature game did not involve any advance in computer technology and so claim 1 was not a manner of manufacture.
Claim 5 of the 967 Patent
Burley J identified the features of claim 5 of the 967 Patent (as you will appreciate, those numbered “1.” are from claim 1):
(1.0) A gaming machine comprising:
(1.1) a display;
(1.2) a credit input mechanism operable to establish credits on the gaming machine, the credit input mechanism including at least one of a coin input chute, a bill collector, a card reader and a ticket reader;
(1.3) meters configured for monitoring credits established via the credit input mechanism and changes to the established credits due to play of the gaming machine, the meters including a credit meter to which credit input via the credit input mechanism is added and a win meter;
(1.4) a random number generator;
(1.5) a game play mechanism including a plurality of buttons configured for operation by a player to input a wager from the established credits and to initiate a play of a game; and
(1.6) a game controller comprising a processor and memory storing (i) game program code, and (ii) symbol data defining reels, and wherein the game controller is operable to assign prize values to configurable symbols as required during play of the game,
(1.7) the game controller executing the game program code stored in the memory and responsive to initiation of the play of the game with the game play mechanism to:
(1.8) select a plurality of symbols from a first set of reels defined by the symbol data using the random number generator;
(4.1) wherein each reel of the first set of reels comprises configurable symbols and non-configurable symbols and
(4.2) wherein the game controller is configured to assign prize values to each displayed configurable symbol.
(1.9) control the display to display the selected symbols in a plurality of columns of display positions during play of a base game;
(1.10) monitor play of the base game and trigger a feature game comprising free games in response to a trigger event occurring in play of the base game,
(1.11) conduct the free games on the display by, for each free game, (a) retaining configurable symbols on the display, (b) replacing non-configurable symbols by selecting, using the random number generator, symbols from a second set of reels defined by the symbol data for symbol positions not occupied by configurable symbols, and (c) controlling the display to display the symbols selected from the second set of reels, each of the second reels comprising a plurality of non-configurable symbols and a plurality of configurable symbols, and
(3.1) wherein the second set of reels comprises individual reels each corresponding to an individual display position.
(5.1) wherein the game controller is configured to increase a number of free games remaining in response to the selection of one or more additional configurable symbols in at least one of the free games.
(1.12) when the free games end, make an award of credits to the win meter or the credit meter based on a total of prize values assigned to collected configurable symbols.
Then his Honour held:
[135] Having regard to the findings of the majority decision of the Full Court, in my view, the only conclusion available is that dependent claim 5 of the 967 patent provides no additional features that would warrant a conclusion different to the conclusion reached by the majority decision in respect of claim 1 of the 967 patent. Having regard to dependent claim 5 of the 967 patent as set out above, integers 4.1 and 4.2 add features relating to the use of “configurable symbols” in the “first set of reels” for the first or base game identified in integer 1.8. Integer 3.1 adds that the second set of reels identified in integer 1.11 comprises individual reels each corresponding to an individual display position. Integer 5.1 refers to the game controller (identified in integer 1.6) being configured to increase a number of free games remaining in response to the selection of one or more additional configurable symbols in one or more of the free games.
[136] Taken collectively, the additional integers of dependent claim 5 of the 967 patent impose additional features or limitations on the conduct of the game referred to in claim 1. None, to adopt the language of the majority decision at [63], may be said to pertain to the development of computer technology. Each leaves it to the person designing the EGM to do the programming which gives effect to the family of games (or rules) which those integers define.
Aristocrat Technologies Australia Pty Ltd v Commissioner of Patents, NSD506 / 2024, filed on 26 April 2024. As Burley J’s decision is on appeal from the Commissioner, an appeal is not as of right but requires leave: Patents Act 1990 (Cth) s 158(2). ?
Patents Act s 18(1A)(a) and, for standard patents, 18(1)(a). ?
The High Court has refused Jusand’s application for special leave to appeal [1] the Full Federal Court’s affirmation that Jusand’s patent was invalid on sufficiency and support grounds under the Raising the Bar tests.
In refusing special leave, the High Court simply stated:
The proposed appeal does not have sufficient prospects of success. Otherwise, the proceedings are not a suitable vehicle for the point of principle the proposed appeal seeks to raise.
I think Perram J’s reasons in the Full Federal Court were the first detailed consideration of the operation of these “new” provisions at the appellate level and so they will continue to provide guidance on the meaning and application of the sufficiency and support requirements. (Although one wonders if the second sentence of the High Court’s refusal indicates there may still be some doubt.)
Jusand was the owner of Australian Innovation Patent No. 2019100556 entitled ‘Safety System and Method for Protecting Against a Hazard of Drill Rod Failure in a Drilled Rock Bore’. It had sued Rattlejack alleging that Rattlejack’s SafetySpear infringed claim 1 of the Patent. The trial Judge held there was no infringement and also upheld Rattlejack’s cross-claim that the Patent was invalid and ordered revocation.
According to the specification, the usual practice in underground mining is to excavate a shaft under the ore that is to be mined and then drill up from the shaft to the ore. The bore holes can vary in length from 20m to 60m. The bores are drilled by stringing together lengths of hollow steel tube – drill rods – to make a “string” of drill rods or drill string. Because of the forces involved and the variable geology, however, the drill string may break. The broken or loose drill rod components may become stuck or may fall out unexpectedly.
Evidence at the trial[2] indicated that broken drill string sections could be up to 20m long, weighing 500kg. The impact load of such a falling “projectile” would be 67,000kg.
Thus leaving the mine shaft unsafe; all the more so as the broken drill string might fall unexpectedly.
The Patent proposed a system involving an anchor and an impact reduction member to, in effect, plug the bore hole. The impact reduction member could be tapered along its length up the bore hole so that the force of the falling drill component was translated from the vertical sideways to the horizontal and so acted as a braking force.
Claim 1 in terms stated:
A safety system for protecting against a hazard of drill rod failure in a drilled rock bore above horizontal, and especially a hazard posed by a broken drill rod section within the bore, comprising:
an anchor member configured to be fixed in a proximal end region of the bore adjacent to a rock-face; and
an impact reduction member for reducing an impact of the broken drill rod section striking the anchor member in the proximal end region of the bore, wherein the impact reduction member is configured to be located in the proximal end region of the drilled bore and to extend within the bore above the anchor member to be impacted or struck directly by the broken drill rod section falling within the bore.
You will notice that the “anchor member” and the “impact reduction member” are uncharacterised: the material(s) from which they are made are not specified. Although the claim was for an uncharacterised anchor member and impact reduction member, the Specification relevantly disclosed only things made from steel. It was this lack of specification which led the trial judge and the Full Court on appeal to find the Patent was invalid as lacking sufficiency and support.
Perram J’s reasoning
Perram J gave the judgment, Nicholas and McElwaine JJ agreeing.
(a) disclose the invention in a manner which is clear enough and complete enough for the invention to be performed by a person skilled in the relevant art [the sufficiency requirement]; and
…
(3) The claim or claims must be clear and succinct and supported by matter disclosed in the specification.
Perram J began consideration of the issues by noting at [161] that the terms of the section offered no guidance about how much disclosure would be ‘complete enough’ nor what quantum of ‘support’ was required. Accordingly, the meaning of the provisions was ambiguous.
As a result, it was permissible to resort to extrinsic materials to resolve the ambiguities.[3].
Prior to the Raising the Bar amendments, section 40(2)(a) had only required the complete specification, relevantly, to describe the invention fully and s 40(3) had only required the claim to be fairly based on the matter described in the specification.
In Lockwood No 1, the High Court held that these requirements would be met if the patent explained how to perform the invention in at least one way – to make at least one “thing” falling within the scope of the claims. (Perram J noted that under this test the Jusand Patent would be valid.)
In that respect, Australian law had diverged from the law in the UK but the High Court in Lockwood No 1 had explained that was a result of the UK acceding to the European Patent Convention and adopting the different standards sufficiency and support standards rather than fair basing.
Referring to the Explanatory Memorandum, Perram J noted the intention of the amendments had been to overrule Lockwood No 1 and align Australian law with “overseas jurisdictions”, specifically referring to the approach taken in the UK under Patents Act 1977 s 14(3) and (5) and art.s 83 and 84 of the European Patent Convention. Thus, statements in the Explanatory Memorandum included that ‘support’ picked up two concepts:
• there must be a basis in the description for each claim; and
• the scope of the claims must not be broader than is justified by the extent of the description, drawings and contribution to the art.
In light of this his Honour concluded at [172]:
It will be seen therefore that the European and United Kingdom provisions are relevantly the same as ss 40(2)(a) and (3). I would conclude from that equivalence, the clear statements made to both Chambers by the Ministers who moved for the bill’s second reading and the Explanatory Memorandum that the purpose of the amendments was to ensure that the Australian law of sufficiency and support developed along the same lines as the law of the United Kingdom and the members of the European Union (each of which is a signatory to the European Patent Convention).
To determine whether the requirements of sufficiency and support under s40(2)(a) and (3) were met, therefore, Perram J accepted at [186] and [190] – [195] that the eight principles propounded by Lord Briggs at [56] in Regeneron[4] as explained by Birss J in Illumina were appropriate.
Application to Jusand’s Patent
As the anchor and impact reduction members were uncharacterised, there were a range of materials which could potentially be used within the scope of the claims.
In seeking to invalidate the Patent, Rattlejack invoked proposition (vii) from Regeneron:
(vii) Nor will a claim which in substance passes the sufficiency test be defeated by dividing the product claim into a range denominated by some wholly irrelevant factor, such as the length of a mouse’s tail. The requirement to show enablement across the whole scope of the claim applies only across a relevant range. Put broadly, the range will be relevant if it is denominated by reference to a variable which significantly affects the value or utility of the product in achieving the purpose for which it is to be made. (emphasis supplied)
In Illumina at [277] (in what Perram J described at [190] as “a celebrated discussion of a teapot” illustration), Birss J had explained the concept of relevance for these purposes as turning on the technical contribution or inventive concept. Thus, where a hypothetical claim was to a new teapot with a spout shaped in a new way so as not to drip, while the material from which the teapot was made was relevant to its function as a teapot, that was not relevant in the Regeneron sense as what gave the claimed invention value, utility and purpose was the design of the spout.
This in turn required consideration of what made the claim “inventive” and what its technical contribution to the art is.
At [201], Perram J pointed out that these could be two different things. Echoing Hicton’s Patent, Perram J pointed out that the inventive contribution to a claimed invention may be an abstract idea. However, that was not the patentable subject matter. What the monopoly conferred by a patent was granted for was the claimed invention – the practical implementation of the idea.
From this, it followed that the technical contribution to the relevant art was the product claimed or at [205], in the case of a method, the explanation of how to perform the method disclosed in the specification.
As noted above, the first factual finding was that claim 1 was not limited only to anchors and impact reduction members made from steel. It extended to such things made from anything.
However, relevantly, the Specification disclosed only anchors and impact reduction members made from steel.
Next, based on the evidence before her, the trial judge had held that identifying other suitable materials would involve the person skilled in the art in the exercise of inventive skill.[5]
Claim 1 therefore failed both the sufficiency and support requirements.
At [215], Perram J explained:
…. The invention as claimed was the Safety System which disclosed only a method using an anchor member and a tapered impact reduction member made from steel. Its innovative step was the idea of converting downward weight force into lateral braking forces using the interaction of an anchor member with a tapered impact reduction member. Its technical contribution to the art was taking that idea and explaining how to use it in a Safety System utilising steel. I would therefore see the essence or core of the invention, in terms of Illumina, as involving a consideration of each of these concepts.
His Honour explained that the purpose of the claimed invention was to prevent drill rod sections falling into the shaft. Given the potential forces that such a falling drill rod section could generate, the material(s) from which the anchor and impact reduction member were made significantly affected the utility of the system. As the identification of appropriate materials (other than steel) involved inventive effort, the sufficiency requirement was not satisfied.
Correspondingly, the claim was not enabled across its full scope and the claim was not supported by the description. For example, at [222]:
…. The invention as claimed was a Safety System able to be constructed from a range of materials but the specification showed only how to make it from steel. Thus the monopoly defined by the claims exceeded the technical contribution made to the art. Effectively, if this patent were upheld it would confer upon the Appellant a monopoly over a range of Safety Systems which it has simply not invented. This would reward the patentee for something it has not done and it would prevent others of an inventive disposition from discovering how to make ingenious systems of anchor and impact reduction members from other materials including materials not yet known.
A comment
So far as I am aware, this is the first case in Australia in which the sufficiency and support requirements have operated to invalidate a mechanical patent – these requirements typically arising in cases where classes of chemical compounds and the like have been claimed.
(v) A claim which seeks to protect products which cannot be made by the skilled person using the disclosure in the patent will, subject to de minimis or wholly irrelevant exceptions, be bound to exceed the contribution to the art made by the patent, measured as it must be at the priority date.
(vi) This does not mean that the patentee has to demonstrate in the disclosure that every embodiment within the scope of the claim has been tried, tested and proved to have been enabled to be made. Patentees may rely, if they can, upon a principle of general application if it would appear reasonably likely to enable the whole range of products within the scope of the claim to be made. But they take the risk, if challenged, that the supposed general principle will be proved at trial not in fact to enable a significant, relevant, part of the claimed range to be made, as at the priority date. (emphasis supplied)
What will happen in mechanical (or for that matter any other art’s) patents which are not drafted with this precision. For example, to borrow from Birss J’s celebrated teapot example: a patent for a teapot made from a suitable material.
In his Lordship’s hypothetical and unlike Jusand, Birss J assumed the selection of suitable material did not involve inventive skill. That may be sufficient.
As I understand matters, the risk flagged in Regeneron proposition #6 motivated IPTA to file an amicus curiae brief in support of the special leave application.
Dr Claire Gregg and Will Hird at DCC have reported that IP Australia is increasingly raising sufficiency and support objections against such patents. James Lawrence and John Hogan, patent attorneys at, respectively, Addisons and FB Rice provide some recommendations for drafting practices – at least for new applications.[6]
For ease of reference, the eight propositions have been extracted here. ?
At [212], Perram J summarised the trial judge’s reasoning: “Since it was a plausible working of the claims of the patent to carry out the invention in materials apart from steel, the trial judge reasoned that to do so the skilled addressee would need to engage in the two endeavours identified by her Honour at J [475]-[479] (set out above): first, the skilled addressee would need to select a material which would be suitable for the Safety System’s construction having regard to the enormous forces to which it would be subjected during the impact event; and secondly, the skilled addressee would need to design the Safety System having regard to the physical qualities of the material thus selected. As the trial judge explained, this was because different materials had different degrees of elasticity and stiffness (‘modulus’) (J [420]-[427]), different compressive strengths (J [428]-[432]), different coefficients of friction (J [433]-[435]), different degrees of ductility (J [436]-[437]) and different behaviours when it came to shearing and galling (J [438]-[440]), as well as having different melting points (J [441]-[442]) (noting that the impact event generates heat).” ?
James Lawrence and John Hogan, ‘Sufficiency and the Patent Bargain Post-Jusand v Rattlejack: How Much Disclosure is Enough?’ (2024) 135 Intellectual Property Forum 9 at 18 – 19. ?
Reflection upon those European and UK authorities yields the following principles:
(i) The requirement of sufficiency imposed by art. 83 of the EPC exists to ensure that the extent of the monopoly conferred by the patent corresponds with the extent of the contribution which it makes to the art.
(ii) In the case of a product claim, the contribution to the art is the ability of the skilled person to make the product itself, rather than (if different) the invention.
(iii) Patentees are free to choose how widely to frame the range of products for which they claim protection. But they need to ensure that they make no broader claim than is enabled by their disclosure.
(iv) The disclosure required of the patentee is such as will, coupled with the common general knowledge existing as at the priority date, be sufficient to enable the skilled person to make substantially all the types or embodiments of products within the scope of the claim. That is what, in the context of a product claim, enablement means.
(v) A claim which seeks to protect products which cannot be made by the skilled person using the disclosure in the patent will, subject to de minimis or wholly irrelevant exceptions, be bound to exceed the contribution to the art made by the patent, measured as it must be at the priority date.
(vi) This does not mean that the patentee has to demonstrate in the disclosure that every embodiment within the scope of the claim has been tried, tested and proved to have been enabled to be made. Patentees may rely, if they can, upon a principle of general application if it would appear reasonably likely to enable the whole range of products within the scope of the claim to be made. But they take the risk, if challenged, that the supposed general principle will be proved at trial not in fact to enable a significant, relevant, part of the claimed range to be made, as at the priority date.
(vii) Nor will a claim which in substance passes the sufficiency test be defeated by dividing the product claim into a range denominated by some wholly irrelevant factor, such as the length of a mouse’s tail. The requirement to show enablement across the whole scope of the claim applies only across a relevant range. Put broadly, the range will be relevant if it is denominated by reference to a variable which significantly affects the value or utility of the product in achieving the purpose for which it is to be made.
(viii) Enablement across the scope of a product claim is not established merely by showing that all products within the relevant range will, if and when they can be made, deliver the same general benefit intended to be generated by the invention, regardless how valuable and ground-breaking that invention may prove to be.
Judge Manousaridis has had to address whether criticism of the academic skill and rigour of the author of a scientific paper constitutes derogatory treatment in relation to the work. His Honour concluded it was not.
Mr Hoser is the author of a number of papers in which, amongst other things, he describes or identifies new species and/or new sub-species of various animals.[1]
Between 2015 and 2021, the respondents published a number of articles referencing Mr Hoser’s papers and making statements that (amongst other things):[2]
(a) implied the names proposed by Mr Hoser were “unscientific and outside the [International Code of Zoological Nomenclature]”;
(b) accused Mr Hoser of “intellectual plagiarism; unconscionable pre-emptive scientific appropriation of others’ detailed and careful scientific work; and of unscientific and disruptive behaviours”;
(c) identified 86 names created by Mr Hoser which the respondents claimed were unacceptable “nomen rejecta”;
(d) Mr Hoser had repeatedly and consistently circumvented conventional and acceptable standards of scientific taxonomies and nomenclatures.
Mr Hoser contended that the respondents’ statements carried imputations that he was dishonest, unscientific etc. As a result, Mr Hoser contended that the respondents’ articles infringed his right of integrity contrary to s 195AJ(b) of the Copyright Act 1968.
The moral right of integrity
The author’s moral right of integrity is separate from and in addition to the copyright. Section 195AI(2) defines the moral right of integrity as “the right not to have the work subjected to derogatory treatment.”
Section 195AJ defines ‘derogatory treatment’ for this purpose as:
(a) the doing, in relation to the work, of anything that results in a material distortion of, the mutilation of, or a material alteration to, the work that is prejudicial to the author’s honour or reputation; or
(b) the doing of anything else in relation to the work that is prejudicial to the author’s honour or reputation.
Mr Hoser’s argument
Mr Hoser contended that the disparaging statements and comments made by the respondents about his work constituted doing anything else which was prejudicial to his honour and reputation.
What the Judge decided
Judge Manousaridis considered at [42] that the words “anything else” in s 195AJ(b) understood in context required a distinction to be drawn between (1) doing something in relation to the work on one hand and (2) on the other hand, doing something in relation to the ideas or information embodied in the work. Section 195AJ(b) applied only to the former and at [44] not the latter.
His Honour reasoned at [46] that, in the case of literary works, the Copyright Act 1968 created rights in the material form of the writing. Section 31 created economic rights in relation to that material form and s 195AI created moral rights in relation to that form. In addition, copyright extended only to the form of expression of a work, not the ideas or information embodied in the writing.
Thus, in addition to doing something within the scope of s 195AJ(a) which materially distorted, mutilated or altered the work to the prejudice of the author’s honour or reputation, s 195AJ(b) applied to anything:
(a) in relation to the writing itself (for example, displaying the writing); or
(b) in relation to the medium on which the writing is recorded (for example, adding information to or displaying the medium); or
(c) in relation to the (non-written) material form (for example adding information to or displaying the material form).
At [45], Judge Manousaridis illustrated this by the example of a material form of a work which was a tangible good. In such a case, “anything else” applied to any act which had the tangible good as its direct object. That is, doing something to the tangible good or doing something with the tangible good such as moving it or displaying it [in some context].
Mr Hoser’s allegations did not contend that the respondents did anything to or with anything in Mr Hoser’s articles themselves. There was for example no allegation that the respondents had altered or distorted any of Mr Hoser’s texts. Instead, Mr Hoser alleged only that the respondents made statements which impugned his character and qualities as a researcher. These did not constitute derogatory treatment in relation to Mr Hoser’s works as works.
Mr Hoser’s allegations in relation to defamation having been previously dismissed, therefore, the allegations did not disclose a reasonable cause of action and Mr Hoser’s claim was dismissed with costs.
For example “Hoser, R.T. 2013. An updated taxonomy of the living Alligator Snapping Turtles (Macrochelys Gray, 1856), with descriptions of a new tribe, new species and new subspecies. Australasian Journal of Herpetology 16:53–63”. ?
The High Court has unanimously allowed Real Estate Tool Box (RETB) and other parties’ appeals against findings that they had authorised infringements of copyright in Campaigntrack’s “DreamDesk” software.
The High Court made a point of emphasising that whether a person can be found liable for authorising copyright infringement depends on “the proper inference to be drawn from all of the facts of the case.”
I am afraid that, as their Honours said, “It is therefore necessary to set out those facts in some detail.”
Real estate agents use web to print software to quickly and efficiently generate promotional materials advertising the properties on their websites, in brochures and other advertisements.
Biggin & Scott is one such real estate agent.
Back in the mists of time, Biggn & Scott licensed software from Campaigntrack for this purpose. However, Biggn & Scott became disenchanted with Campaigntrack for some reason and in 2015 had switched over to software licensed from DreamDesk Pty Ltd (DDPL) imaginatively named “DreamDesk”.
DDPL’s DreamDesk software had been written for it by an one of its “officers”, Mr Semmens.
Before he wrote the DreamDesk software, Mr Semmens had written the Process 55 software that another competitor, Digital Group,[1] was licensing to real estate agents.
Mr Semmens’ fellow directors in Digital Group formed the view that he had stolen Digital Group’s intellectual property in Process 55 in writing DreamDesk. They confronted him about this and on 26 May 2016 he signed documents admitting the infringements.
Shortly after these documents were signed, Digital Group informed Mr Meissner, the princiapl of DDPL who, the trial judge found, was “shocked” by this revelation. Mr Meissner accepted DDPL could not continue with DreamDesk and set about trying to buy the rights to Process 55 or sell DreamDesk.
Meanwhile, Campaigntrack was unhappy about the loss of customers and set about a campaign to buy out its competitors and so corner the market.
In July 2016, CampaignTrack agreed to buy DreamDesk from DDPL, granting DDPL a licence to keep using DreamDesk until 3 October 2016. Shortly after, CampaignTrack also acquired the rights to Process 55.
Not wanting to fall back into the clutches of CampaignTrack, Mr Stoner from Biggn & Scott met with Mr Semmens on 3 August 2016. At Mr Semmens’s suggestion, Mr Stoner commissioned Mr Semmens to start work on the new software which became known as Toolbox. The letter of instruction stated in part:[2]
You are instructed to build a web to print delivery system that does not breach any other companies IP or ownership, in particular Dream Desk or Campaign Track. …. In simple terms we do not want any thing used that can be claimed as owned by the 2 companies above.
Mr Semmens provided assurances that he could do the job in time and would do so without infringing anyone’s copyright.
To undertake the project, Biggn & Scott and Mr Semmens incorporated RETB. Mr Stoner was the sole director and Mr Semmens was doing the design and coding, with some assistance from some of DDPL’s employees and in a workspace borrowed from DDPL.
On 29 September 2016, CampaignTrack’s solicitor, Ms McLean, emailed Mr Meissner and DDPL warning it had discovered improper access and duplication of code which CampaignTrack now owned and expressing concerns about RETB. The email stated CampaignTrack was prepared to grant a one week extension of DDPL’s licence to use DreamDesk provided it was used “in the ordinary course of business” only and demanding undertakings from all involved that there would be no use of the improperly obtained code.
By 6 October 2016, all the Biggn & Scott and DDPL parties had signed and provided the undertakings to Ms McLean – except Mr Semmens.
On 7 October 2016, Ms McLean advised Biggn & Scott and DDPL that the DreamDesk licence would not be extended beyond 10 October 2016 as Mr Semmens had failed to provide the undertakings.
On 10 October 2016, ToolBox became operational and Biggn & Scott switched its users of DreamDesk over to Toolbox.
In the pre-litigation correspondence that followed, the parties agreed to allow CampaignTrack’s expert, a Mr Geri from Ferrier Hodson, to inspect the Toolbox system and prepare a preliminary report.
On 19 January 2017, Mr Geri delivered his preliminary report. His conclusion was that it was “highly probable” there had been an infringement of CampaignTrack’s copyright in DreamDesk in the development of Toolbox. However, to confirm that opinion, he needed to undertake a forensic examination of the servers hosting Toolbox.
Through Ms McLean, CampaignTrack demanded that Biggn & Scott shut down Toolbox and provide Mr Geri with the requested access. Biggn & Scott refused, instead demanding proof of CampaignTrack’s ownership. The litigation followed.
It was not until 17 June 2018 that Biggn & Scott ultimately stopped use of Toolbox, having introduced a new system in April 2018.
At trial
The trial judge found that Mr Semmens had infringed CampaignTrack’s copyright in DreamDesk by reproducing a substantial part in Toolbox. Correspondingly, the users of Toolbox also infringed CampaignTrack’s copyright when they downloaded the software and ran it to generate their advertising collateral. Mr Semmens was also liable for authorising those infringements.
However, the trial judge rejected CampaignTrack’s cases against Biggn & Scott, Mr Stoner, Ms Bartels, DDPL and Mr Meissner alleging they had authorised Mr Semmens’ and the users’ infringements. As a result, his Honour found that CampaignTrack had not established that either the Biggn & Scott or DDPL parties had authorised either Mr Semmens’ or the users’ copyright infringements.
The Full Court
The Full Court (Greenwood and McElwaine JJ, Cheeseman J dissenting) allowed CampaignTrack’s appeal and found the Biggn & Scott and DDPL parties all liable for authorising infringement.
In the Full Court, the majority accepted that, before 29 September 2016, the Biggn & Scott and DDPL parties did not know about Mr Semmens’ infringing conduct and, until that date, were not obliged to take reasonble steps to avoid the infringements by Mr Semmens.
However, Ms McLean’s letter on 29 September 2016 put the Biggn & Scott and DDPL parties on notice of CampaignTrack’s claims. Accordingly, McElwaine and Greenwood JJ found that the Biggn & Scott and DDPL parties knew or had reason to suspect that Mr Semmens had infringed copyright and failed to sufficient steps to prevent infringements after that date.
(1) Subject to this Act, the copyright in a literary, dramatic, musical or artistic work is infringed by a person who, not being the owner of the copyright, and without the licence of the owner of the copyright, does in Australia, or authorizes the doing in Australia of, any act comprised in the copyright.
So, there is direct infringement by doing one or more of the acts comprised in the copyright (such as reproducing, or communicating to the public, the whole or a substantial part of the work). There is also infringement by someone who “authorises” someone else to do the infringing act(s). In deciding whether there has been authorisation s 36(1A) further provides three considerations that a court must take into account:[3]
In determining, for the purposes of subsection (1), whether or not a person has authorised the doing in Australia of any act comprised in the copyright in a work, without the licence of the owner of the copyright, the matters that must be taken into account include the following:
(a) the extent (if any) of the person’s power to prevent the doing of the act concerned;
(b) the nature of any relationship existing between the person and the person who did the act concerned;
(c) whether the person took any reasonable steps to prevent or avoid the doing of the act, including whether the person complied with any relevant industry codes of practice.
The High Court
At [63] – [65], the High Court referred to the examination of the concept of ‘authorisation’ by Gummow and Hayne JJ in the Roadshow case and confirmed that ‘authorisation’ for the purposes of copyright law had long extended beyond traditional concepts of agency and could be found where there was ‘indifference’.
The High Court also endorsed Gummow and Hayne JJ’s warning that ‘authorisation’ for copyright infringement purposes “is not to be identified by deconstructing the dictionary definitions of notions such as ‘sanction’, ‘approve’ and ‘countenance’.”
Having reviewed four prior High Court judgments, at [77], their Honours explained:
The foregoing survey of authorities demonstrates that what constitutes indifference amounting to authorisation depends upon a close analysis of the facts of each case. Mere neutrality or inattention will not suffice. The quality of the indifference, and the nature of the relationship between the infringer and the alleged authoriser, must be such as to justify a conclusion that there was sufficient involvement in the infringement as to amount to authorisation of the acts constituting the breach of copyright for the purposes of s 36(1) of the Copyright Act. The central factors to consider will be those matters in s 36(1A):[39] the person’s power to prevent the act of infringement; the relationship between that person and the infringer; and whether the person took any reasonable steps to prevent or avoid the doing of the act, including compliance with any relevant industry codes of practice. That necessarily requires consideration of whether a person knows or has reason to anticipate or suspect an infringing act is occurring or is likely to occur.[40] (citations omitted)
and at [88] their Honours posed the issue as what the particular person in the particular circumstances at the particular time (or times) ought to have done:
Proof of an allegation of authorisation by indifference requires findings, supported by evidence, that the person was in a position and had knowledge of facts, matters and circumstances sufficient to give rise to a duty to take reasonable steps to avoid or prevent the doing of an act by another person, or else be liable for the act of that person. That is not a general inquiry. It is directed to a particular state of affairs at a particular time or times. That inquiry requires an assessment of the reasonableness, again supported by evidence, of what the person did, and what the person, in that position with that knowledge, at that particular time or times, ought to have done.
The High Court than concluded that, in the circumstances of this case, the Biggin & Scott parties could not be said to have omitted to take reasonable steps they ought to have taken to prevent infringement. At [45], the High Court identified the primary judge’s unchallenged findings in relation to the Biggn & Scott parties:
(a) Mr Stoner and Ms Bartels trusted Mr Semmens not to infringe the intellectual property rights of DDPL or Campaigntrack P/L in developing Toolbox and they did not want Mr Semmens to misuse intellectual property belonging to others in developing it.
(b) Mr Stoner and Ms Bartels considered Mr Semmens to be a person who had the relevant expertise in building a software system and he could build the system in sufficient time given his expertise. They left the development of Toolbox to Mr Semmens and that was not unusual or surprising.
(c) Biggin & Scott was in a contractual relationship with, and could instruct, Mr Semmens. Its instruction to him was relevantly to build Toolbox without infringing any person’s intellectual property rights.
(d) Given the instructions to Mr Semmens, and that Mr Stoner and Ms Bartels trusted him, there was no independent audit of Toolbox or verification that Mr Semmens had not infringed another person’s intellectual property rights. In all likelihood, neither Mr Stoner nor Ms Bartels turned their mind to consider this.
(e) Mr Stoner did not instruct Mr Semmens to “tamper” with the commit log file.
(f) Mr Stoner, Ms Bartels and Mr Semmens were friends. The payment of Mr Semmens’ legal bills in this matter did not indicate any authorisation of the infringement of copyright.
(g) It had not been established that any of the Biggin & Scott parties knew, or should reasonably have known, that Campaigntrack P/L’s intellectual property had been used to develop Toolbox.
Accordingly, up to the sending of Ms McLean’s letter of 29 September, both the trial judge and all members of the Full Court accepted the Biggin & Scott parties did not know or have reason to suspect Semmens had infringed copyright in making ToolBox. Ms McLean’s letter of 29 September, or subsequent developments, did not change the result.
89 It was not established that the Biggin & Scott parties knew of or suspected Mr Semmens’ infringing acts at any relevant time. Although, following the letter of 29 September 2016, the Biggin & Scott parties had some reason to suspect that the infringing acts might be occurring, and although they had the necessary means to prevent these infringing acts, this Court cannot conclude that they defaulted in some duty of control by failing to take any further action. Given the manner in which the case was conducted at first instance, the Court cannot conclude that the Biggin & Scott parties omitted to take reasonable steps after 29 September 2016, being steps that they ought to have taken to prevent or avoid the infringing acts.
A similar conclusion was reached in relation to Mr Meissner and DDPL even though they made personnel available to Mr Semmens to write the infringing code and provided infrastracture necessary for him to undertake the work.
Some comments
From the outside, it is difficult to assess some aspects of the High Court’s reasoning.
For example, in both [77] and [88], their Honours referred to liability arising where the alleged authoriser knew or had reason to suspect there was an infringer. And, in [89], their Honours accepted that the Biggin & Scott parties had some reason to suspect infringements on receipt of Ms McLean’s 29 September letter. But, the High Court rejected reliance on the letter in this case.
In practice, such letters are typically relied on to fix the alleged infringer with knowledge. In this case, however, the letter immediately led to all the parties, except Mr Semmens, unreservedly giving the undertakings demanded by CampaignTrack. In addition, Mr Stoner and Ms Bartel were friends with Mr Semmens, he had the expertise which they did not, they had repeatedly sought assurances from him that he had complied with his instructions and they were entitled to trust him to carry out their genuine concern not to infringe.
Even so, in many situations, you might very well expect the alleged infringer to be put on inquiry when they learned, as the Biggin & Scott parties did within a few days, that Mr Semmens refused to give the underakings – according to his evidence, because he was concerned it would restrict him from working in his industry.
Likewise, one would often expect a preliminary report from a forensic IT expert would provide a sufficient basis to infer authorisation. The High Court held that it did not in this case:
84 As to the Geri investigation, it is notable that the Biggin & Scott parties permitted it to take place and co-operated with Mr Geri. That is entirely consistent with the Biggin & Scott parties continuing to trust Mr Semmens. Moreover, Cheeseman J was correct to characterise the Geri report as “inconclusive”.[44] Indeed, the “preliminary” conclusion that there was a “high probability” that Campaigntrack P/L’s intellectual property had been used to develop Toolbox was confined to matters already known to the Biggin & Scott parties: namely, that both DreamDesk and Toolbox had been developed by the same person, who had access to both systems during the production of Toolbox. Because Mr Geri could also not confirm his conclusion, there is no sensible basis for concluding that the ongoing faith in Mr Semmens’ compliance with his express instructions had now become unreasonable. …
The forensic IT expert’s opinion, however, was qualified. It acknowledged that many similarities were the sorts of things one would expect anyone in the industry to require and requested further access. Indeed, in the Full Court at [157], Cheeseman J had described the conclusion of a high probability of infringement as “no more than a speculative assumption” – in effect based on the fact that the same person wrote both programs.
As to the Biggin & Scott parties’ refusal to allow the further inspection of Biggin & Scott’s servers, the High Court continued at [84]:
…. it will be recalled that the relationship between the Biggin & Scott parties and Campaigntrack P/L had soured considerably since the refusal to extend the licence for DreamDesk. The Campaigntrack system was a competitor product with Toolbox. No doubt the Biggin & Scott parties saw the attack on them in that light. As such, in defence of Toolbox, they were entitled to insist upon proper proof of Campaigntrack P/L’s claims and to reject what appeared to them to be a fishing exercise. Such conduct is unremarkable in the tousled field of commercial disputation.
This might suggest that an alleged infringer may be entitled to take a robust position in the face of allegations, especially from a competitor with whom there is bad blood. However, in addition to the matters already canvassed, it is important to remember that the High Court’s conclusions are also predicated on references to how the case was run at first instance. On the High Court’s analysis, this meant the conclusions reached by the majority in the Full Court were not open on the evidence.
Finally, it is interesting to note that, in four of the five cases the High Court has considered liability for copyright infringement by authorisation, the High Court has ruled there was no authorisation.[4]
Mr Semmens was, with his brother-in-law Mr Farrugia, a founder Digital Group. By the time of the events relevant to this proceeding, Mr Semmens, Mr Farrugia and a third person, Mr Stewart, were the three directors of Digital Group. ?
The letter is set out in full in paragraph 17 of the judgment. ?
