This is the Bill to enact legislation to make Google and Facebook pay the news media owners for “use” of their news.
For some commentary on the earlier exposure draft, see here.
There have been some notable changes. These include:
When setting the amount of the payment, there will now be a requirement that the value the media organisation receives from having its material “used” by Facebook or Google, as the case may be, is taken into account: see proposed section 52ZZ;
The public broadcasters, the ABC and the SBS, reportedly will be able to negotiate for payment whereas previously they were excluded;
Opinion pieces, not just “news”, may qualify as material the “use” of which must be paid for, not just “news” written by journalists: s 52A
The Channel 9 newspaper reports that the retiring MD of Channel 9 is spitting chips over the inclusion in the value calculus of the benefit the news organisation receives from Facebook’s, or Google’s, “use”.
It still remains far from clear what, if any, rights of the news publishers are actually being “used” and for which payment will be required. What impact, if any, will the definition of “making content available” as including “a link to the content is provided on the service” have on the scope of the communication right conferred by copyright? Similarly, will the inclusion within that definition of “an extract of the content is provided on the service” affect the interpretation of what is, or is not, a fair dealing?
There is a little peep behind the curtain into the sausage making process here.
Meanwhile, media reports indicate the bill will be referred to a Senate committee for inquiry.
Schedule 1: the 12 month ‘grace period’ before the priority date for prior use/publication by or with the consent of the design. Publications by the Registrar of Designs (i.e. on the Register of Designs) or by an equivalent overseas person or body will not be able to claim the benefit of this ‘grace period’. On the other hand, if some third party starts using, or publishes, the design or a substantially similar design after the design owner, there will be presumption that the third party derived its design from the design owner. In other words, if the registered owner is relying on the ‘grace period’, the onus will be on the person asserting invalidity by prior use or publication in the 12 month ‘grace period’ to prove the prior art relied on was not derived from the registered owner or the owner’s predecessor in title.
Schedule 2: will introduce new s 71A to provide an exemption from infringement for persons who start using a design during the 12 month ‘grace period’ introduced by Schedule 1. The exemption will continue to operate after the design is registered. The exemption extends not only to those who actually engage in an otherwise infringing act but also to a person who: had taken definite steps (contractually or otherwise and whether or not in Australia) to do [the otherwise infringing] act…. According to the EM, ‘definite steps’ will not be satisfied by mere ‘initial steps’. The plans must be finalised and the process of acquiring or making all components must have started. Under 71A(4), the person entitled to the exemption may “dispose” of their entitlement so that the exemption passes to the disposee – presumably, it follows from the disposal of the entitlement that the disposer cannot continue to claim the benefit.
Schedule 3: removes the publication option – the nice flowchart of the options for requesting registration and the formalities check is now on p. 23 of the EM.
Schedule 4: will amend s 75 to provide a further ‘innocent infringer’ defence for acts done prior to registration of the design (when the design representations are first published). The amendment will give the Court a discretion not to award damages where the defendant satisfies the Court that, when the infringing acts were done, the defendant was not aware, and could not reasonably have been expected to be aware, that the design application had been filed.
Schedule 5: will give an exclusive licensee standing to sue for infringements. By proposed s 5A, an exclusive licensee will be defined to be as a person to whom the registered owner has granted the exclusive rights in the design. An exclusive licensee may be empowered to sub-license. A person will not be disqualified as an exclusive licensee, however, if their exclusive rights do not include the right to sub-license.
Schedule 6: will empower the Registrar to specify the formal requirements for design applications by publishing notices – these formalities will no longer by specified in the regulations and such notices will not be “legislative instruments”
Repeals “the standard of the informed user” and replaces it with the “standard of the familiar person” adopted in Multisteps.
Will give the Court a discretion whether or not to revoke a registered design on grounds of lack of entitlement unless satisfied in all the circumstances it is just and equitable to do so – this will bring the revocation power on this basis in line with s 138 of the Patents Act.
Will permit revocation on grounds of fraud, false suggestion etc. perpetrated at the examination stage.
Makes provision for ‘revived’ designs where the renewal fees are not paid until after the expiry of the initial 5 year term:
If the renewal fees are paid within 6 months after expiry of the initial term (the so-called ‘renewal grace period’), the registration will be treated as remaining in force and never to have ceased;
But if the renewal fees are paid after 6 months (on the basis of an application for an extension of time), the registration will be treated as having ceased on the expiry of the 5 year term.
The significance of these differences is that a third party should not start using the design in the 6 month ‘renewal grace period’. The protections under s 140 will be available only to persons who start using after the expiry of the ‘renewal grace period’.
Strictly speaking, the exclusive rights conferred by s 10(1)(a) to (e) only. Can anyone think of a rational reason why s 10 confers on the registered owner the exclusive licence to authorise people to do the acts in s 10(1)(a) to (e), but authorising an infringement is not an infringing act under s 71? ?
The Designs Amendment (Advisory Council On Intellectual Property Response) Bill 2020 was introduced into Parliament on Wednesday, 2 December.
At the time of writing the links to the text of the Bill and the Explanatory Memorandum are inactive. You can read, however, the Minister’s Second Reading speech.
Also there has already been consultation on an exposure draft and IP Australia’s response to that public consultation. So we know broadly what is in the Bill, although there were a number of details to be worked out following IP Australia’s response.
the Bill introduces the 12 month ‘grace period’ for design owners who make their designs publicly available before they file their design applications – this was Sch. 1 in the exposure draft. As the Minister pointed out, this will align Australia’s registered design law with “many of our major trading partners” (including the EU and the USA);
the Bill will give exclusive licensees standing to bring infringement proceedings – this was Schedule 4 in the exposure draft. In the exposure draft at least and as with patents, the exclusive licensee had to be the exclusive licensee of the whole right;
the Bill will remove the “rarely used” publication option so that every application will be an application for registration – one consequence of this reform as implemented in the exposure draft was that a design application will automatically proceed to formalities examination and registration 6 months after filing if registration was not requested earlier;
there will also be a prior user defence for a person who commences using a design during the ‘grace period’ before the design application is filed – this was Schedule 2 in the exposure draft;
in addition, in cases where registration is delayed (up to 6 months from the filing date), there will be some sort of “innocent infringer” defence for a person who commences using the design in the period between filing and registration (as it is only on registration that the design representations are published);
there are also “smaller technical corrections and improvements” including revocation of a design for fraud, false representation etc. during certification.
The Minister also indicated the Bill “is just the first stage of the Government’s ongoing program of designs reform, with more improvements to come after further consultation.” According to IP Australia’s consultation page (scroll down), the following matters are still on IP Australia’s Policy Register:
Protection of partial designs – Policy ID 42 This issue apparently has “high priority”;
Protection of virtual, non-physical and active state designs – Policy ID 43 This issue apparently has “high priority”;
Clarify ambiguity in section 19 of the Designs Act – Policy ID 35 A third issue with “high priority”;
(This is in addition to the change from “informed user” to “familiar person”.)
Clarification of ‘registered’ and ‘certified’ designs – Policy ID 37 Also “high priority”;
Some of the amendments proposed in Recommendation 18 of the ACIP Designs Review (18b, 18d, 18e and 18g are not progressing at this time) – Policy ID 45
For the research reports arising from the longer term Designs Review Project, see here.
Debate on the Bill itself has been adjourned to the first sitting day of the next period of sittings – presumably, in 2021.
Lid dip: Genevieve Corish at LexisNexis
When they do appear (presumably in the next few days), they should be accessible from here and/or here. ?
SOE claimed Ms Schwartz and her company, Chuchka, were infringing copyright in the Escape bag as a work of artistic craftsmanship by importing and selling the Chuchka bags. SOE also alleged that the sale of the Chuchka bags was misleading or deceptive conduct and passing off.
Despite Ms Schwartz’ denials, Davies J found that the Chuchka bag was copied from the Escape bag and, if copyright subsisted in the Escape bag, numerous versions of the Chuckha bag would be infringements. SOE did not have a registered design and SOE was selling at least 50 or 60 Escape bags a day. So, subsistence of copyright came down to whether or not the Escape bag was a work of artistic craftsmanship.
The Escape Bag
The Escape bag is a soft, oversized tote bag. It is made from perforated neoprene fabric with handles made from sailing rope which wrap around the body and base of the bag. It also has an internal, detachable pouch made from perforated neoprene and press studs at either end for expansion.
The bags are made by hand. They feature hand punched holes where the rope goes in, a heat seal tape finish along the top line of the bag and other contact points.
The Escape bag was designed over several months of trial and error in 2013 by Ms MacGowan who, with Ms Maidment, is a co-founder and director of SOE.
Ms MacGowan gave evidence that she designed the bag to be both beautiful and practical. She chose perforated neoprene as it was aesthetically pleasing and light:
The bag did not have any lining. I did not want it to have any embellishments. I did not want anything disguising something that was not beautiful. I wanted the whole thing to be beautifully created. I hand cut all the patterns. I wanted the inside to be as beautiful as the outside. I wanted to challenge ingrained ideas that a bag had to be a certain way. My focus was, ‘This is what it is’. I did not want the bag to be like something else. Everything in the design had to be there for a reason. For instance, there was a risk that binding could ruin the curve of the bag. I ended up putting binding on the top edge because I was concerned it would fray. There were a lot of things that I felt strongly about.
Ms MacGowan said she did not want to use leather or webbing for the handles as she considered they did not fit with the design aesthetic. She spent many months with her sewing machine working out how to fix the rope to the bag so it retained its round profile and was not merely glued. Ms MacGowan explained:
It really complemented the neoprene beautifully. And also it was very important that I had to find rope that matched back with the fabric beautifully because it was really about creating an impression of the whole than the individual parts. So that was also very, very important.
Ms MacGowan’s evidence explained design issues she had to confront and resolve including:
how to sew the rope on to the bag rather than glue it;
how to stop the fabric from ripping at pressure points where the rope joined the bag;
stopping the raw cut neoprene edges at the top of the bag from fraying;
reinforcing the pressure points under the press studs and rope entry points;
using a glue lined heat shrink black tubing to fix the rope to the bottom of the bag;
attaching the rope to the four bottom corners which would otherwise be exposed to the risk of damage;
providing a pocket for valuables;
finishing the inside seams to look like the rest of the bag.
Burge v Swarbrick
At , Davies J and counsel for the parties managed to divine nine guiding principles from the High Court’s decision in Burge v Swarbrick to determine whether the Escape bag qualifed as a work of artistic craftsmanship:
(a) the phrase “a work of artistic craftsmanship” is a composite phrase to be construed as a whole: Burge at 357 56, 360 . It is not permissible to inquire separately into whether a work is: (a) artistic; and (b) the manifestation of craftsmanship;
(b) in order to qualify as a work of artistic craftsmanship under the Copyright Act, the work must have a “real or substantial artistic element”: Burge at 356 52;
(c) “artistic craftsmanship” does not mean “artistic handicraft”: Burge at 358 59;
(d) a prototype may be a work of artistic craftsmanship “even though it was to serve the purpose of reproduction and then be discarded”: Burge at 359 60;
(e) the requirements for “craftsmanship” and “artistic” are not incompatible with machine production: Burge at 358–9 59–60;
(f) whilst there is a distinction between fine arts and useful or applied arts, when dealing with artistic craftsmanship there is no antithesis between utility and beauty or between function and art: Burge at 359 61;
(g) a work of craftsmanship, even though it cannot be confined to handicraft, “at least presupposes special training, skill and knowledge for its production… ‘Craftsmanship’… implies a manifestation of pride and sound workmanship – a rejection of the shoddy, the meretricious, the facile”: Burge at 359 61, citing George Hensher Ltd v Restawile Upholstery (Lancs) Ltd  AC 64 (Hensher) at 91 per Lord Simon;
(h) although the matter is to be determined objectively, evidence from the creator of the work of his or her aspirations or intentions when designing and constructing the work is admissible, but it is neither determinative nor necessary: Burge at 360 –65. In determining whether the creator intended to, and did, create a work possessing the requisite aesthetic quality and requisite degree of craftsmanship, the Court should weigh the creator’s evidence together with any expert evidence: Burge at 360 64 and 65; and
(i) in considering whether a work is one of “artistic craftsmanship”, the beauty or aesthetic appeal of the work is not determinative. The Court must also weigh in the balance the extent to which functional considerations have dictated the artistic expression in the form of the work: Burge at 364 83–84.
Having set out the High Court’s statement of principle at 83, Davies J emphasised at  the High Court’s factual conclusion at  in application of that principle:
Taken as a whole and considered objectively, the evidence, at best, shows that matters of visual and aesthetic appeal were but one of a range of considerations in the design of the Plug. Matters of visual and aesthetic appeal necessarily were subordinated to achievement of the purely functional aspects required for a successfully marketed “sports boat” and thus for the commercial objective in view.
The Escape bag was not a work of artistic craftsmanship
Ms MacGowan’s evidence at  was that “the overall appearance of the bag as an object was fundamentally the most important thing.” She explained that “simplicity, beauty and originality” were her guiding principles:
“something free of embellishments, that was so pure in its form, structure and makeup that it embodied beauty in simplicity.”
SOE’s expert, a Ms Beale, agreed; considering the Escape bag “unique”. In cross-examination, however, she accepted that the uniqueness arose from the “decision decision” to use perforated neoprene and sailing rope “rather than in any contribution to the creation of those underlying materials.”
Ms Schwarz’ expert, Mr Smith, considered the use of perforated neoprene and sailing rope to be “strong design features”, but neither of them in itself was “new”. Mr Smith considered that combining 2 or more features that had been in common use over many years “[was] an evolution in styling rather than a completely new design”.
While Davies J reported that the experts agreed the Escape bag was a quality product, at  her Honour reported the experts agreeing that:
the Escape Bag is constructed using a standard construction method of “stitched together and then turned out” and other elements conform to what is generally expected of this style of bag – significant skill, training or knowledge was not required beyond what was expected in the design or manufacturing process”.
Davies J accepted that Ms MacGowan aspired to produce something of beauty, but that was not determinative as, following Burge, whether something was a work of artistic craftsmanship had to be determined objectively. At , her Honour declared that assessment required looking at the bag as a whole and “not by disintegrating the design choices made by Ms MacGowan within the functional limitations of the bag she created.” (emphasis supplied) While Ms MacGowan set out to design a stylish bag, at  her Honour found that “the function and utility of the bag as a carry all bag governed the overall design of the bag.”
Davies J considered on the evidence that significant design features resulted from and served functional considerations.
In the result, Davies J considered that, in designing the Escape bag, Ms MacGowan was not an “artist-craftsperson”: she had no special training, skill and knowledge relating to the design of handbags. The central aesthetic choices were the decisions to use perforated neoprene and sailing rope. Those two choices alone were not sufficient to constitute the resulting bag as a work of artistic craftsmanship.
At  – , her Honour explained:
 I also accept the submission for the respondents that Ms MacGowan did not approach the design and manufacture of the Escape Bag as an artist-craftsperson. She had no special training, skill and knowledge relating to the design and manufacture of handbags and many of the issues she encountered were purely functional in nature – for example, preventing the raw edges of neoprene from fraying, reinforcing the point where the rope handle enters the bag, and how to sew the sailing rope onto the bag while retaining the roundness of the rope.
 Further, I do not regard the selection and use of perforated neoprene as the fabric for the Escape Bag or its use in combination with sailing rope as involving an act of artistic craftsmanship. Both materials were readily available commercial materials capable of being used to manufacture a carry all bag without some particular training, skill or knowledge. At its highest, the use of those materials to make an everyday bag was an evolution in styling. Whilst Ms Beale was of the view the combination of those materials made the Escape Bag “unique” she accepted in cross-examination that the uniqueness to which she referred related to “design decision” to use those materials, rather than in any contribution to the creation of those materials.
At one level, the decision can be seen as raising a high bar for designs applying the “form follows function” theory of design rather the embellishment of embellishment’s sake. That seems to follow, however, from Burge. The suggestion that “revolution” rather than “evolution” is required might also be thought concerning.
While Davies J emphasised at  the functional nature of issues to be resolved, one might question the ways they could be resolved and the aesthetic choices that might be involved.
There may also be troubling aspects of the level of skill required to be demonstrated. The experts agreed that the level of skill exhibited by Ms MacGowan was not “beyond what was expected in the design or manufacturing process”. Are then works of artistic craftsmanship limited only to those exhibiting rare levels of skill? It is important to remember that the point of protecting works of artistic craftsmanship is to encourage real artistic effort by silversmiths, potters, woodworkers, hand-embroiderers and many others whose work does not qualify as a sculpture, engraving, drawing, painting or any of the other categories named in paragraphs (a) and (b) of the definition of artistic work.
In that respect, it does not appear that Ms MacGowan could be characterised as an “artist-craftsperson”. Davies J appears to have considered that the innovation lay in the choice of materials – perforated neoprene and sailing rope – in an otherwise fairly standard bag design. In that case, the result should be uncontroversial especially as the objective was always large scale production.
Nonetheless, the decision highlights yet again the problematic decision to include what was intended to be an expansive, and expanding, category of subject matter as an exception to a defence.
On the “passing off” related allegations, Davies J (mercifully) found SOE did not a reputation in the features of the bag alone reputation. Her Honour also considered, where the competing bags sold for around, respectively, $300 and $100, the branding of the products brought into play the well-known principle from Parkdale v Puxu:
Speaking generally, the sale by one manufacturer of goods which closely resemble those of another manufacturer is not a breach of s 52 if the goods are properly labelled. There are hundreds of ordinary articles of consumption which, although made by different manufacturers and of different quality, closely resemble one another… the normal and reasonable way to distinguish one product from another is by marks, brands or labels. If an article is properly labelled so as to show the name of the manufacturer or the source of the article its close resemblance to another article will not mislead an ordinary reasonable member of the public.
See Copyright Act 1968 s 77 and see paragraph (c) in the definition of artistic work in s 10(1). Copyright was claimed in the first, finished bag Ms MacGowan made or, alternatively, the first 8 bags supplied to the first customer. At , the first finished bag differed from the 8 bags supplied to the customer in that it did not include heat shrinkable tubing, the internal pouch was differently designed and there was no branding. ?
See paragraph 260 of the Gregory Committee report quoted by the High Court in Burge at para. 49 ?
The High Court has handed down its decision in Calidad: by a 4:3 split decision, 150 years of precedent has disappeared into history. Given some time constraints, this is going to be a high level summary only. There are two main areas of significance.
First, the High Court (by majority) has ruled that the sale of a patented product exhausts the patentee’s right to control further exploitation of the product. The right of a purchaser to use and deal with the product does not turn on an implied licence which, being implied, could be excluded by appropriate contractual terms.
Secondly, the High Court has given what is probably its first detailed consideration of what constitutes making a new product (infringing) versus merely repairing it (non-infringing).
Calidad was importing and selling reconditioned Seiko (Epsonm) printer cartridges – that is, used Epsonm cartridges which Calidad’s supplier, Ninestar, had refilled. Seiko sued for patent infringement.
On appeal from Burley J, the Full Federal Court had ruled that the reconditioning amounted to making a new product and so the patent infringed.
In allowing the appeal, the High Court unanimously held that refilling 4 categories of the printer cartridges did not infringe. In these categories, what was involved was simply drilling one or two holes in the cartridge case, injecting replacement ink and sealing the holes again. Thus, they had merely been repaired and did not involve making new products.
All judges also held that a fifth category, which involved the replacement of an unpatented component, a memory chip, with another, was not infringing because it too did not involve making a new product.
By a majority of 4 to 3, the High Court held that the reconditioning of four other categories was also not infringing. Nettle, Gordon and Edelman JJ explained why their Honours dissented on this point at :
Category 5, 6 and 7 cartridges involved the making of new, different cartridges: because the processes used to modify those cartridges included cutting off the interface pattern to make them fit a different printer from that for which they were designed. Relative to each cartridge in its totality, that was such a significant change to the form and function of the cartridges as properly to be viewed as changing each cartridge from the cartridge it had been into a new and different cartridge adapted to a new and different task. When that significant change was combined with the other modifications, there was a making of the patented invention thereby infringing Seiko’s patents.
In contrast, Kiefel CJ, Bell and Keane JJ held:
68 The reprogramming of the memory chip in the original Epson cartridges and the removal of the interface patterns did not constitute the making of a new embodiment of the patented product. It may be accepted that the substitution of an “integrated circuit assembly” was a substantive modification which included the layout of the electrical terminals, but it did not constitute a making. The particular layout of the electrical terminals as defined by integers  to  was not affected by this action. Moreover, as Calidad submits, it was an action undertaken to enable the data in the memory chip to be replaced and the cartridge to be re-used, not to change the layout of the terminals in any way.
69 When all of Ninestar’s modifications to each of the categories of cartridges were completed what remained were the original Epson cartridges with some modifications which enabled their re-use. The modifications did not involve the replication of parts and features of the invention claimed. There was no true manufacture or construction of a cartridge which embodied the features of the patent claim.
70 The modifications to the original Epson cartridges were consistent with the exercise of the rights of an owner to alter an article to improve its usefulness and enable its re-use. Both English and United States authority accept the prolonging of the life of a product to be within an owner’s rights of use of a patented product. Regardless of whether it is said to be something done which is closer to “repair” than “making”, it clearly does not involve a manufacture or making. And this is so regardless of whether the exhaustion doctrine or the implied licence doctrine is applied.
So, in all judgments whether there was an infringing making of a new product or a merely a non-infringing repair involved a qualitative assessment of fact and degree.
On the “second” point, the High Court adopted the doctrine of exhaustion on sale by a majority of 4 to 3: (Kiefel CJ, Bell and Keane JJ, Gageler J agreeing; Nettle, Gordon and Edelman JJ dissenting).
All the judges agreed that the decision on the appeal did not turn on whether the doctrine of exhaustion or implied licence from purchase applied. Thus, the adoption of the exhaustion theory is strictly speaking obiter dicta. Nonetheless, as “seriously considered” obiter dicta it is pretty much binding on all lesser courts in Australia.
Accordingly, when a patentee sells a product protected by a patent the patentee’s monopoly rights of use and sale with respect to a product arising from statute are exhausted on sale.
If you have clients who sell patented products on terms seeking to control how they are used – for example, a field of use restriction – you should be recommending a review of the arrangements to ensure that they are binding as a matter of contract law. And, if your client also sells the products, or licenses others to sell them, you should be considering whether the arrangements expose your client to breach of the cartel provisions or exclusive dealing arrangements in the Competition and Consumer Act 2010.
ps. Thanks to John McPhail for pointing out that my spring racing fever had confused a horse race in Old Blighty with a brand of printers! What was I thinking?
Betts v Willmott (1871) LR 6 Ch App 239; Société Anonyme des Manufactures de Glaces v Tilghman’s Patent Sand Blast Co (1883) 25 Ch D 1; National Phonograph Co of Australia Ltd v Menck (1911) 12 CLR 15 at 28;  AC 336 (PC). A bit more background here. ?
Gageler J in separate reasons agreed with their Honours. ?
Kiefel CJ, Bell and Keane JJ at ; Nettle, Gordon and Edelman JJ at . ?
The Full Court has dismissed Urban Alley’s appeal from O’Bryan J’s rulings that URBAN ALE was invalidly registered as a trade mark and La Sirène’s use of URBAN PALE did not infringe URBAN ALE. The decision may provide some helpful clarification of the test of substantial identity and, perhaps, urges caution against his Honour’s conclusion that URBAN PAEL was not used as a trade mark.
Urban Alley had registered URBAN ALE for beer. La Sirène started selling a Farmhouse Style Urban Pale [beer] by La Sirène under this trade mark:
Not capable of distinguishing
The Full Court upheld O’Bryan J’s conclusion that URBAN ALE lacked any capacity to distinguish as essentially descriptive or laudatory. As Urban Alley had not used the term before it registered its trade mark, it was not registrable under s 41.
This was really just the result flowing from the facts arising on the evidence. So a successful appeal was always a steep hurdle.
Practice tip: if you are going to adopt something as a trade mark, it will be unhelpful to refer to it in marketing materials in terms like:
The signature Urban Ale sits somewhere between a classic Australian golden ale and a Belgian blonde, with pleasant tropical notes but a crisp, clean finish. This is a premium beer for the people and is described as a ‘celebration of our great city, a tribute to the laneway culture and a blend of the old and the new’
Name: Once Bitter Style: Urban Ale (Somewhere between an Aussie Golden Ale and Belgian Blonde) ABV: 4-5%
One could be mistaken for thinking the trade mark was “Once Bitter”!
Deceptively similar to prior conflicting registration
Likewise, Urban Alley was unable to overturn O’Bryan J’s conclusion that URBAN ALE was deceptively similar to a prior registration for URBAN BREWING COMPANY and so invalid under s 44.
On this part of the case, Urban Alley argued O’Bryan J’s reasons for concluding the two marks were not substantially identical were inconsistent with his Honour’s conclusion that they were deceptively similar and so the latter conclusion was wrong.
In relation to substantial identity, O’Bryan J held that the inclusion of BREWING COMPANY in the prior mark conveyed a different meaning to ALE.
The Full Court rejected Urban Alley’s attack at  – :
A side-by-side comparison of two marks is a studied comparison. It highlights the differences between the marks just as much as it shows their sameness, in order to reach a conclusion as to whether the two marks are, in fact, substantially identical. The primary judge’s observation must be understood as having been made in that light.
The test of deceptive similarity is fundamentally different. It is not a studied comparison. Rather, it is a comparison between one mark and the impression of another mark carried away and hypothetically recalled, paying due regard to the fact that recollection is not always perfect.
Thus, when considered from the perspective of deceptive similarity and imperfect recollection the differences which were apparent from a side by side comparison lost much of their significance. In that assessment, Urban Alley’s challenge overlooked the significance of URBAN being the first word of both marks and the close association in meaning of “brewing company” and “ale”. At , the Full Court explained:
The appellant also submitted that there is “no relevant trade mark resemblance” between the words “ale” and “brewing company”. This submission requires careful consideration. As the appellant’s submission recorded immediately above recognises, each compared mark must be considered as a whole. It is impermissible to dissect each mark to emphasise its disparate elements and then compare the disparate elements of each in order to reach a conclusion on deceptive resemblance. To start with, this would leave out entirely the impact of the common element “urban”. It would also ignore the synergy between the word “urban” and the other word(s) in each mark. This synergy contributes to the impression gained of each mark, which is carried forward into the relevant comparison between the two. This last-mentioned consideration brings into play the primary judge’s finding that there was a clear association in meaning between “brewing company” and “ale”. Given that clear association, coupled with use of the common element “urban”, it is understandable that the primary judge reached the conclusion he did on the question of deceptive similarity.
It might be thought that the strong emphasis on the narrow scope of the substantial identity test, requiring a studied side by side comparison, is a very welcome brake on the ruling in Pham Global.
Having ruled that Urban Alley’s trade mark was invalidly registered on two alternative grounds, their Honours pointed out that Urban Alley’s appeal against the finding that La Sirène did not infringe must fail. So, it was strictly unnecessary to consider whether La Sirène’s use of “Urban Pale” would have been an infringement.
Speaking obiter dicta, the Full Court emphasised that O’Bryan J’s finding that La Sirène did not use URBAN PALE as a trade mark, despite its prominence, turned very heavily on the “overwhelmingly descriptive” nature of the expression. At , their Honours said:
Thus, it is entirely possible—indeed likely—that, absent the finding of the Word Mark’s lack of inherent adaptation to distinguish because of the ordinary signification of the word “urban”, the primary judge would have come to a different conclusion on trade mark use in relation to the respondent’s use of the name “Urban Pale” on the depicted label. This is particularly so when regard is had to the prominence and location of the name “Urban Pale”. Such use would normally be regarded as persuasively suggesting trade mark use, a consideration which his Honour seems to have recognised in the next paragraph of his reasons, where he said:
205 It is apparent that the labelling of the La Sirène Urban Pale product features the words “Urban Pale” in large lettering and an emboldened font. It is the most prominent name on the labelling. However … I do not consider that that prominence converts the essentially descriptive name into a trade mark indicating the source of origin of the product.
Even so, it will be necessary to treat the finding that Urban Pale was not used as a trade mark very carefully and confined to its particular facts. On this part of the case, the Full Court concluded at :
Be that as it may be, our resolution of Grounds 1, 2 and 3 of the appeal adversely to the appellant necessarily means that Ground 5 of the appeal should be dismissed, as we have said.
You may have already received notification about this but, just in case, this year’s Francis Gurry lecture will involve a “conversation” with Dr Gurry himself.
Following his recent retirement as Director General of the World Intellectual Property Organisation – or WIPO to you and me, Dr Gurry “will reflect on his 35 years of work within the United Nation’s multilateral system – and what the future holds for IP.”
The talk will be streamed online on 25 November 2020 – 6:00pm AEST. Times in other jurisdictions and registration here. Registration is free.
… out, again. Stewart J has dismissed Monster Energy Corporation’s (MEC) opposition to the registration of MONSTER STRIKE by Mixi for computer gaming.
Mixi Inc. applied to register MONSTER STRIKE as a trade mark in Australia for computer games and software in international classes 9 and 41. MEC lost the opposition before the Registrar and appealed. okMEC argued that, because of MEC’s reputation in its MONSTER marks, Mixi’s use of MONSTER STRIKE for computer games and software would be likely to deceive or cause confusion.
Mixi launched its Monster Strike game in October 2013. By June 2014, there had been 8 million downloads and, by June 2018, more than 44 million downloads. Mixi had discontinued the English language version in 2017, so that the game was available only in Japanese or Chinese after that.
The priority date for MONSTER STRIKE was 27 December 2013, so that was the date MEC’s reputation in MONSTER fell to be determined and assessed.
MEC claimed reputation variously in:
(2) MONSTER ENERGY
(3) MONSTER RIPPER
(4) MONSTER REHAB
(5) MONSTER GIRL
(6) MONSTER ARMY
(7) MONSTER ASSAULT
(8) MONSTER KHAOS
and two stylised “M”s known as the M icon or M claw (illustrated below).
MEC did have trade mark registrations for these in Australia, but the goods and services were not for computer games and software.
MEC had launched the original “Monster” energy drink in 2002, with the product first being introduced into Australia in July 2009.
By the priority date, MEC had sold more than US$19 billion worth of drink in the USA and US$23 billion worldwide. Sales in Australia between 2011 and 2013 ranged from US$27 million down to US$15 million. More than 78 million cans of drink had been sold in Australia; of which 40 million were the Monster Energy Original product. The drinks were sold in Australia in over 10,000 outlets including grocery stores, convenience stores, petrol stations, bars, pubs, cafes and take-away food outlets.
MEC’s main witness conceded that there had not been any sales of Monster Assault or Monster Khaos in Australia before the priority date.
You probably already know what the cans look like, but Stewart J included images of typical get-up:
It was not in dispute that MEC did not provide computer software or games under its trade marks. MEC relied, however, on the fact that most of its advertising and promotional expenditure was spent on endorsements of athletes, gamers and musicians and sponsorships of sports, eSports (that is, competitive video gaming) and music festivals.
Between 2002 and 2013, MEC had spent more than US$2.5 billion on advertising, marketing and promotion. In Australia, MEC had spent US$50 million, with expenditure between 2011 and 2013 being US$31.4 million. Apparently, US$7.15 million was expenditure on athletes, musicians, competitions and other events.
MEC argued the target audience for its promotional activities were 18 –35 year olds, which was the same demographic as for computer games.
In addition to sponsoring the Evil Geniuses eSports team (starting in 2012), MEC had social media pages dedicated to gaming. Its Monster Energy Gaming page on Facebook had been operating since 2010. It had one million likes by the end of 2013; garnering about 10,000 “likes” from Australia each month between June and December 2013. MEC also used the Twitter handle @monstergaming.
There had also been extensive placements of MEC products, merchandise and advertising in video games, including t-shirts or other clothing, billboards and even some characters drinking MEC cans of drink. MEC had also sponsored at least one gaming developer, Ali-A, who had over 2 million subscribers to his YouTube channel.
In addition to the sports or gaming specific activities, MEC also engaged in the conventional provision of hospitality at pubs, sporting events, trade shows, gaming stores. The staff wore branded clothing, drove in branded vehicles and handed out branded samples.
MEC’s website had thousands of visits from Australians. Its main Monster Energy Facebook page had 24 million likes, of which 400,000 were Australians. The Monster Energy Girls Facebook page had 245,000 visits including 21,232 from Australia. There was a Monster Energy Facebook page with 3,450 visits from Australia; the Monster Energy Instagram account had almost 32,000 Australian followers and the main Monster Energy YouTube site had over 80 million views worldwide, with some 3.6 million views from Australia.
What MEC’s reputation was in
Unsurprisingly in the light of this evidence, Stewart J accepted that MEC had a well-established reputation in Australia. However, his Honour considered the reputation was closely bound up with the M claw mark and also generally involved the use of Monster and Energy together in combination.
From over 3,000 pages of written evidence, including photographs, MEC was able to identify only limited instances where MEC had used the word Monster on its own. For example (look closely):
At , Stewart J explained:
Many other cans of Monster energy drinks had the same or a similar slogan printed on them. In each instance the writing is small and the MONSTER® is dwarfed by the device marks which are distinctive and catch attention. I do not consider this use of MONSTER® to have generated any particular reputation for the use of the word MONSTER on its own.
His Honour considered that other references to Monster alone were really shorthand references to Monster Energy, which is “really the brand that has a strong reputation.” Some comments on social media by consumers referring only to “Monster” were similarly shorthand.
Accordingly, his Honour concluded at :
In the result, the evidence does not support a conclusion that the MONSTER word mark on its own had any particularly significant reputation in Australia at the relevant time. Any reputation of the word MONSTER is derived from the M claw, stylised MONSTER and the MONSTER ENERGY word mark. It is these that create the association in the minds of consumers.
MEC’s trade marks Monster Assault, Monster Khaos, Monster Ripper, Monster Army, Monster Rehab had either not been used in Australia or, if used, Stewart J considered there was no evidence to support a conclusion that they had developed a significant reputation in Australia.
Stewart J accepted that MEC reputation was well-known and that its (stylised) Monster marks were associated with a range of eSports-related products and activities. However, that association was as “a sponsor” or “supporter” and not as a provider or publisher of video games themselves. At  – :
 MEC submits that by the priority date, Australian consumers in MEC’s target demographic had a wide awareness of MEC’s Australian marks as emanating from a company with a long-standing and highly active presence in gaming and eSports. It further submits that MEC was strongly engaged with the international gaming community through its dedicated gaming internet sites and social media channels; closely connected with the generation of gaming content creators through its association with eSports athletes, teams and other content creators; and actively involved in the gaming industry through its promotion of, and licensing of its marks to appear in, a number of popular games.
 Those submissions can be accepted insofar as they apply only to the M claw and the words MONSTER and ENERGY in association with that mark. It can also be accepted that the marks were well-known in Australia, and that they were associated with a range of gaming and eSports-related products, programs and activities. However, the nature of that association and hence reputation was as a sponsor and supporter. Very often MEC’s marks, showing its sponsorship, appeared alongside many other well-known marks such as Vodafone, Samsung, Toshiba, Blackberry, Alliance and Pirelli, all apparently the names of co-sponsors. Of those with whom the marks had a reputation, there would have been a keen awareness that the trader behind the marks traded in energy drinks and not in other goods or services. MEC sponsored and promoted gaming and eSports events, and for that purpose it published material about such events, but its marks did not, in my assessment, have a reputation as a brand of origin for the provision of gaming event or publishing services; the reputation remained one of sponsor and promoter.
 In my assessment, an ordinary consumer would understand the presence of MEC’s Australian marks on athlete uniforms, equipment, event signage, apparel and the like to be for the purpose of advertising and promoting MEC’s energy drinks, and not to be functioning as a brand, or a source of trade origin, for the particular equipment, uniform, signage and apparel upon which the marks appear. This is similar to the findings in Qantas at  and . Similarly, MEC’s sampling activities conducted at sports events and other venues, including by the Monster Girls, would be understood by the ordinary consumer to have been conducted for the purposes of advertising and promoting its energy drinks.
No real, tangible danger of confusion
At , Stewart J concluded there was no real, tangible danger that a reasonable number of people would be caused to wonder whether or not MONSTER STRIKE was associated with MEC in some way.
First, Stewart J considered that the very different goods and services was significant. As a result, the risk of confusion was “inevitably very much less” than it might have been if they were “the same or significantly overlapping.”
Secondly, the competing trade marks were distinctively different, bearing in mind the stylised or composite form in which MEC’s reputation lay. “Monster” was part of that form, but MEC had not established a significant reputation in that form.
Correspondingly, MEC’s arguments based on the similar linguistic structure or brand extension failed as its evidence did not establish a reputation in the various extensions – Monster Assault, Monster Ripper, Monster Khaos, Monster Army.
Thirdly, the evidence showed that at least 40 other traders had registered trade marks for or including MONSTER in respect of video games etc. While there was no evidence of any use of these, at , Stewart J was prepared to infer that some of these at least would have reputation. However, this played only “a small role” in reducing the potential for confusion.
Fourthly, the likely public, being young men and women interested in computers and gaming, was “brand-savvy and not gullible or easily confused.”
Finally, there was no evidence of actual confusion.
As the claim under s 42(b) requires demonstrating a likelihood of deception, not just mere confusion or being caused to wonder, you won’t be surprised that it failed too.
Stewart J’s decision is the second in a year or so in which MEC has failed in its attempt to extend its rights from the field of energy drinks into what might be thought rather unrelated fields. The earlier decision, involving an infringement action against Rodney Jane’s use for tyres, is under appeal. I wonder if we have heard the last of this dispute too?
The Full Court has refused Meat & Livestock Australia leave to appeal from Beach J’s rulings to grant Branhaven’s patent for the use of genetic information in the selective breeding of cattle. MLA did not seek leave to appeal the ruling that the claims to uses of the genetic information were patentable subject matter.
In its amended form as allowed by Beach J, claim 1 reads:
A method for identifying a trait of a bovine subject from a nucleic acid sample of the bovine subject, comprising identifying in the nucleic acid sample an occurrence of at least three single nucleotide polymorphisms (SNPs) wherein each of the at least three SNPs are significantly associated with the trait, with the degree of statistical significance being p?0.05, and wherein the at least three SNPs occur in more than one gene; and wherein
[and wherein] (a) at least one of the SNPs corresponds to position 300 of any one of SEQ ID NOS: 19473 to 21982, or
(b) the SNP is about 500,000 or less nucleotides from position 300 of any one of SEQ ID NOS: 19473 to 21982 and is in linkage disequilibrium with the SNP at position 300 with an r2 value of ?0.7.
(The [ ] indicates deletions and the italics insertions from the original claim.)
In his Honour’s first ruling, Beach J held that claim 13 was invalid as a claim to genetic information, but otherwise rejected MLA’s attacks based on manner of manufacture, novelty and inventive step. His Honour, however, found that the claims lacked clarity. So Branhaven came back with the amended form.
In his Honour’s second ruling, MLA argued there was no power to amend and, in any event, the proposed amendments were not fairly based. In the result, his Honour rejected MLA’s attacks and directed the patent in amended form proceed to grant. MLA sought leave to appeal.
If an appeal is made to the Federal Court against a decision or direction of the Commissioner in relation to a patent application, the Federal Court may, on the application of the applicant for the patent, by order direct the amendment of the patent request or the complete specification in the manner specified in the order.
At  and , the Full Court considered the plain meaning of this provision was to confer on the Court power to deal with amendments of patent applications under appeal.
The Full Court considered MLA’s argument that Beach J had decided the appeal in his Honour’s first decision and so was functus officio “untenable”.
Within 14 days of the date of these orders, each of the parties file and serve proposed minutes of orders and short submissions (limited to three pages) to give effect to these reasons, including on the question of any steps necessary to deal with any application to amend the claims of patent application no. 2010202253 and on the question of costs.
The Full Court accepted that this order did not dispose of the appeal and so Beach J still had jurisdiction over the patent application in its amended form. At :
The order made by his Honour at the time did not dispose of the appeal but was instead a procedural order requiring the parties to file and serve proposed minutes of order and short submissions to give effect to his Honour’s reasons including in relation to any application to amend the claims of the patent application. There is no substance to the applicant’s submission that either the publication of his Honour’s first set of reasons or the making of that order brought the proceeding to an end.
However, as his Honour correctly observed, the publication of his first set of reasons did not dispose of the appeal since no order to that effect was made. Nor could the publication of his Honour’s first set of reasons amount to an order disposing of the appeal. His Honour made it clear in his reasons that he would refrain from making any such order until any question in relation to amendment had been dealt with.
The Full Court turned then to the substantive argument about whether Beach J erred in allowing the amendments.
Were the amendments permissible?
As already noted, his Honour had found in his first reasons that the relevant claims lacked clarity. The main issue here was that claim 1 did not explicitly state the requirement of “linkage disequilibrium” (LD) for the relevant single nucleotide polymorphisms (SNPs) or what degree of LD was required: see  –  reproduced at  of the Full Court’s reasons.
As the elements were not disclosed in the claim, MLA argued the amendments were impermissible as they introduced new matter into the claims. Beach J, however, allowed the amendments on the grounds that they were limiting amendments and had been in substance disclosed in the specification.
The Full Court essentially accepted this conclusion on the facts. It did note that, generally, a claim which defined an invention more narrowly than the disclosure in the specification would be fairly based, but there may be some situations where that was not the case. The overriding question was whether the claim described an invention different to the disclosure in the specification. At  – :
All other things being equal, a claim that defines an invention in terms that are narrower than a more general description in the body of the specification would support is not likely to travel beyond what is more generally described. But there may be some situations in which what is more specifically defined results in a claim that travels beyond what is described in the specification: AstraZeneca at 244 and -286 where reference is made to Sir Robin Jacob’s judgment in Dr Reddy’s Laboratories (UK) Ltd v Eli Lilly and Co Ltd  RPC 9 at  and . In these situations a claim may be invalid if the invention more specifically defined is an invention that is different from the invention described in the specification as opposed to some narrower embodiment of the latter.
In circumstances where it can be concluded that there is an implicit disclosure of the relevant feature, it is unnecessary to inquire into whether the feature is truly limiting. But even in the absence of an implicit disclosure, a claim does not necessarily lack fair basis because it includes a matter of detail that is not described in the specification so long as it defines an invention that is not different from the invention described in the specification. The proper characterisation of the invention described in the specification is critical when determining whether the claim is to an invention different from that described in the body of the specification. Each case will depend on its own facts and on the proper characterisation of the invention described in the body of the specification. (emphasis supplied)
If the feature added to the claim was implicitly disclosed in the specification, therefore, the claim could be amended. But, amendment might be permissible even if not implicitly disclosed.
At  – , the Full Court focused on Beach J’s unchallenged findings including, in particular, that the skilled addressee “would understand that the specification requires that there be high or strong LD between the limb (a) SNP and the limb (b) SNP”, but not necessarily a very high or perfect LD. The proposed amendments gave effect to that understanding by reference to more precise rather than some less precise criteria.
The Full Court accepted MLA’s criticism that the specification (before amendment) made no mention at all of r2 values. Beach J accepted expert evidence, however, that the r2 values were broadly equivalent to LD values that might fairly be regarded as high or strong. As a result, its inclusion was permissible. Noting that high LD or strong LD were “less precise criterion” than the expressed r2 vaues, at , the Full Court explained:
…. To hold that it is not open to use the r2 statistic or the 0.7 value for the purpose of ascertaining whether there is a high or strong degree of LD between the limb (a) SNP and the limb (b) SNP would involve, in our view, the very kind of over meticulous verbal analysis that should be eschewed when determining whether a proposed amended claim satisfies the requirements of s 102(1) of the Act. This is particularly so in circumstances where the amendment is propounded for the purpose of clarifying an ambiguity that would otherwise prevent the patent application proceeding to grant. In the present case we do not think the use of the r2 statistic in limb (b) results in a claim that defines an invention different from that which is more generally disclosed in the body of the specification as filed. (emphasis supplied)
As a result, the Full Court came to “the very clear conclusion” that MLA had not made out a clear prima facie case of error where the likely result would be allowing an invalid patent to proceed to grant. Accordingly, leave to appeal was refused.
Since this is a pre-Raising the Bar patent, the old “practically certain” test applies to the opposition. That raises the question whether things would turn out differently in a revocation proceeding on the balance of probabilities. After 949 paragraphs for the first decision and 470 paragraphs for the second, perhaps the “very clear conclusion” language might help discourage that course?
Cargill Inc. and Branhave were joint applicants but in the course of the hearings before Beach J, Cargill assigned its interest to SelecTraits Genomics LLC. ?
Claim 13. An isolated polynucleotide identified according to the method of claim 8. ?
Sch. 3 item 6. Prior to the introduction of this amendment, the appeal to the Court was limited to the form of the specification before the Commissioner in the decision under appeal. If an application to amend was made after the Commissioner’s decision, the application could only be dealt with by the Commissioner: see e.g. Airsense Technology Limited v Vision Systems Limited  FCA 828 ?
IP Australia has published a Consultation Paper on a possible new Geographical Indications Right.
You probably know we are not supposed to call a fizzy or bubbly alcoholic beverage made from grapes “Champagne” unless it comes from that special part of France (that’s France in the EU, not Texas).
This, and a range of other prohibitions, stem originally from the Australia-EU Wine agreement (and its successors) back in the 1990s which was supposed to give our wine producers much easier access to the EU market in return for respecting their cultural properties. (I’m not sure if anyone has ever undertaken an empirical assessment to see how that worked out.)
As previously reported, our Government and the EU are in the throes of negotiating a more wide ranging Free Trade Agreement. As part of those negotiations, the EU wants Australian law to significantly broaden the number and scope of EU “geographical indications” which are protected to include a further 236 spirit (as in alcoholic beverages) names and 172 agricultural and other names.
Nothing in this consultation paper means the Australian Government has agreed, or will agree, to make any changes to its existing GI regulatory framework or policy.
The Consultation Paper mentions that a common thread in submissions from the earlier round was the need to ensure that GIs could not be used to stop the continued use of food names already in common use. It envisages that there would be an opportunity to oppose registration on the basis that the term is a common or generic name for “a plant variety or animal breed” in Australia.
It’s not clear if the grounds of opposition would be limited to common or generic terms which are names of a plant variety or animal breed, or they are just examples of what might be common or generic terms. (It should be noted that the wine producers who were using “champagne”, “burgundy”, “claret” and the like didn’t get to oppose those GIs.)
Moreover, p. 2 of the Consultation Paper does note that in the previous round of consultations people could object to the EU’s proposed lists of further GIs but, if Australia agrees to protect any of them as part of the FTA, they will not go through the application and opposition process. They will go straight on to the Register.
Nothing in this consultation paper means the Australian Government has agreed, or will agree, to make any changes to its existing GI regulatory framework or policy.
On the subject of the Register, the Consultation Paper envisages that there would be a new Register created through amendment of the Trade Marks Act 1995. Hopefully, that would bring in all the currently protected GIs as well. Hopefully, it would also be more integrated and searchable than the current hotch potch.
On the more positive side, the Consultation Paper does say (p.3) that protection would not extend to a term like “camembert” alone if the GI registered was “Camembert de Normandie”.
On the other hand, the EU is seeking protection against uses which “evoke” a registered GI. On p. 5, the Consultation Paper notes that:
in the EU a producer has been prevented from selling whisky labelled ‘Glen Buchenbach’ because ‘glen’ (meaning ‘valley’) is a term used in Scotland and was found to evoke the GI ‘Scotch Whisky’. As another example, cheese sold in packaging with images of windmills and sheep was found to evoke the Spanish GI ‘Queso Manchgeo’ because those images are typical of the region in Spain where the GI is produced.
Maybe camembert is made in other parts of France than Normandy? What happens if that were to change and only the Normandy producers could use camembert “over there”? How would you test whether (presumably) Australian consumers would associate windmills and sheep with Don Quixote country? Don’t the Dutch have sheep? Would it matter what kind of windmill? Would the test be what Australian consumers would understand?
According to the Consultation Paper, consultations are open until 30 November 2020. In addition, there:
will be a Webinar – outline of GI consultation on 30 September at 12 noon to 1pm
will be a Virtual Roundtable – Standard of protection on 13 October at 12 noon to 1pm
will be Virtual Roundtable – Australian use of GIs on 15 October at 12 noon to 1pm
will be Virtual Roundtable – General operation of a possible GI system on 20 October at 12 noon to 1pm
will be Virtual Roundtable – GIs and Indigenous Knowledge on 22 October at 12 noon to 1pm
Links and more information about these via this page.
Nothing in this consultation paper means the Australian Government has agreed, or will agree, to make any changes to its existing GI regulatory framework or policy.
we can hardly claim we are not being properly consulted.
We are also not supposed to use “traditional expressions” on our wines. These matters are currently regulated under the Wine Australia Act 2013. There is a rudimentary overview with links to the Register of protected expressions here. ?
The Consultation Paper defines a “geographical indication” as “a name that identifies a product as originating in a country, region or locality where a particular quality, reputation or other characteristic of the product is essentially attributable to that geographic origin.” The definition in s 4 of the Wine Australia Act is in much the same terms, but limited to “wine goods”. ?
Although it is headed “Commercial in confidence”, a Google search on “yarra valley fetta” turned up this impassioned defence of “fetta” / “feta” as a common or generic term (but not, I think a plant variety or breed of animal). ?
I suspect that is Manchego. But it looks like Coles would be safe. ?