ownership

Lavazza qualità Oro – Oro tarnished or sanity restored

In what is surely only the first step on the long road to the High Court, Yates J has ruled that Lavazza qualità Oro coffee does not infringe Cantarella’s ORO trade mark – because Cantarella’s trade mark was invalidly registered.

As you probably recall, Cantarella famously has registered trade marks for ORO (and also CINQUE STELLE) for, amongst other things, coffee and coffee beverages.[1]

Lavazza has been importing Lavazza qualità Oro coffee into Australia since at least 1979. In about 2017, however, it introduced new packaging in the following form:

Cantarella sued Lavazza for infringing its ORO registrations contrary to section 120(1) of the Trade Marks Act by the 2017 and later years’ forms of packaging.[2] Lavazza denied infringement and also cross-claimed for revocation on the grounds (a) that Cantarella’s trade marks were not capable of distinguishing and/or (b) Cantarella was not the owner of ORO as a trade mark for coffee in Australia.

Infringement

Citing Gallo, Self Care, Woolworths v BP, Anheuser-Busch and Johnson & Johnson, Yates J found that the 2017 (and later years) forms of packaging involved use of ORO as a trade mark and so infringed – subject to any defences.

The issue on infringement was whether ORO was being used as a trade mark – a badge of origin. That fell to be assessed objectively in the setting and context in which ORO appeared on the packaging. Would the relevant public think it was being presented as an identifier of the trade source of the product?

At [375], Yates J did not agree with Cantarella that ORO was the dominant feature of the packaging but it was one (original emphasis) of the dominant features.

At [376], his Honour accepted that LAVAZZA was being used as a trade mark but that didn’t preclude ORO as presented (my emphasis) from also (my emphasis) being used as a trade mark. Instead, his Honour found both LAVAZZA and ORO functioned independently as trade marks – badges of origin.

The flavour of his Honour’s reasoning can be seen in his Honour’s rejection at [377] of Lavazza’s argument that ORO was used only as part of a composite mark – QUALITÀ ORO:

I do not accept that, in this packaging, the word “oro” is used as part of a composite mark QUALITÀ ORO. Whilst, on the packaging, the word “oro” is used in proximity to the word “qualità”, I do not accept that there is any necessary connection between the two words for trade mark purposes. In my view, for trade mark purposes, the two words function independently of each other, particularly given the different sizes and stylistic representations of the two words, with the word “oro” functioning as a trade mark. The word “qualità” is not functioning as a trade mark. Even if traders or customers were to associate the two words because of their proximity to each other on the packaging, it does not follow that the word “oro” is not functioning, in its own right, as a trade mark. As explained above, the existence of a descriptive element or purpose does not necessarily preclude the sign being used as a trade mark: [343] – [346] above.

Similarly, Yates J held the fact that the evidence showed numerous other traders were also using ORO in relation to their products did not avoid infringement. At [379], his Honour explained:

I do not accept that mere common use of a particular word in a given trade means that the word is precluded from functioning as a trade mark in that trade. The circumstances and manner of use of the word in question are critical to determining whether trade mark use of the word is involved. In the present case, whilst background circumstances cannot be ignored, the focus must be on the way in which the word “oro” is used on the impugned packaging.

So, subject to the cross-claim, Lavazza would infringe.

The cross-claims

Lavazza cross-claimed under s 88(2)(a) for revocation on the grounds that the registration of the ORO trade marks could have been opposed (a) under s 41[3] as not capable of distinguishing and/or (b) s 58, Cantarella was not the owner.

Not capable of distinguishing

Under either form of s 41, the central question was whether or not ORO was capable of distinguishing or did in fact distinguish Cantarella’s coffee – when the trade mark in question was filed.

Citing Lord Parker’s speech in Registrar of Trade Marks v W & G Du Cros Ltd [1913] AC 624,[4] Lavazza argued that ORO did not serve as a badge of origin because:

“other persons had registered and/or used in Australia, and/or were continuing to use in Australia, and/or without any improper motive would desire to use in Australia the word ORO in respect of their coffee products”

or, alternatively, because, as a significant part of the Australian public would understand ORO was a laudatory reference to “gold”, it was descriptive.

Yates J rejected the first argument about common usage as inconsistent with the High Court’s majority ruling in the earlier ORO case – which his Honour refers to as the Modena proceeding.

In the the Modena proceeding, Yates J pointed out in a lengthy discussion concluding at [303], the majority held that inherent capacity to distinguish was not tested only by other traders’ desire to use, or use of, the sign. Rather, the ‘ordinary signification’ of the sign had to be ascertained and the legitimacy of other traders’ use tested by reference to that. French CJ, Hayne, Crennan and Kiefel JJ explained:

70 In accordance with the principles established in Mark Foy’s and restated in Clark Equipment, Faulding and Burger King, determining whether a trade mark is “inherently adapted to distinguish”, as required by s 41(3), requires consideration of the “ordinary signification” of the words proposed as trade marks to any person in Australia concerned with the goods to which the proposed trade mark is to be applied.

71 As shown by the authorities in this Court, the consideration of the “ordinary signification” of any word or words (English or foreign) which constitute a trade mark is crucial, whether (as here) a trade mark consisting of such a word or words is alleged not to be registrable because it is not an invented word and it has “direct” reference to the character and quality of goods, or because it is a laudatory epithet or a geographical name, or because it is a surname, or because it has lost its distinctiveness, or because it never had the requisite distinctiveness to start with. Once the “ordinary signification” of a word, English or foreign, is established an inquiry can then be made into whether other traders might legitimately need to use the word in respect of their goods. If a foreign word contains an allusive reference to the relevant goods it is prima facie qualified for the grant of a monopoly. However, if the foreign word is understood by the target audience as having a directly descriptive meaning in relation to the relevant goods, then prima facie the proprietor is not entitled to a monopoly of it. Speaking generally, words which are prima facie entitled to a monopoly secured by registration are inherently adapted to distinguish.

At [415], Yates J summarised the ruling in the the Modena proceeding:

…. As the majority explained, the desire of other traders to use the word in question is a function of the meaning that that word bears, according to its ordinary signification, in relation to the goods or services for which the mark is, or is sought to be, registered. ….

Accordingly, it was not for a judge sitting at first instance in the Federal Court to treat the majority in the the Modena proceeding as dealing only with a “narrow” question of distinctiveness of “descriptive” signs rather than a “broader” question of common usage. Moreover, it was not permissible for a judge sitting at first instance to disregard the majority view and adopt the dissenting view of Gageler J.[5]

Yates J then turned to consider the “ordinary signification” of ORO.

First, (albeit at [457]), Yates J rejected Cantarella’s argument that the High Court’s decision was conclusive on the question. Lavazza was not a party to that proceeding so there was no question of stare decisis.

Secondly, in this context, it was significant that the public was a broad consumer market and not a specialised trade or market. At [424], therefore, his Honour explained how the “ordinary signification” of a word fell to be determined:

Bringing these strands together, for presently relevant purposes a word will have an “ordinary signification” if it has been received into Australian English and has a commonly understood and commonly shared meaning by ordinary members throughout the Australian community at large.

(See also [463].)

This would not be satisfied if the word was shown to be used just in a particular locality or by a particular trader or even traders. Nor merely where a numerically large number of people knew the meaning. This latter point proved decisive.

Lavazza led extensive evidence of the use of “oro” by Lavazza and other traders before the relevant priority dates; the promotion of its own LAVAZZA QUALITÀ ORO in Australia in conjunction with “gold”; the permeation of the Italian language and coffee culture in the Australian coffee market; direct evidence from those in the trade (most of whom happened to be Italian speakers) that oro means gold and is used as a quality indication; and census data.

Yates J accepted that a numerically large section of the Australian public did appreciate that “ORO” meant gold in Italian but the evidence fell short of establishing ORO had been accepted into Australian English throughout the Australian community at large in contrast to, say, bravo, encore, en route and tour de force. At [460], his Honour summarised:

Whilst I accept that, speaking generally, a numerically large number of persons in Australia might understand, by their knowledge of Italian or another Romance language, that the word “oro” means “gold” in English, I am far from persuaded that the evidence before me shows that, even at the present time, “oro” has been received into Australian English such that the ordinary signification of “oro” is “gold”. I am satisfied, therefore, that the word “oro” does not have an ordinary signification. It follows that I am not satisfied that, as at 24 March 2000 or as at 30 September 2013, the Australian public, at large, would have understood that the word “oro”, when used in relation to the registered goods, meant “gold”, or was a laudatory reference to “gold”, and, therefore, “premium quality”.

Not the owner

In contrast, his Honour found the evidence established that Cantarella was not the owner of ORO as a trade mark for coffee at the priority dates for its registrations contrary to s 58.

At [490] – [491], Yates J rejected an argument that Cantarella could not own ORO as a trade mark because it was descriptive or in common use or lacked distinctiveness. That was the realm of s 41, not s 58.

As you know, the owner of a trade mark for Australian purposes is the first person to use the sign as a trade mark for the relevant goods or services or, if there has been no use, to apply to register it with the intention of using it as a trade mark – [494] – [498] and [571].

As the case was run, this required first establishing when Cantarella first used ORO as a trade mark for coffee and then examining when someone else’s use first started (and was not abandoned).

Cantarella was able to establish by accessing archived back-up tape that a product code COVIBON3 with the product description “VITT BK ORO BNS” was created in its systems on 2 August 1996. The data also showed that the first sale of COVIBON3 was made on 20 August 1996 “to the firm of solicitors formerly known as Mallesons Stephen Jaques” with sales ensuing to other customers in subsequent months.

Cantarella also led evidence from an employee who during the 1990s worked as a machine operator. His evidence included that Cantarella’s products were packaged using rewind tape – pre-printed film supplied on a roll. These rolls were inserted into an automated in-line packaging machine to create the bags. Part of this process involved inserting a printing plate into the packaging machine to stamp on the film product specific information. He recalled inserting ORO brand plates in “the mid–1990s could be 1993 or 1994”. However, Yates J was not prepared to accept this dating as it was inconsistent with Canteralla’s case based on the creation of the COVIBON3 code.

Turning to the other side of the equation, Lavazza relied on its own use in relation to its LAVAZZA QUALITÀ ORO product or, alternatively, use by a third party CAFFÈ MOLINARI ORO.

As mentioned at the outset, Lavazza’s product has been imported and sold in Australia since 1979. For many years (before the packaging that sparked this litigation), the packaging was in the following form or variations:

This, however, was not use of ORO simpliciter as a trade mark (e.g. at [548]).

Lavazza did establish that Caffè Molinari SpA has been supplying its CAFFÈ MOLINARI ORO product in Australia since September 1995:

The evidence of the lengths involved in establishing this use is quite involved and discussed in detail at [117] – [193]. This included evidence of witnesses from Molinari, the supplier, and CMS / Saeco, the first importer.

A particular twist here is that Modena’s importation and sale of CAFFÈ Molinari Oro coffee was found to be infringing conduct in the earlier Modena proceeding. However, the evidence of prior use in this case was from different witnesses, more extensive than and different to the evidence from Molinari that Modena advanced in the Modena proceeding.

At [574], Yates J found that the use of ORO on the CAFFÈ Molinari Oro packaging was use as a trade mark:

I reach this conclusion having regard to the size, colour, positioning, and prominence of the word “oro” on the packaging in relation to the other packaging elements. I observe that the word “oro” on that packaging is as conspicuous as the other trade mark used—CAFFÈ MOLINARI. I do not accept Cantarella’s contention that the word “oro” is used only as an element in the composite mark MISCELA DI CAFFÈ ORO, and not as a trade mark its own right.

However, the use of ORO BAR on the 3 kg packaging was not trade mark use of ORO alone – ORO BAR was not the same as, or substantially identical with ORO.

His Honour then went on to reject Cantarella’s contention that Molinari had abandoned its use of the trade mark.

At [581] – [582], Yates J recognised that ownership of a trade mark could be lost by abandonment – which required more than “mere” non-use or slightness of use. Despite the changes in Molinari’s packaging over the years, however, Yates J found Molinari had been using the ORO mark continuously as a matter of fact.

Finally, consistently with the decision in Anchorage Capital, Yates J ruled it was inappropriate to exercise his discretion under s 88(1) against non-cancellation of Cantarella’s mark.

In Anchorage Capital, the Full Court considered it was not in the public interest to allow someone, who was not the owner of the trade mark when they applied to register it, to jump the queue. Similarly, at [599], Yates J considered that ownership cannot (my emphasis) depend on the nature and scope of Cantarella’s reputation. Nor should other traders be vexed by use of the registrations “such as happened in the present case”.

Obiter dicta

As it was not necessary for his decision, Yates J commented only briefly on Lavazza’s defences to infringement based on prior use, good faith description as per s 122(1)(b), a right of use (s 122(1)(e)) or honest concurrent user through the operation of s 122(1)(f) or (fa).

Perhaps the most interesting comment is that Yates J, who was I think a member of the Working Party to Recommend Changes to the Australian Trade Marks Legislation[6], suggested at [647] – [649] that the orthodoxy prevailing since McCormick that honest concurrent use does not defeat an opposition on grounds of s 58 or s 60 should be reconsidered. Referring to Project Blue Sky on statutory construction, his Honor noted at [647]:

However, giving s 58 an operation that is independent of s 44(3) robs the latter provision of practical effect. If the registered owner of a trade mark is truly the owner of that mark, every application under s 44(3) can be met with a s 58 objection by the registered owner. There is, therefore, an apparent conflict between the operation of s 44(3) and the operation of s 58 of the Act.

Yates J also drew attention to other drafting difficulties with s 122(1)(f) and (fa). At [642] for example, his Honour explained:

To explain, the defence under s 122(1)(f) is directed to the case where the infringer has used the very mark that is registered (in this case, the ORO word mark), and the Court is satisfied that the infringer would obtain registration of that mark in that person’s name. On the other hand, the defence under s 122(1)(fa) is directed to the case where the infringer has not used the mark that is registered, but a mark that is substantially identical with or deceptively similar to the mark that is registered, and the Court is satisfied that the infringer would obtain registration of the substantially identical or deceptively similar mark in that person’s name. (my emphasis)

Yates J thought that this wording meant that only the defence under s 122(1)(f) would be available and it would be available only to “LL SpA” – the Italian parent of the Lavazza group. However, it was the local subsidiaries, Lavazza Australia and Lavazza OCS, which were being sued for infringement. The suggestion being that, despite s 7 and s 26, the defence was unavailable to the subsidiaries.

In any event, his Honour’s findings on Molinari’s ownership would preclude the Lavazza companies achieving registration.

I have no inside information about the commercial goals or intentions of any of the parties and, with respect, I would not want to be taken as suggesting Yates J has messed up in any way but one would think that, given Cantarella pursued the Modena proceedings all the way to the High Court, an appeal is likely to be forthcoming.

Cantarella Bros Pty Ltd v Lavazza Australia Pty Ltd (No 3) [2023] FCA 1258


  1. For ORO, Trade Mark No. 829098 registered since 24 March 2000 and also Trade Mark No. 1583290 registered since 30 September 2013 (which is also the same date the Full Federal Court delivered judgment upholding Modena’s appeal in the case the High Court subsequently overruled.  ?
  2. In 2022, Lavazza also started importing into Australia capsules for Nespresso machines. The capsules were gold and had ORO emblazoned in black on them and these were added to the complaint.  ?
  3. Given the different dates of the two registered trade marks, the two different version of s 41 were in play. For the “old” version, see [393].  ?
  4. Quoted in Lavazza at [292].  ?
  5. Should special leave to appeal this proceeding eventually be granted, someone will no doubt notice that only Gageler J, now Gageler CJ, remains of the Court that decided the the Modena proceeding.  ?
  6. Despite its centrality to understanding what was intended to be achieved, I don’t think the Report itself is actually available online – which (if I am right) is something IP Australia should surely rectify.  ?

Lavazza qualità Oro – Oro tarnished or sanity restored Read More »

Is there a copyright work and who owns it?

Rees J, sitting in the NSW Supreme Court, had to grapple with some unusual, but basic, issues in finding that Metstech owned copyright in a range of works made by a Mr Chou. However, it did not own copyright in software made by Mr Martin; instead having an exclusive licence over that copyright including the right to access and modify the source code.

Some background[1]

Metstech designs and distributes telecommunications systems for underground mines. (The specific technology was a ‘leaky feeder system’ which allowed two way radios and mobile phones to communicate over long distances underground where ordinarily such radio communications were not possible.[2])

Image of an axial cable layout with a headend controller at one end, bidirectional amplifiers at various intervals and and a splitter adding a branch line
Leaky Feeder System

Metstech was formed by four individuals including Jefferson, Park and Chou. They or their family companies were the shareholders. Jefferson was the CEO and Park the General Manager. Park and Chou had experience in electrical engineering and had ideas about how a new and improved system to replace the poorly functioning existing systems. Jefferson provided the funding, to the tune of $700,000 over time.

In addition to being a founding director, Chou became an employee and was paid a salary after a short initial period when Metstech did not have funds. Part of Chou’s job included placing orders for the manufacture of Metstech’s products which he arranged through a family company and his company was permitted to charge a marked-up price to Metstech over the price charged by the manufacturer.

Although Martin was offered initial shares in Metstech and an employment contract, he did not take up either offer due to legal issues he was experiencing at the time. Nonetheless. in 2018, Martin designed the Raspberry Pi Software controlling the Metstech system. He was not paid for this work. He provided it to Jefferson including access to the source code for use by Metstech including permission to modify it.

Later, in 2019, Martin did become an employee of Metstech and made some further modifications of the Raspberry Pi Software at that time.

In addition to the funding provided by Jefferson, another company, Challenger, eventually contributed a further $750,000 towards funding the product development in return for the promise of a 20% shareholding and a nominee on the board of directors.

The development of Metstech’s products proceeded well and substantial orders were coming in. Jefferson came into dispute with the other directors over repayment of his funding and their demands for increased salaries. Challenger also became frustrated with the delays in issuing its shares.

Park, Chou and some associates “staged a coup” and replaced Jefferson as CEO excluding him from access to the company’s bank accounts. To fend off Jefferson and Challenger, they also engaged in a number of schemes to transfer Metstech’s assets and related IP to a “phoenix” company. In addition, in the process of decamping they deleted from the Metstech Google Drive accounts all the data and documents relating to PCB assemblies, source code, concept designs, PCB schematics and PCB layouts, firmware source code, manufacturing files, bills of materials and test results.

After Jefferson and Challenger got wind of some of the conduct, they initiated a deed of company arrangement and, after regaining control of Metstech, brought these proceedings seeking orders relating to its ownership of the copyright, remedies for breaches of obligations of confidence and tortious conspiracy to injure the plaintiffs by unlawful means.

The plaintiffs largely succeeded on their copyright claims and breach of confidence. The claims for tortious conspiracy to injure by unlawful means failed however.

Copyright in the Metstech “products”

The plaintiffs claimed copyright in various designs for printed circuit board (PCB) assemblies as artistic works[3] and, as either original literary or artistic works, PCB schematics, manufacturing documentation – source code, concept designs, PCB schematics and PCB layouts, firmware source code, manufacturing files, bills of materials and test results – and Metstech “firmware” which was installed in micro-processor units in various components.

A graphical representation of a circuit board layout on the left and on the right a photograph of printed circuit board showing various electrical components interconnected by metal strips

(A graphical representation of a PCB layout (on the left) and the corresponding PCB (on the right))

The plaintiffs also claimed ownership of the copyright in the Raspberry Pi software and later revisions.

Were there copyright works

It will be recalled that the defendants had deleted all the data and documents from their Google Drive accounts when decamping and, it appears, none of them produced anything by way of discovery or otherwise in evidence. According to the defendants, or at least Park and Chou, they did not have any documents because the products had been designed by the third party manufacturer.

The first problem confronting the plaintiffs, therefore, was that they did not have copies of the works over which they claimed ownership. Who was the designer, and hence the author of the works, was the second problem.

Rees J was prepared to infer (at [591] to [603]) that there had been original works made by Chou in which copyright subsisted:

  • Metstech led expert evidence about the process and steps involved in designing and manufacturing products such as the PCB Assemblies including the need to document things such as functional specification, electrical schematic, PCB layout and manufacturing files, firmware code listing and compiled version of the firmware code (if applicable), bill of materials, assembly and testing instructions, troubleshooting guide, service manual, packaging information, data sheets and sales brochures. Much of this documentation would be required by the manufacturer to make such complex products
  • the design and specification of such PCB assemblies also required the use of specialised computer software such as Altium Designer and RhinoCAD. Metstech had bought or reimbursed Chou for purchases of this software and Chou was at all times anxious to ensure he had properly licensed copies of this software
  • Metstech bought or reimbursed Chou for the tools and equipment that would be used in developing and constructing models and prototypes.

Accordingly, at [603] Rees J held:

…. The disputed works must have been created and insofar as they are original literary or artistic works (or both) and that to the extent that they still exist, the employer owns them. ….

I am not sure about her Honour’s limitation “to the extent that they still exist”. Under the Act, the requirement is that the work be made in the sense of reduced to writing or some other material form.[4] The continued existence of the documents, however, would be relevant to orders for delivery up and provision of access.

Who was the author

As noted above, Park and Chou claimed that the PCB assemblies and other products were designed by the manufacturer and so, in the absence of any agreement to the contrary or assignment, any copyright belonged to the manufacturer.

Rees J rejected this claim. A number of factors led her Honour to this conclusion including:

  • Metstech’s products were original and not mere copies of existing products: [585]
  • Chou had the necessary skills to design the products: [583]
  • it was Chou who came up with the idea for the various products: [584]
  • there was voluminous correspondence describing Chou as the designer or in which he claimed to be the designer or attending to the design: [571] – [586]
  • Chou also spent hours explaining the intricacies of the system and the products to others: [586]
  • the purchase of the specialised software and the provision of the tools and equipment such as Altium Designer and RhinoCAD
  • Park and Chou first claimed that the manufacturer was the designer only when Metstech first went into administration. Prior to that, the voluminous contemporaneous correspondence such as emails repeatedly referred to Chou as the designer
  • not a single document was produced identifying the manufacturer as the designer.

Who was the owner

Rees J noted that it was not sufficient for Metstech to establish that Chou was the author and an employee. As the terms of s 35(6) make clear, Metstech also had to establish that Chou made the works in pursuance of his employment and not in the course of some extracurricular activities; at [564] adopting the question posed by Moore J in EdSonic v Cassidy:

did the employee make the work because the contract of employment expressly or impliedly required or least authorised the work to be made.

The volume of material referred to by her Honour in concluding that Chou was the designer left Rees J at [587] in “no doubt” that the answer to that question was “yes”.

There was one qualification to this conclusion at [588] – the work designing a splitter which Chou had done before he became a full-time employee being paid. While Chou was a director, Rees J doubted he qualified as an employee for the purposes of s 35(6) at that time.

However, Rees J held Chou was estopped from denying that Metstech was licensed to use these materials having regard to the circumstances in which he made the design and continued to develop the design for Metstech’s use after he became an employee.

A final issue insofar as the works made by Chou are concerned was whether Metstech or Metstech IP Pty Ltd (one of the defendants) owned the copyright.

In a not uncommon arrangement, the directors of Metstech, including Jefferson, Park and Chou, had set up Metstech IP to hold the intellectual property. The directors and shareholders of both companies were the same. Metstech IP had applied for R & D grants in respect of the development of the Metstech technology and, in the books of the companies, Metstech charged Metstech IP a fee for the development work. While that fee was not paid, Metstech IP had remitted tax rebates to Metstech.

While Metstech IP had been set up to hold the intellectual property, however, there was no formal assignment of intellectual property rights in writing from Metstech to Metstech IP. As Chou had made the works as an employee of Metstech (and not Metstech IP) and in the absence of a signed, written assignment in conformity with s 196(3), Rees J held at [606] that Metstech was the owner of the copyright.

Copyright in the computer software made by Martin

The Raspberry Pi Software was a different case. When Martin wrote it, he was not an employee and had chosen not to become a director or shareholder. Nor was he paid for his work although he believed (at [106]) that “one day I might be compensated by the company if and when it was successful.”

When pressed by Jefferson, Martin transferred a copy of the source code and other documentation into a Metstech account and agreed that Metstech could amend the software as required.

Although Martin had not been engaged for reward to write the software, Rees J found ([231] – [233]) the circumstances gave rise to an implied unlimited and exclusive licence in Metstech’s favour which included the right to alter the software as need. (See also [161 and [623]])

Later, in July 2019, Martin was allotted 5% of the shares in both Metstech and Metstech IP. Jefferson and Park both considered this allocation was to secure the intellectual property in the software. Martin denied this.

As there was no written agreement formally recording the assignment, Rees J considered at [320] that s 196 precluded an assignment under the Act. Rees J also rejected at [324] Metstech’s argument that Martin understood the shares were in compensation for the transfer of ownership in the software. Her Honour appears to have considered the allotment was consistent, or at least equally consistent, with a payment to secure Martin’s continued involvement in the business.

Martin did become a full-time employee of Metstech and, in the course of his employment, he later made some further modifications to the software.

Distinguishing J R Consulting, Rees J held that the computer programs in this amended form were not new copyright works in which copyright subsisted. Martin’s evidence was that the changes were only “bug-fixes and minor enhancements”. Although the change logs showed 21 changes were made to the software in the relevant period, Metstech did not satisfy her Honour that they were more than trivial. At [620], her Honour explained:

The plaintiffs submitted that the changes made by Mr Martin were more than trivial, I am in no position to say one way or the other. I note that 21 changes were made from July 2019 to July 2020. Beyond that, I do not know. I am not satisfied that the changes made to the software after Mr Martin commenced his employment with Metstech were “original” in the requisite sense such that copyright in new versions of the software are a new work in which copyright subsists and is held by his employer, Metstech.

Thus, Metstech was left with its exclusive licence. However, this was enough for her Honour to direct that Martin continue to provide Metstech with access to the source code under the exclusive licence.

Confidential information and Conspiracy to injure

Rees J found misuse of Metstech’s confidential information on conventional grounds.

The plaintiffs alleged that the defendants (other than Metstech IP) had engaged in a tortious conspiracy to injure the plaintiffs and Metstech IP by unlawful means.

Rees J dismissed this claim, however, not as a result of any exoneration of the defendants’ conduct. Rather, damages are the gist of the action. Thus it is necessary for the plaintiff to plead that it has or will suffer pecuniary loss as a result of the conspiracy.

While the alleged conspiracy was pleaded at length, damages were neither alleged nor particularised. Nor did the plaintiffs’ evidence establish any pecuniary loss. Accordingly, at [659] her Honour dismissed the claim.

Her Honour’s decision serves as a useful warning about the risks of not documenting transfers of intellectual property in writing. That is not necessary in the case of an employee if you can prove they did the work in the course of their employment. The decision also provides a range of indications to consider if it becomes necessary to try to prove the existence and authorship of copyright works in the absence of documentary evidence.

Metstech Pty Ltd v Park [2022] NSWSC 1667


  1. As her Honour’s narration of the facts is some 550 paragraphs, this is necessarily a very “potted” outline.  ?
  2. The system consisted of long lengths of coaxial cable (serving as the antenna) strung along the shafts, with a headend controller (a Raspberry Pi computer), a number of bi-directional amplifiers (BDAs) and splitters, the BDAs (at least) including printed circuit boards (PCBs) custom-designed for the system).  ?
  3. At [551], her Honour identified the claim as being to PCB assemblies as artistic works and, at [558], her Honour noted that text and numerals on the a PCB, in engineering drawings and installation instructions could be both artistic works and, “to the extent the figures are deployed”, literary works citing Lumen Australia Pty Ltd v Frontline Australasia Pty Ltd [2018] FCA 1807; (2018) 137 IPR 189 at [206]-[209] (per Moshinsky J); Anacon Corp Ltd v Environmental Research Technology Ltd [1994] FSR 659 (per Jacobs J) (circuit diagram). The parties do not appear to have raised issues about the exclusion of circuit layouts from the definition of artistic work in s 10 of the Copyright Act 1968 or of “corresponding designs” under s 74 and the copyright / design overlap provisions of the Copyright Act or of the effect, if any, of the exclusion by Designs Act 2003 s 43 (but not in reg. 4.06) from registration of integrated circuits as a design although, from the description of the PCB assemblies in the judgment, it would appear they did not constitute “integrated circuits” on the reasoning of Moshinsky J in Lumen Australia Pty Ltd v Frontline Australasia at [298] – [311] and of course, as Moshinsky J found, the copyright / design overlap provisions do not apply to literary works.  ?
  4. Copyright Act 1968 s 32 and s 22(1)  ?

Is there a copyright work and who owns it? Read More »

Love was not in the air – Part 2

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

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

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

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

Infringement, or not

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

In summary, Perram J held that:

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

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

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

The infringing acts

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

(1) the making and recording of Warm;

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

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

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

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

Making and recording – the reproduction right

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

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

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

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

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

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

The alleged infringements the subject of the proceeding

That left as infringing acts being pursued by the Applicants:

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

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

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

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

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

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

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

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

The copyright and ownership – a chain of title history

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

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

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

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

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

(a) to perform in public; and

(b) to transmit via a diffusion service,

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

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

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

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

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

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

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

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

A summary

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

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

Which acts of streaming / downloading infringed?

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

iTunes / Apple Music, Spotify et al.

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

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

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

(a) reproduce AMCOS Works;

(b) authorise the reproduction of AMCOS Works;

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

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

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

Love was included in the APRA and AMCOS Works.

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

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

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

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

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

The Big Cartel and IDIB websites

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

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

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

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

Air France

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

Remedies

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

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

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

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


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

Love was not in the air – Part 2 Read More »

Hells Angels v Redbubble

Redbubble’s online market place has survived the Hells Angels’ copyright infringement claims, but did infringe their registered trade marks. The reasoning, however, leaves questions hanging over Redbubble’s business model.

Redbubble provides an online market place. Artists can upload their artwork and potential buyers can browse the site to purchase the artwork or merchandise such as t-shirts and coffee cups emblazoned with the artwork. If a purchase is made for, say, a t-shirt with a particular artwork printed on it, Redbubble’s system arranges for the order to be placed with a fulfiller and ultimately shipped in packaging which bears a Redbubble trade mark.

The claims in this case related to uploaded images of a Hell’s Angels membership card featuring a helmeted death’s head in profile:

and registered trade marks featuring versions of the death’s head: Trade Marks Nos 526530,723291, 723463, 1257992 and 1257993.

At 552 paragraphs long, this post is going to be a high level overview only.

Copyright

A key feature in the case is that Hells Angels Motorcycle Corporation (Australia) Pty Ltd is not the owner of the copyright or the registered trade marks. It contended it was the exclusive licensee in Australia of those rights; the exclusive licences having been granted by Hells Angels Motorcycle Corporation, a US corporation.

The Hells Angels lost the claim of copyright infringement. They did so, however, because they could not prove Hells Angels USA was the owner of the copyright. As a result, Hells Angels Motorcycle Corporation (Australia) Pty Ltd could not be the exclusive licensee.

Reaching this conclusion required Greenwood J to explore, amongst other things, the notion of publication and whether the supply of membership cards was supply of copies of the work to the public. And the non-applicability of the US “work for hire” doctrine in ownership disputes under Australian law.

Redbubble is still in trouble.

First, if the applicants had been able to prove title to the copyright, Redbubble would have infringed.

Contrary to Hells Angels’ arguments, Redbubble was not liable for infringement by uploading the images. That was done by the artists in question. In the examples in question, the acts involved uploading images to websites outside Australia. For example, Example 1 was uploaded by an individual in Virginia in the USA. So the uploaders themselves were not liable as their actions did not involve any act done in Australia. At [428] – [429], Greenwood J ruled that, even though the images were made available online to the public in Australia, the artists (uploaders) did not infringe because they did no act in Australia.

…. the act of the artist in uploading the image to the website and thus making the work available online to the public must be an act “done” (that is, an exercise of the exclusive right), “in Australia” and therefore, none of the artists in the examples in suit can be regarded as a “primary infringer” in the territorial sense contemplated by s 36(1) because the relevant act was not done “in Australia”.

His Honour found, however, that Redbubble would be liable for communicating the images to the public in Australia as it was the person who was responsible for determining the content of the communication for the purposes of s 22(6) when a potential customer in Australia viewed the image on the website. Redbubble’s business model was crucial here. At [435], his Honour explained:

The business model as described by Mr Hosking and its working operation as described by Mr Kovalev makes it plain that Redbubble is not in the nature of an ISP linking a user to remote websites. It is not an intermediary providing a transmission service between particular participants. It owns, operates, manages and controls the website and conducts a transactional enterprise in which it facilitates the uploading of images, the interrogation of those images in Australia, relevantly, by users, with a view to enabling sales to consumers of articles bearing the relevant images. It has a detailed business model in which it derives revenue from each transaction and controls every step of the transactional engagement between an artist and a buyer. It confirms the sale. It facilitates payment. It organises a fulfiller to apply the work to the relevant goods. It facilitates delivery of the goods to the buyer. It generates email responses which not only confirm the order but track every step of the transaction. It affixes its own trade marks to the goods. It says that it does not directly do that but there is no doubt that an essential part of its business model is ensuring that fulfillers affix the Redbubble trade marks to the goods. The labels bearing the trade marks are on the goods as delivered to each buyer. Although I will address the trade mark case shortly, the reference to Redbubble’s trade marks, in this context, is simply to note another feature of the extent of Redbubble’s engagement in and association with each transaction. It is Redbubble’s business. But for the Redbubble website, the transactions would not occur. The artworks would not be available online to consumers in Australia to consider and appraise with a view to purchasing a product bearing the artwork. The entire focus of the business model is to enable works to be made available online so that consumers can pick and choose amongst the works so as to have them applied to goods. It would be difficult to imagine a more directly engaged participant than one deploying the business model adopted by Redbubble. Although Redbubble describes itself as the “agent” of the artist (presumably as principal), the relationship is not, in truth, a relationship of agent and principal. Redbubble acts as an “independent contractor” to “facilitate the transaction” as the Redbubble User Agreement and Appendix A to the Services Agreement makes plain: [245] and [246] of these reasons. The artist, in truth, is not the “seller” in the classic sense in which that term might be understood because Redbubble is the supplier as the facilitator of all of the essential elements of the transaction with the consumer in an analogous way to that discussed in:  International Harvester Company of Australia Pty Ltd v Carrigan’s Hazeldene Pastoral Company [1958] HCA 16;  (1958) 100 CLR 644 at 653; Heidelberg Graphics Equipment Ltd v Andrew Knox & Associates Pty Ltd (1994) ATPR 41326 at 42, 31011, notwithstanding that the nature of the technology is different to the forms of distribution arrangement in those cases.


His Honour would, if necessary, have also found Redbubble liable for authorising the conduct if it had been infringing.

Trade Marks

Secondly, Greenwood J found Redbubble liable for infringement of the Hells Angels’ registered trade marks on works such as t-shirt designs featuring the death’s head logo.

The crux of this finding came back to Redbubble’s business model. Greenwood J accepted that the artist who uploaded the image was using the trade mark as a trade mark. Unlike the copyright test, there was no requirement that the artist be in Australia. However, so was Redbubble.

At [460] – [461], his Honour explained:

As to Redbubble, that company is “in the business” of facilitating the supply of products bearing the uploaded image of Ms Troen (in this example) or, put another way, Redbubble is in the business of facilitating the supply of clothing bearing, put simply, the registered trade marks of HAMC US (in this example). Redbubble is not the “seller” of artwork. However, it is the supplier, in the sense that it is responsible for all of the transactional supplyside elements of a transaction for the supply of goods bearing the applied works. (emphasis supplied)


Redbubble has created a business model designed to enable users, in Australia (and, for that matter users in all jurisdictions in which the website is accessible), to find images through the website comprised of, in this example, Ms Troen’s image made up of the identified trade marks of HAMC US. Redbubble enables images containing the relevant trade marks to be presented to buyers of particular goods (nominated by the artists from the website categories of those goods to which the work can be applied) expressly for the purpose of facilitating the supply of goods (clothing, in this example) to which the marks are applied. It does so by and through the functions and protocols of the website engaged by Mr Hansen (and other potential viewers of the image), in Australia.

His Honour elaborated on why Redbubble’s conduct attracted liability at [462] – [469]. While this and two other examples infringed, his Honour found that, on the particular facts, Example 2 was not infringing use.

Greenwood J’s reasons also include an extended consideration of whether Hells Angels Australia was an authorised user; ultimately concluding it was.

Greenwood J, however, rejected Hells Angels’ claims that use of “Hells Angels” as search terms, or key words, within the Redbubble site was infringing. At [542] explaining:

542. …. However, I am not satisfied that this use, in itself, is use of the word marks as a trade mark, at this point in the functionality of the website. I take that view because I am not satisfied that using the term as a search term to find a relevant image is use of the term as a “badge of origin” of Redbubble. It is, undoubtedly, a use which is designed, quite deliberately, to lead a consumer by the “search nose” to images, marks, devices, livery and badging somehow or other connected with the Hells Angels Motorcycle Club.

….

544. … use of the word marks … as a search term is a search step along the way to use of the image and thus the registered trade marks, as trade marks but use of the word marks at the point of searching is not, in itself, in my view, use as a trade mark. (original emphasis)

It appears that, at the stage of entering the search term, it is not being used to identify things offered under the aegis of the Hells Angels, but just to locate things about the Hells Angels in some way.

This is the second ruling at first instance where Redbubble has been found to infringe.

While Redbubble’s business model does leave it exposed along the lines indicated above. It is worth noting that Greenwood J awarded only nominal damages of $5,000 in respect of two of the three infringements. His Honour did not allow even nominal damages in respect of the third infringement, Example 4, as it was online for a short period, viewed only 11 times and no sales resulted.

Greenwood J expressly rejected any claim for exemplary damages. His Honour does not go into reasons. Perhaps, Redbubble’s business model did protect it. The evidence was clear, for example, that Redbubble had a policy relating to infringement claims and implemented it promptly.

Hells Angels Motorcycle Corporation (Australia) Pty Limited v Redbubble Limited  [2019] FCA 355

Hells Angels v Redbubble Read More »

Pokemon v Redbubble: the DMCA doesn’t apply Down Under

Pagone J has awarded Pokémon $1 in damages and 70% of its costs from Redbubble for misleading or deceptive conduct and copyright infringement. An interesting aspect of the case is that Redbubble’s implementation of a notice and take down scheme under the DMCA didn’t save it from liability, but did influence the ruling on remedies.[1]

Redbubble provides a print on demand online market place by which artists can upload their works to the Redbubble website and purchasers can then buy the artworks or designs applied to desired products such as t-shirts, cups and the like. A person uploading a work to the marketplace warrants that he or she has the relevant intellectual property rights and indemnified Redbubble against infringement claims.

The evidence showed Google searches in which paid (sponsored) and organic search results listing “Pokémon” products such as t-shirts bearing Pokemon’s Pikachu character[2] which could be ordered from the Redbubble site. The sponsored links were paid for and arranged by Redbubble through the Google Merchant Centre and the products themselves were offered for sale through Google Shopping. From the tenor of the judgment, I think that the designs were uploaded by third parties, but Redbubble arranged the “fulfillers” who printed and shipped the t-shirts (and other products) with the designs printed on them.

Pagone J found that Pokémon owned the copyright in the images of the Pokémon characters depicted on the various products in evidence. Further, the images were uploaded without Pokemon’s consent.

Pagone J found therefore that Redbubble had infringed Pokemon’s copyright and misrepresented, contrary to sections 18[3] and 29(1)(g) and (h) of the Australian Consumer Law, that the products were official or authorised Pokémon products.

In finding that there had been misrepresentations that the products were sponsored or approved by Pokémon, Pagone J referred, amongst other things, to the fact that the “sponsored” links did include the word “sponsored” (although this meant in fact that the products were sponsored by Redbubble, not Pokemon). His Honour also found significance in the fact that:

There was nothing on the Redbubble website to inform the consumer that there was no connection, authorised or otherwise, between Redbubble on the one hand and [Pokemon] (or any other entity authorised to exploit Pokémon products) on the other.

Copyright subsistence and ownership

Pokémon was able to prove it owned the copyright in the artistic works through the evidence of its attorney responsible for obtaining copyright registration in the USA. Although the attorney, Mr Monahan, had not been personally present when any works were created, Pagone J considered his evidence sufficient. At 36, his Honour said:

…. He conceded in cross?examination that he had not stood over the shoulder of any creator and, therefore, that he did not have direct eyewitness, or other direct, knowledge beyond that gained from “detailed consultation with the client” but that “with respect to each series of the cards, [he had] consult[ed] with the client to determine which – for instance, which Japanese card they derive[d] from, or [… where] the artwork comes from”. His specific and direct evidence was that of consulting with the client to determine that the works were made by the Japanese company and were made as the Japanese card, although, as mentioned, he did not fly personally to Japan and had not been witness to the creation process. It had been his specific professional responsibility to obtain and secure registrations in accordance with lawful entitlements and requirements. He was confident in that context of his conclusion that the Pikachu work was not a copy based upon an animation cell because of his experience over many years of consulting with the client as his professional obligations and legal duties. In specific response in cross?examination about being confident in giving evidence that the pose of Pikachu was not derivative of any other pose already published, Mr Monahan said that every investigation he had done about the card making process enabled him to say that the cards were generated on their own and were not derivative of the animation, “common poses notwithstanding”.[4]

Further, unlike Perram J in Dallas Buyer’s Club, Pagone J also accepted that the certificate of copyright registration in the USA identifying Pokémon as the claimant to copyright ownership was sufficient to enliven the presumption under s 126B(3) of the Copyright Act. (Given the history of the provision recounted by his Honour, one might think this should not be too controversial: afterall, how many other countries out there have a copyright registration system?)

Copyright infringement

Pagone J then held that Redbubble had infringed the copyright in three ways. First, his Honour held that Redbubble infringed by communicating the infringing images from its website. Although the images were uploaded by third parties, Redbubble made the communication for the purposes of [s 22(6)][22]: Pagone J distinguished Redbubble’s position from that of ISPs like iiNet at [48]:

In the present case Redbubble does not provide the content of the communications in the sense of being the originator of any of the 29 images on its website said to be infringements of the Pikachu work. In each case the originator was the artist who had placed the image on the Redbubble website. Redbubble, however, was responsible for determining that content through its processes, protocols and arrangements with the artists. Redbubble’s position is not like that of an internet provider. Redbubble is the host of the website with the infringing material. It has a user agreement with artists which deals with matters including the possibility of infringing materials, an IP policy, and a team dedicated to deal with impermissible content.

Secondly, offering the products for sale online was sufficient to enliven s 38 which, amongst other things, extends to exhibiting “infringing” articles in public by way of trade.

Although there appear to have been some rather unspecific complaints about copyright infringement by Pokémon between 2012 and 2014,[5] Pagone J found that Redbubble knew, or ought reasonably have known, that the products were infringing from the date of the letter of demand from Pokémon’s external solicitors on 25 November 2015.[6]

Thirdly, Pagone J held that Redbubble had infringed Pokemon’s copyright by authorising the manufacture of the infringing products when orders for their purchase were placed.

In this respect, it is worth noting that Redbubble had implemented and acted on a notice and takedown system under the (US) DMCA.[7] Pagone J recognised, therefore, that Redbubble did not expressly authorise infringement and took conscious, considered and reasonable steps, both proactively and responsively, to prevent infringements.[8] These, however, were not enough. At [67], his Honour said:

The business established by Redbubble carried the inherent risk of infringement of copyright of the kind complained of by [Pokemon]. It is true that Redbubble sought to mitigate the risk, but it was an inevitable incident of the business, as Redbubble chose to conduct it, that there were likely to be infringements. It could have prevented them by taking other steps but for business reasons Redbubble chose to deal with the risk of infringement by a process that enabled the infringements to occur. Such infringements were embedded in the system which was created for, and adopted by, Redbubble. There may have been a sound commercial basis for Redbubble to manage the risks of infringement as it did, but in doing so it authorised the infringements which occurred.

Remedies

Pokémon sought $44,555.84 in damages by way of lost royalties for the consumer law breaches and only nominal damages for copyright infringement. As already noted, however, Pagone J awarded only $1 in total.

The evidence did not establish that sales made by Redbubble were lost sales by Pokémon. There was, for example, no evidence that many of the sales were sales of kinds of products sold by Pokémon or its licensees. For example, his Honour said:

…. Many of the items sold through the Redbubble website involved a “mash up” of images, such as the combination of Pikachu and Homer Simpson. The finding of an infringing use of a work, or an impermissible representation in trade, does not necessarily lead to the conclusion that the sale made by the infringement or upon the misrepresentation was necessarily a sale that would have been made by the wronged party. The unreliability of such an assumption in this case can be seen from the fact that the infringements were in the use of the image in mash ups in, and in items that were not sold or authorised for sale by [Pokemon]. ….

Given the notice and take down processes put in place by Redbubble, Pagone J was not prepared to find the infringements were “flagrant”, warranting the award of additional damages under s 115(4)

Pokémon Company International, Inc. v Redbubble Ltd [2017] FCA 1541


  1. Implementation and compliance with the DMCA scheme explicitly affected the ruling on additional damages.  ?
  2. Even if you haven’t played it, you must have seen all those people milling around in parks at lunchtime trying to “capture” these imaginary Pokémon Go “critters”. Pokemon itself has an even longer history. There are also trading card games and a successful television series which has been broadcast in Australia since 2000 and distributed on over 57,000 DVDs.  ?
  3. If you are not sweltering in the southern summer sun, s 18 provides “A person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.” And s 29(1)(g) and (h) prohibit making false or misleading representations in trade or commerce about sponsorship, affiliation or approval.  ?
  4. Curiously, at [44] (when discussing ownership by proof of a certificate), his Honour also said Pokémon had not proved ownership on the basis of authorship.  ?
  5. In fact, Pagone J subsequently found that Redbubble did in fact remove listings when Pokemon notified it that they were infringing.  ?
  6. It is less than clear from the judgment what action Redbubble took in response to the letter of demand. Ordinarily, one would assume that it had continued engaging in the infringing conduct but that seems a bit surprising given Pagone J records that Redbubble did comply with other take down notices once the subject of complaint had been properly identified.  ?
  7. The DMCA, being US legislation, does not provide protection from infringement in Australia under the Australian Copyright Act 1968. Redbubble also purported to operate under the corresponding Australian provisions ss116AA – 116AJ but, of course, it is not a carriage service provider and so they do not apply either.  ?
  8. Cf. esp. Section 36(1A)(c)[s36].  ?

Pokemon v Redbubble: the DMCA doesn’t apply Down Under Read More »

Pham Global 2: the new law of substantial identity

Having ruled that Pham Global’s trade mark was invalidly registered because Mr Pham was not the owner of the trade mark when he filed the application, the Full Court also indicated a substantially expanded role for the test of substantial identity in stating that Pham Global’s trade mark was substantially identical with Insight Clinical’s.

To recap, Insight Clinical’s trade mark is on the left below while Pham Global’s is on the right:

The trial Judge had applied the well-known ‘side by side’ test explained by Windeyer J:[1]

In considering whether marks are substantially identical they should, I think, be compared side by side, their similarities and differences noted and the importance of these assessed having regard to the essential features of the registered mark and the total impression of resemblance or dissimilarity that emerges from the comparison. “The identification of an essential feature depends”, it has been said, “partly on the Court’s own judgment and partly on the burden of the evidence that is placed before it”: de Cordova v. Vick Chemical Co. (1951) 68 R.P.C. 103, at p 106. Whether there is substantial identity is a question of fact ….[2]

capped with Gummow J’s summation in Carnival Cruise:

Thus, if a total impression of similarity emerges from a comparison between the two marks, the marks are “substantially identical”: Carnival Cruise Lines Inc v Sitmar Cruises Limited [1994] FCA 936; (1994) 120 ALR 495 at [62].

Generally, courts have found that the two trade marks must be virtually identical before a finding of substantial identity will be made.

The trial Judge had applied what many would consider to be a conventional analysis in rejecting substantial identity. At [18], her Honour held:

…. Whilst both composite marks use the word “insight”, there are clear visual differences in presentation. The appearance of the words “insight” and “radiology” in the IR composite mark run into each other, are equally prominent (the same font and size) and appear all in lower case. This is quite distinct from the words in the ICI composite mark where the letter “S” is capitalised in “inSight” and the words “Clinical Imaging” are secondary and beneath “inSight” in smaller and unbolded font. The capitalisation of the word “Sight” in “inSight” has the effect of emphasising the word “Sight”. There are also distinct visual differences in the appearance and positioning of the device. The ICI composite mark has a complete inner circle and is all in green with clear lines whereas the IR composite mark does not have a complete inner circle, the outside circle is in black and the lines are different. There is not a “total impression of resemblance”. The visual differences combined with the different wording, albeit that “imaging” and “radiology” may be interchangeable in relation to the services to which the marks relate, make the marks sufficiently different on a side by side comparison.

The Full Court held that the trial Judge had erred by failing to identify the essential features in the trade marks and make the comparison based on them. At [52], the Full Court stated:

…. The required exercise of side-by-side comparison is not carried out in a factual and legislative vacuum. The purpose of the exercise is to decide if two trade marks are substantially identical, where a trade mark is “a sign used, or intended to be used, to distinguish goods or services dealt with or provided in the course of trade by a person from goods or services so dealt with or provided by any other person” (s 17). Given this context, it is unlikely that the essential elements of a mark or its dominant cognitive clues are to be found in mere descriptive elements, which are not apt to perform this distinguishing role in respect of the relevant goods or services. While this does not mean that differences, including descriptive differences, may be ignored, it does mean that the side-by-side comparison is to be carried out cognisant of the essential elements of the mark. (emphasis supplied)

The Full Court held that the essential features of the two trade marks were the words “insight” and, to a lesser extent, the circular “eye” image. The words “radiology” and “clinical imaging” were merely descriptive and the differences in the circular devices were relatively minor. At [56]:

The essential elements are the words “Insight” and the device. The word is the same in both marks. The device appears to the left of the word in both marks. While the differences which her Honour noted do exist, the dominant cognitive clues in both marks is a device which is circular in shape evoking an eye to the left of the word “Insight”, in circumstances where the other words “clinical imaging” and “radiology” are descriptive of the services offered. The importance of the visual differences which her Honour noted, and which we accept exist, must be assessed having regard to these essential elements of the marks. Once this necessary exercise is undertaken, we consider that not only is there a total impression of resemblance between the marks, but also that the differences between the marks are slight having regard to their essential elements or the dominant cognitive clues which they present.

Accordingly, the Full Court considered that Insight Clinical’s opposition to registration of the trade mark should also have succeed on the grounds that Pham Global was not the owner of the trade mark based on Insight Clinical’s prior use of its trade mark.

The Full Court’s analysis, with respect, has all the hallmarks of a deceptive similarity analysis. Given their earlier ruling that the trade mark was invalid because Mr Pham as not the owner when he applied to register it, this part of the Full Court’s decision is obiter.

For most purposes, it does not make much difference as most cases involving a comparison of marks ultimately turn on deceptive similarity.

It is (if followed), however, particularly significant in the context of ownership disputes. As Janice Luck (here and here) has noted, the Full Court’s approach gives much wider scope for the operation of s 58. It blurs the operation of the test for substantial identity with the test for deceptive similarity in ways arguably previously thought outside the scope of an ‘ownershp’ objection. In Carnival Cruise under the 1955 Act, for example, Gummow J had continued after the summation of principle quoted above:

…. The phrase “substantially identical” as it appears in s. 62 (which is concerned with infringement) was discussed by Windeyer J in The Shell Company of Australia Limited v Esso Standard Oil (Australia) Limited (1963) 109 CLR 407 at 414. It requires a total impression of similarity to emerge from a comparison between the two marks. In a real sense a claim to proprietorship of the one extends to the other. But to go beyond this is, in my view, not possible. There is, as Mr Shanahan points out in his work, p. 158, real difficulty in assessing the broader notion of deceptive similarity in the absence of some notional user in Australia of the prior mark (something postulated by s. 33) or prior public recognition built up by user (para. 28 (a)). [3] (emphasis supplied)

It means that we won’t be able to concede, or skip over, the “substantially identical with” limb of trade mark comparisons in future.

The Full Court’s explanation of the operation of s 60 will have to await a future post.

Pham Global Pty Ltd v Insight Clinical Imaging Pty Ltd [2017] FCAFC 83 (Greenwood, Jagot and Beach JJ)


  1. The Shell Co. of Australia Ltd v Esso Standard Oil (Australia) Ltd (1963) 109 CLR 407 at 414; [1963] HCA 66.  ?
  2. Notwithstanding the high authority of Windeyer J’s statement, it is worth noting that Lord Radcliffe appears to have been referring to identification of essential features in the context of assessing whether or not a trade mark was likely to cause confusion or deception – the test for deceptive similarity. Thus, Lord Radcliffe rejected the appeal against the finding of infringement because “The likelihood of confusion or deception in such cases is not disproved by placing the two marks side by side and demonstrating how small is the chance of error in any customer who places his order for goods with both the marks clearly before him, for orders are not placed, or are often not placed, under such conditions. It is more useful to observe that in most persons the eye is not an accurate recorder of visual detail, and that marks are remembered rather by general impressions or by some significant detail than by any photographic recollection of the whole.” Compare de Cordova to s 10.  ?
  3. Note also the questions his Honour posed at 58.  ?

Pham Global 2: the new law of substantial identity Read More »

Don’t file in the wrong applicant’s name

Because, if you do, the Full Court has definitively ruled that the error cannot be rectified and any resulting registration will be irredeemably invalid.

This is the first of at least two rulings departing from the trial judge’s reasons which the Full Court made in the course of dismissing Pham Global’s appeal from the decision to revoke its trade mark registrations and find it infringed Insight Clinical Imaging’s trade marks. So Pham Global still lost, but with ramifications for us all.

Some background

Since 2008, Insight Clinical Imaging has been using the name INSIGHT and its composite mark for its radiology services largely in Perth, WA.[1]

Mr Pham is a radiologist and the sole director of the company through which a radiology business is conducted in NSW. Originally, the company was called AKP Radiology Consultants Pty Ltd. In December 2011, however, Mr Pham applied to register the Insight Radiology mark as a trade mark for radiology services.

Insight Clinical’s trade mark is below on the left. On the right below is the trade mark applied for by Mr Pham.

In March 2012, AKP Radiology Services first started using the Insight Radiology mark for its business.[2]

On 6 June 2013, Insight Clinical lodged its opposition to Mr Pham’s application.

On 17 June 2013, Mr Pham’s company changed its name from AKP Radiology Services to Insight Radiology Pty Ltd.[3] Then, on 1 July 2013, Mr Pham sought to assign the trade mark application to his company.

Insight Clinical Imaging’s opposition was successful before the Office and Mr Pham’s company appealed unsuccessfully. In accordance with the trial judge’s orders, Mr Pham’s company then changed its name to Pham Global Pty Ltd and sought leave to appeal.

While leave was granted, the appeal was dismissed.

Who is the applicant

The trial judge found that the Insight Radiology mark was designed for, and used by, Mr Pham’s company. It even paid the designer.

Mr Pham, however, maintained that it had not been a mistake that the application was made in his name rather than the company’s. There was no evidence that Mr Pham ever actually licensed his company to use the trade mark. Moreover, Mr Pham’s explanation for why he decided to assign the application to his company – “I just did it” – was not accepted. He explicitly rejected the proposition that he made the assignment in response to Insight Clinical’s opposition to registration of the trade mark or that it was a result of a mistake.

Accordingly, her Honour held that Mr Pham was not the owner of the application when it was made, his company was. In line with the decisions in Mobileworld and Crazy Ron’s, however, her Honour found that the assignment of the application to the company before the trade mark was actually registered rectified the error.

On appeal, the Full Court noted that Mobileworld and Crazy Ron’s were both obiter on this point.

The Full Court then noted that longstanding precedent required that grounds of opposition were assessed at the date the application was filed. That meant that, where the ground of opposition was under s 58 that the applicant was not the owner of the trade mark,[4] the applicant when the application was filed had to be the owner of the trade mark. At [32], the Full Court said:

Once it is understood that the legislative scheme operates in the context of established principle that the alternative sources of ownership of a trade mark are authorship and use before filing an application for registration or the combination of authorship, filing of an application for registration and an intention to use or authorise use, the relationship between s 27 and ss 58 and 59 of the 1995 Act becomes apparent. The grounds of opposition in ss 58 and 59 reflect the requirements of s 27. Only a person claiming to be an owner may apply for registration. That claim may be justified at the time the application is made based on either alternative source of ownership. But if the claim is not justified at that time, ss 58 and/or 59 are available grounds of opposition. Moreover, if the applicant is not the owner of the mark at the time of the filing of the application, the assignment provisions in ss 106 – 111 do not assist because they authorise the assignment of the mark and thus pre-suppose, consistent with established principle, that the applicant owns the mark.

Well, it’s a nice simple rule; should be pretty straightforward to apply in practice shouldn’t it? Of course, it does mean that the law for trade marks is way out of step with the law for patents and registered designs, sections 22A and 138(3)(4).[5]

When time permits, I shall try to do a post on the new law of substantial identity.

Pham Global Pty Ltd v Insight Clinical Imaging Pty Ltd [2017] FCAFC 83 (Greenwood, Jagot and Beach JJ)


  1. It did not apply to register its trade mark until October 2012.  ?
  2. On 17 June 2013, Mr Pham caused AKP Radiology Consultants to change its name to Insight Radiology Pty Ltd. As a consequence of the first instance decision, however, the name of the company was changed again – to Pham Global Pty Ltd.  ?
  3. Mr Pham’s company also made a further application to register the words INSIGHT RADIOLOGY alone. Insight Clinical has also opposed it, but it appears to be stayed pending the outcome of the court case. (There was also an earlier application in 2008, TM Application No 1236945 for INSIGHT IMAGING / INSIGHT RADIOLOGY. This application was made by a Daniel Moses and a Jason Wenderoth, but lapsed after acceptance without ever becoming registered.)  ?
  4. The same principle applies under s 59, which was also in play.  ?
  5. Foster’s Australia Limited v Cash’s (Australia) Pty Ltd [2013] FCA 527.  ?

Don’t file in the wrong applicant’s name Read More »

A couple of other points from Insight on appeal

Following on from the earlier post, the Full Court did, however, dismiss ACER’s appeals against Besanko J’s rulings that:

  1. Dr Hart owned the copyright in the SOQH, even though it was created while he was employed by the Department of Education; and
  2. The assignment of the right to sue for past infringements was valid.[1]

The ruling on the right to sue for past infringements is particularly important as it is the first substantial appellate consideration of the question. It is all the stronger because it was executed some 2 years after the assignment of copyright but Besanko J and the Full Court found there was sufficient nexus with the copyright assignment to support its validity.

Insight SRC IP Holdings Pty Ltd v Australian Council for Educational Research Ltd [2013] FCAFC 62


  1. Bit more on the ownership, assignment and additional damages questions here. ?

A couple of other points from Insight on appeal Read More »

Mediaquest v Registrar

It turns out that the Registrar does have power to undo an assignment of a registered trade mark that has been registered wrongly.

A Mr Brailsford was the registered owner of the Peel Away trade mark for paint stripping preparations, TM No. 741047. He died in 2008.

On 23 Setember 2010, trade mark attorney McInnes filed an application to register an assignment of the trade mark to Mediaquest.

On 8 October 2010, the Registrar registered the assignment and Mediaquest became the owner of TM No. 741047.

On 12 November 2010, trade mark attorney Wilson wrote to the Registrar complaining about the registration of the assignment without notification to him and challenging it. Mr Wilson was acting for Mr Brailsford’s heirs and had been the address for service entered in the Register when the application to register the assignment was lodged.[1]

On 22 November 2010, the Registrar wrote to Mr McInness stating that the documentation relied on to establish the assignment was inadequate and so the Registrar intended to cancel the registration of assignment pursuant to s 81. Mediaquest objected to this and pointed out, amongst other things, that it had withdrawn a pending non-use action once the assignement was registered.

Further correspondence took place and, in due course, a hearing at which the delegate concluded Mediaquest had not established its entitlement to be registered as the assignee. Mediaquest appealed.

On appeal, Emmett J held that:

1 Mediaquest was not entitled to an assignment; and
2 the Registrar did have power to cancel the registration of the assignment.

Ownership

Mediaquest claimed it had an assignment from CRT. Mr Brailsford was the president and a director of CRT. Mediaquest sought to argue that his registration of TM No 741047 in Australia was in breach of his duties to CRT as a director and consequently the trade mark belonged in equity to CRT and, as a result of an assignment from CRT to Mediaquest, to it.

It seems Mr Brailsford may well have coined the mark and used it in the USA. At one point, the US mark was owned by another of Mr Brailsford’s companies, Pilgrim. In November 1992, Pilgrim assigned all its rights to Mr Brailsford and, in August 1993, Mr Brailsford assigned all his (US)[2] rights to CRT. It was after this, in 1997, that Mr Brailsford applied to register what became TM No. 741047 in Australia in his own name. In 1998, CRT applied to register a patent in the UK, identifying Mr Brailsford as the inventor and claiming entitlement through agreement with him.[3]

Emmett J found Mr Brailsford was entitled to register TM No. 741047 in his own name:

  • CRT was clearly the owner of the US trade marks;
  • both Pilgrim and CRT were creatures of Mr Bailsford;
  • while CRT was incorporated in Jersey in the Channel Islands, there was no evidence that it had ever traded anywhere other than in the USA or the UK.

At [34]:

The contention advanced on behalf of Mediaquest is that Mr Brailsford acquired the opportunity to register the Peel Away Mark in Australia by reason of his being a director of CRT. However, that can only be an inference. The circumstance that Mr Brailsford had dealings with the Peel Away mark before CRT was incorporated gives rise to a contrary inference. That is to say, it does not necessarily follow that the opportunity of registering the Peel Away mark in Australia was one that came to Mr Brailsford by reason of his being a director of CRT. Rather, an inference is at least available, and may perhaps be more easily drawn, that CRT acquired whatever opportunity it had to exploit the Peel Away Mark, and associated technology and knowhow, because Mr Brailsford chose to make it available to CRT. (emphasis supplied)

In these circumstances, his Honour concluded at [36] that the opportunity to register the trade mark in Australia did not come Mr Brailsford’s way because of his role in CRT and so CRT was not entitled to the trade mark in equity.

Power to cancel

Section [88(2)(e)] provides a power to rectify the Register on the basis that an entry in the Register “was made, or has previously been amended, as a result of fraud, false suggestion or misrepresentation.” This power, however, is conferred on the Court, not the Registrar.

Emmett J noted that under s 109 and s 110 the Registrar only had power to register an assignment of a trade mark. Whether there had been a valid assignment was a jurisdictional fact and, if there had not been a valid assignment, there was no power to register the assignment. In such a case, therefore, the Registrar had power to cancel the erroneous entry. As a result at [54]:

There was no actual assignment of the Registered Mark to Mediaquest, either from Mr Brailsford or from his executors. Accordingly, the Registrar’s decision of 8 October 2010 to record the assignment in the Register was tainted by jurisdictional error and was no decision at all. It was therefore open to the Registrar to reconsider whether the duty imposed by s 110 had been enlivened, by revisiting the question of whether there was an actual assignment or transmission of the Registered Mark to Mediaquest. Having determined that there was no actual assignment or transmission, it was open to the Registrar to take steps to cancel the earlier action. There is nothing in the Act to indicate that a decision of the Registrar under Part 10 that was affected by jurisdictional error should continue to have legal effect. Indeed the considerations outlined above suggest the contrary.

In answer to Mediaquest’s concerns about the uncertainty this would give rise, Emmett J pointed out at [56] that:

the scheme of the Act is not proprietorship by registration but registration of proprietorship. Registration under the Act is only prima facie evidence of ownership, as is provided by s 210. The registered owner is always susceptible to action being taken under Part 8 to revoke a trade mark that should never have been registered, or to substitute the true owner of the trade mark for that of a wrongful claimant. True ownership of a trade mark is a defence to infringement proceedings brought under the Act.

That is, registration was only prima facie evidence of ownership. Accordingly, all registrations were subject to an inherent level of uncertainty.

One interesting aspect of his Honour’s approach is that it does not appear to be based on the power conferred by s 81. Rather, it seems to have a much more fundamental underpinning in “jurisdictional error”.

No doubt, there is a sense here that the Court is not interested in technicalities that would force all of these types of disputes to be brought before it rather than knocked on the head in the Office. One might wonder, however, why the Registrar does not require documentation signed by the assignor as well as the assignee in the first place. This may well become more of an issue with the recordal of security interests as the Registrar’s practice is apparently to allow an interest to be recorded by the person claiming to have taken out a security interest alone.

Mediaquest Communications LLC v Registrar of Trade Marks [2012] FCA 768


  1. At the moment, as a result of Emmett J’s decision, Mr Brailsford is shown as the owner, but (presumably) Mr McInnes’ firm is shown as the address for service.  ?
  2. It is not clear from the judgment whether the agreement was in terms limited expressly to the US rights or this is an inference from the limited rights then existing.  ?
  3. The nature of the agreement is not specified in the judgment.  ?

Mediaquest v Registrar Read More »

Arbitrating IP disputes in Australia

Last year, IPwars reported on Hammerschlag J’s ruling that arbitrators under the Commercial Arbitration Acts 1984 (here and here (repealed and replaced by a 2010 Act)e.g.) can settle disputes about (1) the ownership of improvements under a technology licence agreement and (2) the licence fees payable if the technology be exploited in various ways in the future.

The arbitrator has now made an award finding that the patents owned by Lloyd or its subsidiary Solfast, the Solfast and Asura patents, were improvements covered by the licence and so should be assigned to Larkden.

Larkden has secured from Hammerschlag J orders enforcing that award and so requiring Lloyd to transfer ownership to Larkden.

Section 35 of the Commercial Arbitration Act 2010 (NSW) provides that an arbitrator’s award must be recognised and is enforceable subject to the formal requirements of s 35 and substantive grounds in s 36. The substantive grounds are:

Grounds for refusing recognition or enforcement

(1)Recognition or enforcement of an arbitral award, irrespective of the State or Territory in which it was made, may be refused only:

(a)at the request of the party against whom it is invoked, if that party furnishes to the Court proof that:

(i)a party to the arbitration agreement was under some incapacity, or the arbitration agreement is not valid under the law to which the parties have subjected it or, failing any indication in it, under the law of the State or Territory where the award was made, or

(ii)the party against whom the award is invoked was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to present the party’s case, or

(iii)the award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration, or it contains decisions on matters beyond the scope of the submission to arbitration, provided that, if the decisions on matters submitted to arbitration can be separated from those not so submitted, that part of the award which contains decisions on matters submitted to arbitration may be recognised and enforced, or

(iv)the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties or, failing such agreement, was not in accordance with the law of the State or Territory where the arbitration took place, or

(v)the award has not yet become binding on the parties or has been set aside or suspended by a court of the State or Territory in which, or under the law of which, that award was made, or

(b)if the Court finds that:

(i)the subject-matter of the dispute is not capable of settlement by arbitration under the law of this State, or

(ii)the recognition or enforcement of the award would be contrary to the public policy of this State.

Lloyd argued that the award in relation to the Solfast patents fell foul of s 36(1)(a)(iii) because the shares in Solfast, originally owned by Lloyd, had been transferred to GENV. Hammerschlag J found this was untenable: the transfer of shares in Solfast was void and set aside under s 267(1) of the Corporations Act. In addition, although developed by Solfast, the Solfast patents were improvements within the meaning of the licence because Lloyd had developed the patents through the medium of Solfast.

Lloyd’s second argument was predicated on s 36(1)(b)(ii) contending that some of the orders in the award were too vague and uncertain to be enforceable. This allegation included the order that Lloyd take all necessary steps to ensure that [Lardken]’s interests in the prosecution of the Assigned Patent Applications are protected and secured.

Hammerschlag J rejected this ground too. The orders were not vague and uncertain. Further, his Honour doubted they would offend public policy as not sufficiently concerning “the State’s basic notions of morality and justice”.

Larkden Pty Limited -v- Lloyd Energy Systems Pty Limited [2011] NSWSC 1331

The arbitrator.

Arbitrating IP disputes in Australia Read More »

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