Friday, August 21, 2015

The plot thickens: a twist in the Dallas Buyers Club v iiNet saga

By Richard Sawyer, Lawyer

The courtroom drama between Dallas Buyers Club LLC (Dallas) and internet service provider iiNet has had many of the hallmarks of a great film: scenes of fiery cross-examination, a suspenseful cliff-hanger judgment and now an eleventh-hour plot twist.

Following a new judgment by Federal Court Justice Nye Perram, iiNet will not have to hand over the names and contact details of any of its customers to Dallas. That is, unless Dallas undertakes to demand only a narrow category of damages from those customers and guarantee that undertaking with a $600,000 bond.

Friday, August 14, 2015

RCEP – the next big thing?

By Claire McMahon, Associate

We reported on 12 August and 13 August on the recent (failed) round of TPP negotiations. During the current TPP hiatus, focus has begun to turn to another 'secretive' proposed trade agreement in Asia, the Regional Comprehensive Economic Partnership (RCEP). Although negotiations for RCEP started in November 2012, there has been little coverage about this agreement relative to the TPP and (as yet) no leaks of texts approved or otherwise.

What is known is that the RCEP negotiations involve the ten ASEAN member states, as well as Australia, China, India, Japan, South Korea and New Zealand. The negotiations are said to cover trade in goods, trade in services, investment, economic and technical cooperation, intellectual property, competition and dispute settlement.

Thursday, August 13, 2015

Another TPP draft leaked – and no one is happy

By Claire McMahon, Associate

Another leaked draft of the intellectual property chapter of the Trans-Pacific Partnership (TPP) has been released by KEI Online, no doubt to the dismay of negotiators who are struggling to reach agreement on final outstanding issues (and they thought WikiLeaks was all they had to worry about).

The most recent draft is dated May 11, 2015. The text was released just after the most recent (failed) round of negotiations in Hawaii. (We don't like to suggest conspiracy theories – we leave that to the mainstream media here, but one has to wonder about timing…) As discussed in our earlier post, despite paddling madly to make some waves, the negotiations were a total wipeout, with all 12 trade ministers walking away without reaching agreement. Hawaii :1, TPP: 0. Gnarly.

We tried to dampen some of the media-fed flames surrounding the TPP in a post earlier this year. But the furore surrounding illegal downloading provisions is so yesterday: enforcement is the new tag word that has everyone riled up. Parties are at odds in relation to what civil measures should be implemented against entities who abuse enforcement procedures, and when criminal penalties can be imposed on infringers.

Wednesday, August 12, 2015

Trans-Pacific Partnership negotiations: a total wipeout?

By Claire McMahon, Associate

Unlike Mick Fanning in J Bay, the Trans-Pacific Partnership trade talks took a heavy dumping in Hawaii earlier this month, with the 12 trade ministers walking away from the meeting without reaching agreement. Apparently all 25 chapters of the TPP have now been drafted (and more on this in our next post), but there are several matters still making waves.

We’ve previously discussed some of the issues plaguing the TPP negotiations. This time around, Australia seems to be a sticking point. As reported, Australia is refusing to sign unless certain Australian organisations are made exempt from investor-state dispute settlement rules in relation to decisions concerning public health, safety and the environment. Australia's likely objective is to avoid investor-state claims in external tribunals in relation to the government's health and environment policies. However, existing TPP language would already effectively exempt these 'except in rare circumstances', so it is not clear whether Australia will continue to push for this amendment.

Friday, August 7, 2015

Copyright cook-off: Channel Nine survives Seven's bid to turn off The Hotplate

By Kaelah Ford, Lawyer

Australia's love affair with reality television is perhaps most passionate when it comes to cooking shows. From croquembouche and crayfish, to French chefs with a certain je ne sais quoi, viewers can't seem to get enough of the drama that comes with tossing contestants into the proverbial pressure cooker for a prime-time culinary contest.
 
The competition between rival shows recently reached boiling point with Channel Seven commencing Federal Court proceedings against Channel Nine and its production company, Endemol (together Nine) for copyright infringement. Seven alleges that Nine's show The Hotplate infringes the copyright in its show My Kitchen Rules (MKR). Seven sought an interlocutory injunction restraining the broadcast of The Hotplate until the final determination of the proceedings.

In a judgment handed down on 6 August 2015, Justice Nicholas refused to grant the injunction, allowing The Hotplate to remain on air1. Notwithstanding this, he found that Seven had a reasonably arguable case for copyright infringement.

It is unusual to see a copyright case in this context, as copyright does not protect 'ideas' for television shows. In the past, copyright infringement has been made out where one television show used excerpts from another2. Copyright may also exist in the script for a TV show – but this would be difficult to establish for an 'unscripted' reality show.  In this case, Channel Seven claims that copyright exists in the literary production materials behind MKR, as well as 'dramatic works' consisting of combinations of various elements, including incidents, plot, images and sounds in the MKR episodes.

We take a closer look at Seven's case and the court's reasons for denying interlocutory relief below.


Principles

It was accepted that two inquiries needed to be made to determine whether Seven should be granted an interlocutory injunction:
  1. Whether Seven had made out a prima facie case of copyright infringement by Nine; and
  2. Whether the balance of convenience favoured the grant of the injunction.


Seven's case


Seven alleges that by producing and broadcasting episodes of The Hotplate, Nine has reproduced in a material form, a substantial part of Seven's copyright in various original literary and dramatic works.
The original literary works said to be infringed include the format pitch and presentation for MKR, the MKR 'Production Bible' and the 'Instant Restaurant Producers Shooting Guide' (the MKR literary works).

The dramatic works said to be infringed are the combination and series of incidents, plot, images and sounds reduced to material form in:

(a) Series 1, Episode 1 of MKR;
(b) the whole of Series 1 of MKR;
(c) the whole of Series 5 of MKR; and
(d) the whole of Series 6 of MKR.
(the MKR dramatic works).

Section 10 of the Copyright Act 1968 (Cth) defines 'dramatic work' to include a scenario or script for a cinematograph film. It was not disputed by Nine that a scenario for a television program or series may qualify as a dramatic work. Justice Nicholas said that the 'choice and arrangement of plots, characters and situations may create their own dramatic effect independent of the language in which such matters are ultimately conveyed'. As with a literary compilation, a dramatic work consisting of a combination of stock elements brought together by the exercise of skill, judgment or labour may constitute an original work, even if individually, some of the elements lack originality.
 
Nine did not admit that copyright subsisted in any of the alleged copyright works. Nine's argument was summarised by Justice Nicholas as follows: 'Seven's dramatic work is a successful but nonetheless unimaginative collection of unoriginal ideas and situations found in earlier reality television programs.'

Each side put on evidence of the similarities and differences they allege exist in each of the shows. While not making any final determination on infringement, Justice Nicholas noted that the format of the programs 'seems to be very similar'.

Justice Nicholas considered that Seven has a reasonably arguable case that the similarity between the shows is the result of direct or indirect copying.  However, he did not accept Seven's submission that it has a strong prima facie case. The Full Court has previously held that the apparent strength of an applicant's case may be an important consideration in determining whether the balance of convenience favours granting interlocutory relief3.


Balance of convenience


Seven submitted that the following factors weighed in favour of the grant of an injunction:
  • the loss of exclusive rights in television content would affect Seven's ability to compete;
  • important and valuable licensing arrangements would be diminished if the injunction was not granted; and
  • it would be difficult to quantify damages in the event that the injunction was withheld.
Justice Nicholas was not persuaded by those arguments. He considered that any loss of exclusivity suffered by Seven could be remedied reasonably quickly, and that a final hearing of the proceeding could be heard before any new series of The Hotplate was broadcasted. He did not accept that any of Seven's commercial arrangements would suffer merely due to the refusal to grant an injunction, as Seven would have the opportunity to vindicate its rights at a final hearing.

While Justice Nicholas accepted that it can be difficult to quantify loss in cases such as this, he considered that Seven's difficulties in proving its damages would not be any greater than those that would be experienced by Nine in the event that Nine was required to prove its damages. In addition, Nine had existing commitments with advertisers for the remainder of season 1 of The Hotplate. Justice Nicholas considered that it would be difficult for Nine to re-establish momentum in The Hotplate if it were 'abruptly halted by injunction and then 'shelved' for however many months it takes to determine the proceeding'. The balance of risk of 'doing an injustice' ultimately weighed in Nine's favour.


Food for thought


This case serves as a good illustration of the factors that will be taken into account when the court is considering a grant of interlocutory relief. The strength of the applicant's case is likely to be of significance in persuading the court to grant an injunction.

While Seven has lost this battle, the war is not over. We will have to stay-tuned to see if Seven decides to proceed with its culinary crusade and more importantly, if it can establish that copyright subsists in the MKR works. No doubt the proof will be in the pudding.

1. Seven Network (Operations) Limited v Endemol Australia Pty Limited [2015] FCA 800.
2. TCN Channel Nine Pty Limited v Network Ten Pty Limited (No 2) [2005] FCAFC 53.
3. Samsung Electronics Co Ltd v Apple Inc (201) 217 FCR 238 ay [52]-[57].

Wednesday, August 5, 2015

Pipe dreams: director's liability for authorising patent infringement

By Sarah Matheson, Partner, and Vacation Clerk, Chandni Dhingra

Wastewater systems … how to connect the pipes, how to construe the patent claims… all fascinating stuff, but the focus for this post is whether a director 'authorised' his company's patent infringement or was liable as a joint tortfeasor.


Background


Having established that Sewerage Management Services (SMS) had infringed its standard patent for a pipe connector, Blueport turned its attention to a former director of SMS, Mr Chappell. Blueport alleged he had authorised SMS's infringement and was liable as a joint tortfeasor.

The reason may lie in Mr Chappell's evidence that at relevant periods SMS could not pay him a salary nor provide him full time employment. This may also explain why Mr Chappell had various other jobs during his directorship. More on that later…

Thursday, July 30, 2015

Court rules that domain names can be transferred at interlocutory stage

By David Stewart, Senior Associate, and Natasha Dixon, Vacation Clerk

The recent Federal Court decision in Thomas v Humantech [2015] FCA 541 shows that a court will be prepared to order the transfer of a domain name at an interlocutory stage in certain circumstances, and also provides a useful reminder of what is required by a party to satisfy an obligation to negotiate in good faith.


Background


Thomas International (TIL) is an English company that operates a business providing psychological assessments, predominately through the internet. TIL operates a central online hub in the UK that can be accessed by TIL's distributors and customers by logging into the TIL website. Since 2007, TIL's services have been distributed in Australia by Humantech (a company that was ultimately controlled by a Mr Schutte), under an agreement by which Humantech was given exclusive rights to appoint a distributor in Australia and to register domain names relating to the business.