Six steps to strategic enforcement of IP rights in Australia

Six steps to strategic enforcement of IP rights in Australia

Six steps to strategic enforcement of IP rights in Australia

Proper assessment at the earliest stage of jurisdiction, forum, evidence and timing issues will go a long way towards protecting your intellectual property rights. Joy Atacador and Claire Ramsay share six steps to formulating a winning enforcement strategy. This story first appeared in the April 2010 issue of Asia IP.

Proper assessment at the earliest stage of jurisdiction, forum, evidence and timing issues will go a long way towards protecting your intellectual property rights. Joy Atacador and Claire Ramsay share six steps to formulating a winning enforcement strategy.

Some useful guiding principles for strategic enforcement of IP rights can be gleaned from the approach taken by Australian courts in recent copyright and trademark cases.

Consider if the Rights Arise Under Australian Laws

Frequently, a dispute which involves global IP rights will be multi-jurisdictional and a decision must be made at the outset about the appropriate forum in which enforcement action should be taken.

The case of TS Production v. Drew Pictures [2008] FCAFC 194 is illustrative. The applicant commenced an action to confirm its ownership of the copyright in the film and book entitled The Secret. The respondents then brought an action in the United States claiming their joint ownership of the copyright and subsequently applied for a stay of the Australian proceedings. The primary judge granted a stay of the Australian proceedings pending the outcome of the Illinois proceedings on the grounds that Australia was a “clearly inappropriate forum.”

On appeal, the Full Federal Court of Australia unanimously set aside the order made by the primary judge, determining that the Federal Court was not a “clearly inappropriate forum” to determine issues of ownership of copyright under Australian law, which can only be resolved by an Australian court.

Issue in the Right Court to Maximise Costs Recovery

When considering the appropriate court in which to issue proceedings, it is particularly important to have regard to Order 62, Rule 36A of the Federal Court Rules which provides as follows:

36A Reduction in costs otherwise allowable

(1) Where a party is awarded judgment for less than [A]$100,000 on a claim (not including a cross-claim) for a money sum or damages any costs ordered to be paid, including disbursements, will be reduced by one-third of the amount otherwise allowable under this Order unless the Court or a Judge otherwise orders.

(2) If the Court or a Judge is of the opinion that a proceeding (including a cross-claim for a money sum or damages) brought in this Court could more suitably have been brought in another court or in a tribunal and so declares, then any costs to be paid, including disbursements, will be reduced by one-third of the amount otherwise allowable under this Order.”

If proceedings are brought in the Federal Court of Australia and a judgment for less than A$100,000 (about US$92,600) is awarded, there is a risk that any costs award made in favour of a successful applicant will be reduced by one-third. Thus, in Nokia Corporation v. Liu [2009] FCAFC 138, the Full Court of the Federal Court of Australia considered an appeal from the primary judge’s decision that because the applicant had obtained only nominal damages (there having been inadequate disclosure and discovery by the respondent), the applicant’s costs in the entire proceedings were reduced by one-third of the amount allowable pursuant to Order 62 Rule 36A.

The Full Court observed that trademark infringement proceedings are matters which are properly to be brought in the Federal Court. It is common practice in intellectual property infringement proceedings to split the issues of liability and, if appropriate, the grant of injunctive relief on the one hand, and on the other hand, the quantum of relief. Hence, orders for discovery and disclosure on damages or an account of profits are often deferred until liability for infringement has been established. In the circumstances, the Full Court considered that the cost minimisation principle should not have been applied up to the date that the consent orders granting injunctive relief and delivery up were made, however costs from the date of the hearing on the assessment of damages were reduced by one-third.

Costs may also be discounted if the Court determines that the proceeding could have been more suitably brought in a lower level court. IP matters are usually brought in the Federal Court of Australia and may also be brought in the state and territory Supreme Courts. The Federal Magistrates Court of Australia (FMC) is a lower level court which has been conferred with jurisdiction to hear certain civil copyright and consumer protection matters such as misleading and deceptive conduct claims. The FMC can also hear matters within its associated jurisdiction and matters transferred by the Federal Court. The Australian Government is, however, proposing a restructure of the federal courts system pursuant to which the functions of the FMC in federal law matters will be merged into the Federal Court.

Lodge a Notice of Objection with the Australian Customs Border & Protection Service

Lodging a Notice of Objection with the Australian Customs Border & Protection Service (Customs) is a cost-effective means of preventing goods that infringe copyright and trademark rights from being released into the Australian market.
A registered trademark owner, an authorised user of a mark, the owner of copyright material or its exclusive licensee can lodge a Notice of Objection with Customs by providing details of registered Australian trademarks or copyright material. Multiple trademarks or copyright material can be included in a Notice of Objection, which is effective for four years. A Notice may be updated and extended for a further period by re-lodgement.

Once a Notice of Objection has been lodged, if Customs becomes aware of a shipment of suspected infringing goods imported into Australia, it has the power to seize such goods for a limited period. More often than not, seized goods will be voluntarily forfeited by the importer upon receiving a legal letter demanding undertakings to cease infringing the objector’s copyright or trademark rights.

Be Prepared to Act Fast

In certain instances it may be necessary to seek urgent interlocutory relief. This may arise in the context of counterfeit goods seized by Customs pursuant to a Notice of Objection, as it did in the Nokia v. Liu case where an interlocutory injunction application was made to the Court to restrain Customs from releasing seized goods to the importer.

There are tight timeframes for commencing action in order to prevent the release of suspected infringing goods that are seized by Customs pursuant to a Notice of Objection. Under Australia’s Notice of Objection scheme, infringement proceedings must be commenced within 10 working days (up to a maximum further 10 working days if an extension is granted) of the trademark or copyright owner being notified of a seizure. Within 20 working days of an action being brought, it is necessary to obtain a Court order preventing the goods from being released, otherwise the goods must be released to the importer.

Outlines of pleadings and evidence to support an interlocutory injunction can be prepared in advance in contemplation of urgent action and may later be adapted in other disputes.

Where timing is imperative, commencing proceedings in the Federal Court of Australia’s Fast Track should also be considered. Matters which concern IP rights apart from patents can be conducted in accordance with the Federal Court’s Fast Track Directions for trials that are likely to run for not more than five hearing days. An initial directions hearing/scheduling conference will be held not less than 45 days from the date that an application is filed and a trial date will be set in the case between two and five months thereafter, depending on the relative complexity of the case.

Maintain Records of Creation, Authorship and Ownership

Contemporaneous records of the development process of copyright material, including the identity of authors, their creative contributions and working drafts; publication dates; assignment and ownership documents should be kept as they may ultimately be required as evidence. The failure to identify the authors of a work and each author’s respective creative contributions to the form and expression of ideas/information can be fatal to a copyright infringement claim.
In Elwood Clothing Pty Ltd v. Cotton On Clothing Pty Ltd [2008] FCAFC 197 the question which arose was whether t-shirts produced by the respondent infringed the copyright of the applicant in a t-shirt design and swing tag design. In an action for copyright infringement, it is necessary to:

  1. identify the work in suit in which copyright exists;
     
  2. identify in the alleged infringing work the part that has been taken; and
     
  3. determine whether the part taken constitutes a substantial part of the work in suit.

The Full Court of the Federal Court of Australia accepted that the evidence established that the t-shirt design was an artistic work comprising the layout, balancing, form, font, positioning, shape and interrelationship of the various elements and that even though the logo and numbers were different in the respondent’s t-shirt design, a substantial part of the applicant’s t-shirt design and of the applicant’s swing tag had been reproduced by the respondent.

In IceTV Pty Ltd & Anor v. Nine Network Australia Pty Ltd [2009] HCA 14, the High Court of Australia considered significant issues of authorship, ownership and subsistence of copyright in compilations, and what constitutes reproduction of a substantial part for the purposes of establishing infringement of compilation copyright. It was alleged that copyright subsists in Nine’s weekly television program broadcasting schedules and that IceTV had infringed that copyright by reproducing a substantial part of the weekly schedules in IceTV’s electronic program guide. Although IceTV conceded in the case that copyright subsisted in the weekly schedules and was owned by Nine, Justices Gummow, Hayne, and Heydon observed (at [105]) that:

To proceed without identifying the work in suit and without informing the enquiry by identifying the author and the relevant time of making or first publication, may cause the formulation of the issues presented to the court to go awry.
The High Court ultimately concluded that the IceGuide did not infringe Nine’s copyright. The case highlights the importance of adducing evidence that significant skill and labour has been expended in expressing facts and information so as to attract copyright protection as a compilation.

In Larrikin Music Publishing Pty Ltd v. EMI Songs Australia Pty Limited [2009] FCA 799 the Federal Court of Australia was asked to consider the preliminary question of whether the applicant, a music publisher, is the owner of the copyright in the iconic Australian children’s singing round “Kookaburra Sits in the Old Gum Tree” (Kookaburra). On the preliminary ownership issue, it was held that by a series of assignment and confirmatory documents, the title to the copyright in Kookaburra had been assigned to the applicant.

Be Mindful of Limitation of Action Periods

In the Larrikin v. EMI case, it was claimed that two of the four bars of Kookaburra are reproduced in the flute riff of the anthemic Australian pop song “Down Under.” At first instance ([2010] FCA 29), copyright infringement was established and it was also held that the respondents had since 1982 made misleading and deceptive representations as to their entitlement to the entire proceeds from Down Under to royalty collecting agencies. The Court decided that the applicant was not statute barred from maintaining these claims notwithstanding the length of time that had passed since the representations were first made. The compensation claim would, however, be limited to acts performed in the past six year period before the commencement of the proceedings.

In Rutter v. Brookland Valley Estate Pty Ltd [2009] FCA 702, the applicant flautist won a copyright infringement case against a Western Australian winery. The Judge held that the respondent had infringed the applicant’s copyright by continuing to use part of the applicant’s composition on wine labels for at least seven years after the copyright licence she had entered into with the respondent had expired. The Court ordered the respondent to pay the applicant A$208,684 in compensatory damages, plus interest. The respondent was also ordered to pay A$150,000 in additional damages, the Court finding that the respondent’s conduct was flagrant and continued in disregard of the applicant’s rights even after they were brought to the respondent’s attention. Wine bottles that had been produced and sold outside of the six year limitation period were excluded from the assessment of the relief to which the applicant was entitled.

Proper assessment at the earliest stage of jurisdiction, forum, evidence and timing issues will go a long way towards formulating an effective and efficient enforcement strategy.