InIP: What's happening in intellectual property - February 2023

6 min read

Welcome to InIP – your regular wrap-up of some of the world's leading and intriguing Intellectual Property stories from here and abroad, and what they mean for your business.

How broad is your informal licence? It might go without saying

By Tommy Chen and Tahlia Rodrigues

The High Court has ruled on the extent to which the scope of an informal licence can be implied.

This dispute concerned Mr Hardingham, the creator of photographs and floor plans, and the real estate agents who commissioned those works and subsequently put them on third party websites, such as realestate.com.au. We reported in June 2022 that the High Court granted special leave to hear the appeal.

In Realestate.com.au Pty Ltd v Hardingham [2022] HCA 39, all five High Court judges agreed that the informal (unwritten) licence granted by Mr Hardingham was not limited to the specific marketing campaign for the property. The agents were permitted to agree to the terms and conditions of realestate.com.au (and other sites) that the photos could be used indefinitely. One influential point was the well-known fact that most agencies in Australia conducted marketing using these websites.

The judges' reasoning differed slightly. Chief Justice Kiefel and Justice Gageler emphasised that the terms of an agreement that have not been articulated are ascertained by asking what reasonable people, with knowledge of the background circumstances known to both parties, would take by their words and conduct to have been agreed. Justice Gordon took a similar approach, expressly rejecting the traditional approach of 'inferring' a term only where the parties are found (as a matter of fact) to have directed their minds to the question, with any other terms only to be implied if they pass the test in BP Refinery v Shire of Hastings (1977) 180 CLR 266. Rather, the terms of the contract are to be determined by reference to what reasonable observers would make of what passed between the parties. Once that task is complete, the test in BP Refinery becomes relevant, but only in relation to terms that are not expressed, but necessary to make the contract work.

By contrast, Justices Edelman and Steward held that there was no such thing as an 'inferred term': contractual terms were either express or implied, and the same rules (including the test in BP Refinery) applied to formal and informal contracts. Their Honours found no limitation in the express terms of the licence, and there was an implied term that the agencies would have a licence to use the works according to the standard terms and conditions of the websites.

Freelancers and those who commission their work – listen up. If you have an informal agreement, check whether the terms are clear, and consider documenting the most important ones in a formal contract. With any potentially controversial terms, reflect on whether your conduct would objectively be seen as assenting to those terms.

Protection for First Nations artists and creators in newly proposed cultural heritage legislation

By Olivia Henderson 

On 9 February, the Federal Government committed $13.4 million to developing new standalone laws to protect First Nations knowledge and cultural expression, as part of a new policy approach to the arts sector.

First Nations knowledge and cultural expression (also referred to as Indigenous Cultural and Intellectual Property) concerns a broad range of Aboriginal and Torres Strait Islander heritage. First Nations knowledge can refer to practices, skills, innovations and processes, which can be scientific, agricultural or technical. First Nations cultural expressions include art, design, dance, language, stories and architecture.

The prospective legislation aims to prevent economic benefit from being diverted away from First Nations creators and communities, and to prevent cultural harm to Aboriginal and Torres Strait Islander people caused by the misuse and misappropriation of traditional knowledge and cultural expressions. The proposed laws are particularly concerned with reducing the harm caused by art, merchandise and souvenirs that falsely give the impression of being created by an Aboriginal or Torres Strait Islander person – which is estimated to be up to 80% of Indigenous-style consumer products in the Australia market.

Organisations likely to be affected include retailers dealing in Indigenous-style products, companies using Indigenous-style designs in reports and documents (including Reconciliation Action Plans), and organisations that maintain collections of Aboriginal and/or Torres Strait Islander cultural heritage. In advance of the new legislation, organisations may wish to:

• audit supply chains of Indigenous-style products to ensure these items are created by First Nations people who are property compensated;
• ensure that Indigenous-style designs used in reports, documents and online are designed by First Nations artists who are property compensated; and
• develop policies and protocols, in consultation with Traditional Owners, for the ongoing management of any First Nations cultural heritage that is dealt with by the organisation.

Delayed start in Europe: Unitary Patent and Unified Patent Court

By Candace Wu and Tommy Chen

The start of the Unitary Patent system and Unified Patent Court (the UPC) in Europe has been delayed until 1 June 2023.

The Unitary Patent is a new type of European Patent that has unitary effect across all 17 participating European Union member states.* The UPC will provide a single system for litigation of both Unitary Patents and traditional European Patents in those 17 countries. Companies that hold patents in Europe or conduct business there should prepare for this significant change.

Unitary Patents, like traditional European Patents, will be examined by the European Patent Office (the EPO), but will take effect as a 'unitary' right across the 17 countries, rather than as a bundle of national rights. The UPC will be responsible for considering the validity and infringements of Unitary Patents (as well as traditional European Patents in force in those countries). This means both Unitary Patents and affected existing European Patents are exposed to the possibility of central revocation at the UPC. On the other hand, the UPC may reduce the need for parallel national court infringement and validity cases, thus lessening the costs and complexity of litigation.

As we previously reported, the UPC was originally expected to open its doors in October 2022. After several delays, this date has most recently been pushed to 1 June 2023. When the UPC comes into force, all European Patents with effect in the 17 participating states will automatically fall under its jurisdiction unless the patent proprietor 'opts out'. For pending applications before the EPO, it is also possible to opt out from the UPC within one month of the publication of grant. There is a 'sunrise period' from 1 March to 31 May 2023, and a transitional period of seven years (which may be extended) to file an opt-out request once the UPC starts. Importantly, if an action commences at the UPC before an opt-out request is filed, the patent is locked into the UPC. It is therefore preferable to make a decision about opting out early, well before the end of the sunrise period. 

Owners of existing European Patents or pending applications should review their patent portfolio, and decide whether to stay in or opt out from the UPC. We encourage you to visit the Linklaters UPC Hub for more information, and to contact the Allens IP team if you have questions or would like to discuss any issues.

* The 17 current participating EU member states are: Austria, Belgium, Bulgaria, Denmark, Estonia, Finland, France, Germany, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Portugal, Slovenia and Sweden. Spain, Poland and Croatia are not participating, and non-EU members including the UK, Switzerland, Norway and Turkey will not be affected.

IP infringers? Gotta catch 'em all!

By Stefan Ladd

The Pokémon Company International, Inc. has successfully obtained interlocutory orders in the Federal Court of Australia, restraining an unauthorised third party from launching 'Pokémon' NFTs and a multi-metauniverse blockchain online game 'PokeWorld'.

The Pokémon Company International, Inc. undertakes brand management, licensing and marketing relating to Pokémon computer and video games on behalf of its Japanese parent, The Pokémon Company. For those who experienced a different childhood from that of the author, Pokémon games are a series of popular (and excellent) video and trading card games based on the titular fictional animated characters.

In late 2022, The Pokémon Company International brought proceedings seeking interlocutory relief against an unrelated third party in Australia, Pokemon Pty Ltd, and its director. The allegations included that the respondents had, without licence or authorisation, proposed to launch Pokémon themed NFTs, as well as a related online game.

The Court granted the relief sought, finding that The Pokémon Company International had a strong prima facie case of contravention by the respondents of the Australian Consumer Law on the basis of misleading or deceptive conduct, and the balance of convenience favoured granting interlocutory relief.

Roadshow Films takes down another cyberlocker

By Alexandra Moloney

Despite the rise in popularity of on-demand streaming services in Australia, the illegal copying and distribution of films and television shows remain prevalent through websites known as cyberlockers. Cyberlockers are created deliberately to infringe copyright on a wide scale, by promoting the uploading and sharing of copyright material anonymously without the copyright owner's permission.

Recently, Roadshow Films and several other well-known film producers and distributors (such as Disney, Paramount Pictures and Universal Studios) successfully obtained site blocking orders under section 115A of the Copyright Act 1968 (Cth) against cyberlocker Mixdrop. None of the 48 respondents to the proceeding opposed the orders sought by Roadshow Films or sought to be heard in relation to the relief claimed.

This decision is a timely reminder of how s115A can be used effectively to block access to the domain names, URLs and IP addresses of cyberlockers located outside Australia.

That must sting: NZ Manuka abandons trade mark applications in the EU and UK for Manuka Honey

By Rob Vienet

Recent developments in the global dispute regarding Manuka Honey have highlighted the challenges that a business is likely to encounter if it adopts a trade mark (eg Manuka Honey) that inherently describes the trademarked product (eg honey).

On 9 December 2019, we reported on the global dispute between Manuka Honey Appellation Society Incorporated (NZ Manuka) and the Australian Manuka Honey Association (Australian Manuka). The dispute concerns NZ Manuka's bid to secure certification trade mark protection for 'Manuka Honey' in respect of honey in various jurisdictions – including Australia, New Zealand, the US, the EU and the UK.

Recently, NZ Manuka has abandoned its trade mark applications in the EU and UK (following adverse findings by the relevant IP offices in those jurisdictions). The parties now wait for the New Zealand Intellectual Property Office to deliver its decision regarding the opposition proceeding that it heard in October 2021.

Ultimately, these developments provide a timely caution to all businesses: trade mark applications for inherently descriptive signs are rarely successful and frequently challenged.

Liability of online marketplaces for trade mark infringement: CJEU gives guidance in Louboutin v Amazon 

By Sarah Muller and Jess McKenna

Europe's highest Court has indicated that online marketplace operators may be liable for trade mark infringement for goods offered for sale by third-party sellers.

Belgian and Luxembourg Courts requested guidance from the Court of Justice of the European Union (CJEU) about the approach to Article 9(2) of the EU Trade Mark Regulation 2017/1001, in the context where Amazon both sells goods under its own brand and functions as an online marketplace on which third-party sellers may sell goods to consumers. The request concerned claims by renowned designer, Christian Louboutin, about sales of shoes on the Amazon marketplace bearing its trade marked red sole.

In its December 2022 decision, the CJEU suggested that an online marketplace operator may impermissibly 'use' a trade mark in a third-party seller's listing if a well-informed and reasonably observant user would perceive a link between the mark and the services provided by the marketplace operator, in that the user forms the impression that the operator is marketing the goods bearing the mark. The CJEU considered the visual display of the goods alongside the operator's branding, and the nature and scope of the platform operator's services as key factors in determining the question of liability.

The cases have been remitted to the national courts to determine whether Amazon 'uses' the mark and is liable for trade mark infringement. The CJEU's decision may provide guidance to Australian courts when it comes to grappling with this issue in the future.