LAWS1100 Business Law

Teaching Week 8

Intellectual Property
 Intellectual Property (IP)

1. Copyright
2. Trademarks
3. Patents
4. Designs
5. Breach of confidence
What is Intellectual Property?
Intellectual property (IP) is a
form of intangible (unable to be
touched) creation such as the
expression of an idea or a trade
mark. It is a product of
intellectual effort rather than a
physical manufacturing process.

Intellectual property law grants a

business the right to prevent
others from copying or exploiting
its IP without permission.
 Why is IP important to Business?
IP is important in business, as they are
intangible assets that can be financially
exploited.

When a business is establishing its

presence in the marketplace,
protecting and managing its IP is
critical as it can mean the difference
between success or failure.

That is why it is important for businesses to understand the

different forms of IP because some involve a formal application
and examination process before a right can be registered, while
others do not.
Commercialising IP

IP is a valuable commercial
asset. The value can be
immense:

• George Lucas’ Star Wars –

$41 billion – 2015

• JK Rowling’s Harry Potter
– $25 billion – 2016
• Microsoft trademark –
$42.8 billion – 2011
 IP – Rights of Owner
• The owner of IP has the exclusive right to exploit the
IP for a profit.

• The owner can either sell the IP or retain ownership.

• This includes the right to license the IP: in return for

a fee the owner of the IP permits others to exercise
their exclusive rights in relation to the IP. Eg.)
Merchandise.
Types of IP protection

Figure 9.1
 Multiple Categories of IP Rights
1. Name/Logo - protected by trade mark law.
2. Inventions/processes/method - protected by patent law.
3. Information - protected as a commercial secret. Ie) Not
wanting competition knowing certain information.
4. Appearance/packaging - protected by design law.
5. Writing/graphics/music - protected by copyright law.

• Expiration date: when intellectual property rights have

expired – the IP is said to have entered the public domain –
the IP in question can be copied or exploited by others
without penalty.
 INFORMATION ON LABEL
protected by copyright law

NAME AND LOGO

protected by trademark law

MANUFACTURING PROCESS
protected by patent law

RECIPE
protected by commercial secret

OVERALL APPEARANCE
protected by design law?
 Rationale for protection
Why do we need IP Law?

• Economic justifications: Innovators are given protection by IP

law and granted financially valuable legal rights because doing
so motivates others to be innovative, and this is ultimately of
economic benefit to the community.

• Moral justifications: Innovators are given protection by IP law

because they are morally deserving in their own right as a
consequence of their efforts, regardless of the value of their
efforts to the community.
Copyright – What is Copyright?
• Copyright is the legal right to prevent
unauthorised copying of the expression of
an idea, e.g. a book, a song, a movie, or a
photograph.

• The law of copyright does not protect the

idea itself, it only protects the expression
of that idea (the way it is expressed).

• Ownership of copyright is a separate issue

from ownership of the physical item – Eg.)
someone may own a DVD movie or a
textbook, but they do not necessarily own
the copyright in the material on the DVD,
in the movie or in that textbook.
 Copyright – What is Copyright?
• Copyright in Australia is regulated by the
Copyright Act 1968 (Cth) (“CA”).

• Copyright protection is automatic (there is no

registration required).
 INFORMATION ON LABEL
protected by copyright law
 3 Requirements for Protection

1. The creation is a ‘work’ or ‘subject matter other

than works’;

2. The creation is original;

3. The creation is expressed in a material form.

(To answer a Copyright qn, now go to: Slide 25)

 Protection – Requirement 1
Requirement 1: The creation is a ‘work’ or ‘subject matter other
than works’ – s32 Copyright Act – extends protection to ‘works’:

COPYRIGHT ACT 1968 – SECT 32

Original works in which copyright subsists            
(1)  Subject to this Act, copyright subsists in an original literary, dramatic, musical or
artistic work that is unpublished and of which the author:
(a)  was a qualified person at the time when the work was made; or
(b)  if the making of the work extended over a period--was a qualified person
for a substantial part of that period.
(2)  Subject to this Act, where an original literary, dramatic, musical or artistic work
has been published:
(a)  copyright subsists in the work; or
(b)  if copyright in the work subsisted immediately before its first publication--
copyright continues to subsist in the work;
 Protection – Requirement 1
• Literary works – the expression of an idea in the form of text.
Eg.) a book, an article, an email, written information, an
advertisement, a manual, song lyrics.
See: Mirror v Queensland (1982)
Note: Single words, titles, headlines, banners and business
slogans are often too short/unoriginal to be protected as literary
works by themselves.
See: Fairfax v Reed (2010)
- Held: newspaper headlines are not literary works.
• Musical works – the musical arrangement of note and sound
combinations.
• Dramatic works – such as a show, dance routine, film script.
 Protection – Requirement 1
• Artistic works – such as paintings, photographs,
pictures, graphic designs, building or plans for a
building, works of artistic craftsmanship.

NOTE:

• Needing skill and appealing to aesthetic taste.

See: Clarendon v Henley (1999)
 Protection – Requirement 1
• The CA also extends protection to ‘subject matter
other than works’ (origin in ‘works’ under s32).

– S89 Sound recordings – the recordings of

songs/music separately from lyrics (literary work)
and musical arrangement (musical works)
– S90 Recordings of films;
– S91 Recordings of television and sound
broadcasts. See: Network Ten v TCN (2004);
– S92 Published editions.
 Protection – Requirement 1
• A creation may not just fall into one category of works or
subject matter other then works – each different
component or element of a creation might have different
copyright protection – for example:
1. A song is a combination of literary works (music),
musical works (musical arrangement) and sound
recordings;
2. A website is a combination of literary works (text
written on the website including logos/slogans),
artistic works (pictures and graphic design of the
website), films (any videos or animated graphics on
the website) and sound recordings (any background
music on the website or accompanying any film).
 Protection – Requirement 2
Requirement 2: The creation is original (S32 CA)

• This does not mean that the creation must be different

to other creations, only that it must be the result of the
person’s own skill and effort rather than the result of
copying from another source.
• Compilations are protected provided they are original –
a minimal degree of creativity is required.
See: Desktop Marketing v Telstra (2002)
• The requirement of originality only applies to works, not
subject matter other then works (usually adaptations).
 Protection – Requirement 3
Requirement 3: Creation is expressed in material form
• Facts, information, methods and systems: not protected
by copyright unless they are expressed in material form.
See: John Fairfax v Consolidated (1960)
• It is not the originator of an idea who owns the
copyright but the person who first expresses the idea in
material form – someone may have a brilliant idea which
is original, but if they tell the idea to a second person
who produces a work based on that idea, copyright
belongs to the second person. The originator of the idea
has no rights in the finished work.
See: Donoghue v Allied (1938)
 Extent of Protection
S31 CA: The copyright owner has exclusive rights to:

1. Reproduce the work in a material form;

2. Publish the work;
3. Perform the work in public;
4. Communicate the work to the public;
5. Make an adaptation of the work.
 Time Limitations for Protection
• See: S33 (Copyright Act)
 Literary, dramatic, musical
or artistic work: 70 years
after the creator’s death or
first publication.
 Film or sound recording: 70
years after first publication.
 Television or sound
broadcast: 50 years after
first publication.
• Note: Corporations who own
 Published edition: 25 years copyrights, sometimes lobby
after first publication for an extension of these time
limitations – Eg.) Disney
 Extent of Protection (Academia)
• The person who creates the original work
will usually be the owner of the copyright
in the original work.
• Where an original work is created by
someone ‘in pursuance of the terms of
his or her employment by another
person’, then the employer (the other
person) is the copyright owner.
• Exception: Independent contractors
usually own copyright in their creation.
• It is common practice for creators to
assign copyright to publishers and
employers.
 3 Requirements for Infringement
Copyright is infringed when a person exercises the
copyright owner’s exclusive rights in relation to the
creation without their permission to do so.
Eg.) they copy the creation without permission.

Copyright will be infringed if:

1. A substantial part of the creation is copied;
2. There is objective similarity between the
original and the copy;
3. There is a causal connection between the
original and the copy.
 Infringement – Requirement 1
Requirement 1: A substantial part of the creation is copied

• There is no fixed rule about the precise portion that is copied.

• There is no exact mathematical percentage (%).
• The quality of the part copied will be considered – ask
yourself whether it was an essential/distinctive element?

- If the part copied was comprised of insignificant

material – then it may not be an infringement.
- But if the part copied was comprised of significant
material – it may be an infringement.
 Infringement – Requirement 1
Case Law Examples:

See: Hawke v Paramount [1934]

• The infringer only copied a few bars of a popular song.
• Held: It was an infringement.
• Rationale: The bars were a significant part of the song and therefore
very recognisable.

See: EMI v Larrikin (2011)

• Fed Court decided that Australian band “Men at Work” had
plagiarised part of their famous 1980s hit song “Done Under”.
• Two bars of “Kookaburra Sits in the Old Gum Tree” flute riff https
://www.youtube.com/watch?v=2Mfve0oxbPA
 Infringement – Requirement 2
Requirement 2: There is objective similarity between the
original and the copy

• If the copy is an exact copy of the original – the copy will

be objectively similar. However, this is very rare.

• Often the copy will not be exactly the same.

• The question then is whether a reasonable person

would view the copy as similar to the original?
 Infringement – Requirement 2
See: Zeccola v Universal Studios (1982)

FACTS:
• Universal owns copyright for the book, script and film of Jaws.
• An Italian film was produced called Great White (I’UltimoSqualo).
HELD:
• Not an exact copy of Jaws but any reasonable person would
detect that the Italian film is similar to Jaws: Great White Shark
attacks and eats people and is destroyed by the hero.

Look for the objective similarity yourself:

1. Jaws – https://www.youtube.com/watch?v=2I91DJZKRxs
2. I’UltimoSqualo – https://www.youtube.com/watch?v=6Eo7Om2AfuE
 Infringement – Requirement 3
Requirement 3: There is a causal connection between the original
and the copy

• Establishing a causal connection is relatively straight forward.

• It must be shown that the alleged copy of the original creation is
in fact copied and not created independently.
• To show this causal connection – it must be shown that the maker
of the copy had access to the creation.

IMPORTANT: What does “had access” mean?

• Case law has demonstrated that the judicial interpretation of “had
access” is that the person infringing had the opportunity/ability to
be able to access the original.
 Infringement – Requirement 3
• Intention does not matter – It does not matter if the copying
was deliberate, accidental, conscious or subconscious.

See: Bright Tunes v Harrissongs Music (1976)

- George Harrison substantially copied a part of ‘He’s So Fine’ and
admitted that he would have heard the song before in 1962.
- However, he argued that such copying was accidental.
- Held: Even though Harrison subconsciously copied parts of the
song, his access to the original amounted to a causal
connection.
Listen to them yourself –
– https://www.youtube.com/watch?v=rinz9Avvq6A
– https://www.youtube.com/watch?v=0kNGnIKUdMI
 Infringement – Remedies and Defences

• A person accused of infringing copyright may seek to rely upon a

range of possible defences, including:

– Insubstantial infringement – Eg.) insignificant copying;

– Fair dealing – for a legitimate purpose and not for competing
with the owner or depriving them of their rightful entitlements
– such as for criticism or review; reporting the news; judicial
proceedings or professional advice; research or study:
See CA ss40-43 and ss103A-104.

• Remedies for infringement include: damages, an injunction and

account of profits made from the infringement.
 What is a Trade Mark?
• A trade mark is a distinctive word, a phrase, or a symbol used
in commercial dealings to show a connection between a
particular business and its product. See: s17 (TMA).
• A trade mark can be letters or a word; name; device; aspect of
packaging; shape; colour; sound or scent.
See: Coca-Cola v All-Fect (1999)
- Coca-Cola registered as a trade mark the
shape of the contoured glass bottle in which
Coke was traditionally sold.
- Coca-Cola successfully stopped All-Fect, a confectionary
company, from importing/selling lollies in a plastic bottle the
same shape as the contoured glass Coke bottle.
See: BP v Woolworths (2004)
Types of Trade Marks

34
 Trademarks
• In Australia, trade marks are regulated by the
Trade Marks Act 1995 (Cth).
• Trade Marks must be registered to gain
protection under the Act.
• VERY IMPORTANT TO REGISTER.
 NAME AND LOGO
protected by trademark law
 Requirements for TM protection
A trade mark will only be registered if it:

• Does not contain a proscribed sign. Eg.) National emblems;

• Is able to be represented graphically – ie.) a word, logo,

description of a shape and sounds as written music;

• Is distinctive – capable of distinguishing from others.

See: Beecham v Colgate-Palmolive (2002) – cannot be
everyday / common terms such as ‘Olympic’ or specific
geographical indications such as ‘champagne’ or ‘cognac’ and /
or terms that represent product quality.
 Requirements for TM protection
A trade mark will only be registered if it:

• Is not scandalous or contrary to law – such as swear words

or offensive terms – but this depends on one’s view.

• Is not likely to deceive or cause confusion – is the

trademark similar to the trademark of another business,
whether registered or not?

And…
 Requirements for TM protection
• Cannot be substantially identical with or deceptively similar to
another pending or registered trade mark.

• Question: does the proposed trademark nearly resemble another

registered or lodged trademark and is it likely to mislead or cause
confusion? See: Torpedoes v Thorpedo (2003)

KEY SECTION… TMA (s44) Identical etc. trade marks

            
(1)  … an application for the registration of a trade mark in respect of goods must
be rejected if:
(a) the applicant's trade mark is substantially identical with, or
deceptively similar to:
(i) a trade mark registered by another person in respect of similar
goods or closely related services; or
(ii) a trade mark whose registration in respect of similar goods or
closely related services is being sought by another person; and
 Extent of TM protection
• A trade mark owner only has the right to restrain others
from using the registered trade mark in relation to the class
of products for which the trade mark has been specifically
registered – various classes of goods and services –
ttps://www.ipaustralia.gov.au/trade-marks/applying-for-a-t
rade-mark/classes-goods-and-services

• The exception to this is if the trade mark is ‘well known in

Australia’ in which case the trade mark owner would be
able to prevent someone from using the TM in relation to
unrelated goods or services.
See: Eastman v John Griffiths (1898)
See: Virgin Enterprises v Klapsas (2001)

• As long as they keep using the TM and continue paying the

periodic renewal fees every 10 years, the trade mark owner
can renew registration of their TM indefinitely.
 Trade Mark Infringement
A registered TM is infringed if:
• The Trademark owners TM is registered under the TM Act;
• The def uses a TM substantially identical with or deceptively
similar to the trade mark owners TM;
• The def uses the TM in relation to goods or services that are the
same or closely related to goods or services in respect of which the
Trade Mark owners TM is registered.
See: Arnotts, Krispy Kreme and the Iced Vo-Vo trademark
• The other business may avoid liability if the TM is their own name,
or place of business, describes the kind, quality, quantity, intended
purpose etc or some other characteristic of their products, was
used in comparative advertising, was used with the TM owner’s
implied consent, or has been used since a time before the TM
owner registered or started using the TM – ‘well known in Aust’.
See: Eastman v John Griffiths (1898)
See: Virgin Enterprises v Klapsas (2001)
 Registration Process
1. Search the TM database at the IP Australia website to see if the same
or a similar TM has been registered.
2. Use the ‘TM Headstart’ service accessible online at the IP Australia
website to check the likelihood of success.
3. Application must be in relation to a particular class/classes of products.
There is no limit on number of classes in which a TM can be registered.
4. The application is examined by IP Australia.
5. If it meets the requirements for registration it will be accepted.
6. If accepted for registration, the application is advertised in the Official
Journal of Trade Marks. Anyone who opposes the registration of the
TM will have 3 months to register their opposition. The applicant will
have to defend their application.
7. If no opposition is filed, or if the opposition is unsuccessful, the TM will
be registered.
 The Tort of Passing Off
• A Def commits the tort of passing off if they misrepresent
themselves or their product as having some kind of connection
with Plaintiff. Eg.) Copying a TM of another:
In an action for ‘passing off’ the Plaintiff must show:
1. They make a misrepresentation that
their goods or services are connected
with another person or have the other
person’s endorsement or approval;
2. The misrepresentation is made in
the course of a trade;
3. The misrepresentation is intended
to deceive potential purchasers.
 Remedies
• Under the Trade Marks Act the remedies available for
infringement of a registered TM include:
– an injunction to prevent further infringement;
and
– either damages or an account of profits.

• If a TM is unregistered, the owner may still be able to

prevent another from misusing it by bringing a claim:
– in the tort of passing off; or
– under ACL s18 – misleading & deceptive
conduct.
Patents – What is a Patent?
A patent is a form of legal
protection granting the
creator of a new
technology the exclusive
right to use and exploit
that new technology for a
limited period. It is
intended to encourage
invention and innovation
by rewarding the creator
with a potentially valuable
limited monopoly.
 Patents – What is a Patent?
• Patent protection is not automatic; the patent must
be registered with the Patents Office of IP Australia.
• Australian patents are regulated by the Patents Act
1990 (Cth).

Two types of patent:

1. Standard: 20-25 year protection – thoroughly
examined by the PO – and must satisfy the standard
of inventiveness;
2. Innovation: 8 year protection – less thorough
formalities check – innovative is less strict then the
standard of inventiveness because it only has to be a
minor advance of existing technology.
MANUFACTURING PROCESS
protected by patent law
 Patent Protection
A new technology can only be patented if it is:
• A manner of manufacture: It must be a product that is
created, or a composition or a process. It has to be invented –
not an abstract idea or something that occurs naturally.
See: NV Phillips v Mirabella (1995)
See: Grant v Commissioner of Patents (2006)
• Novel: It has to be novel – new – different from anything seen
or known before – when compared with the prior art base,
whether as prior registered patents or as known or used as
part of prior public knowledge.
A patent cannot be patented if it has already been published
or publically used.
See: Windsurfing v Petit (1983)
 Patent Protection
• Innovative (Innovation Patents) or Inventive (Standard Patents)
:

1. Innovative – a non-trivial difference between the new

technology and what is publically known about it and
comparing it with information in other patent specifications.
2. Inventive – something that is not obvious for a person skilled in
the technical field to which the patent relates; and

• Useful: It must have a specific, substantial, credible and

practical use and a potential for commercial return – not just
achievable in theory or for pure academic interest.
 Extent of protection
• A standard patent grants protection for 20 years from the
date of the patent.
• An innovation patent grants protection for 8 years.
• A patent owner has the exclusive right to exploit the new
technology. They can also assign or license the patent to
someone else in return for royalty payments.
• In return for being granted a monopoly over the use of the
new technology for the duration of the patent, the patent
owner must share their knowledge by providing a full
description of how the new technology works; this
information becomes public and can provide the basis for
further research by others.
 Infringement
• A patent owner’s rights are infringed if the
new technology protected by the patent is
copied, used or exploited without consent.

• A court may refuse to award damages or an

account of profits if it is shown that at the
time of the infringement the Def was not
aware that the new technology was protected
by a patent.
 Designs – What is a design?
• S5 Designs Act 2003 (Cth) – The
design is the overall appearance of
the product resulting from one or
more visual features.
• Design protection only protects the
appearance of the product, not the
way it works.
• The Designs Act 2003 (Cth) protects
the design of a product from
unauthorised copying or
exploitation.
• The design must be registered with
IP Australia.
OVERALL APPEARANCE • A design will not be registered
protected by design law?
unless it is New and Distinctive.
 Designs – What is a design?

• A design will not be registered unless it is:

– New: A design will be new, unless it is identical to a

design that forms part of the prior art base – being
that which is publically available at the time of
registration, including designs publically used in Aust;
And
– Distinctive: A design will be distinctive, unless it is
substantially similar in overall impression to a design
that forms part of the prior art base.
Think about overall appearance and overall impression -
protected by design law? 54
Think about overall appearance and overall impression -
protected by design law? 55
Think about overall appearance and overall impression -
protected by design law? 56
 Design – Extent of Protection
• The design owner has the exclusive right:
– To make a product that embodies the design;
– To import such a product into Australia for sale, or for use
for the purposes of any trade or business;
– To sell, hire or otherwise dispose of such a product;
– To use such a product in any way for the purposes of any
trade or business; and
– To authorise another person to do any of these things.

• Design registration initially protects the design for 5 years; the

design owner can renew the registration for a further 5 years,
after which the design automatically enters public domain.
 Design – Infringement

• Another business will infringe the design owner’s

rights if, without the design owner’s consent, they
make, import, sell, hire, offer for sale or offer for hire
a product that embodies a design that is identical to
or substantially similar in ‘overall impression’ to the
registered design.
Confidential Information – Breach of Confidence
Confidential Information: Information disclosed
by one person to another on a confidential basis
(also known as ‘trade secret’). It is often of a
vitally important nature to a business:
• Production formulae or methods.
• Business accounts.
• Future business strategies
• Methods of sales.
• Recipes, customer information, techniques,
engineering drawings, manuals.

Breach of Confidence: A tort that is committed

when one person uses or discloses information,
that was disclosed to them on a confidential
basis, without the consent of the owner of the
information.
 Breach of Confidence
For breach of TORT: the following requirements must be satisfied:
1. The information is of a confidential nature; trivial information
and public knowledge are not protected.
2. The information was given in circumstances where the
obligation of confidence was explicitly made known and
accepted, or was implied from the context: such as an
employer/employee relationship.
See: NP Generations v Feneley (2001);
3. There has been an unauthorised use or threatened use of the
information.
Note: Confidential information does not need to be expressed in
a material form. See: Fraser v Thames (1984) – a verbal
communication amounted to confidential information.
 Breach of confidence
• In circumstances where confidential information is to
be disclosed to another, it is wise to prepare and
execute a confidentiality agreement to remove all
uncertainty and ensure that all parties are aware of
their obligation of confidence.
• In addition, employment contracts could also
contain restraint of trade clauses that prevents the
use of employer information within certain
geographic or professional areas.
• However, it cannot be so unreasonable that the
obligation of confidentiality goes on forever so that it
prevents someone from earning a livelihood.
Coming up next week ...

Australian
Consumer
Law (1)

(ACL)