Whiskey, websites, bottles and blocks - 12 months in trade mark and copyright law
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ME_126560977_4 (W2007) Whiskey, websites, bottles and blocks – 12 months in trade mark and copyright law  Contacts Wayne McMaster Robert Cooper Lynne Lewis John Fairbairn Kylie Diwell Paul Kallenbach Shyama Jayaswal  December 2015  MinterEllison | (c) MinterEllison 2015 Page 2 ME_126560977_4 (W2007) Whiskey, websites, bottles and blocks – 12 months in trade mark and copyright law Trending in trade marks...2015 After a big year in trade marks in Australia in 2014, including a High Court decision (Cantarella Bros, regarding 'ORO' and 'CINQUE STELLE'), 2015 was a quieter year, with only a couple of decisions of the Full Federal Court raising the stakes above the usual trial judgments in the Federal Court. Nevertheless some significant trade mark issues were addressed by the Courts and the Trade Mark Office, which we discuss below. 1. Mellow yellow A colour trade mark is not considered to be inherently adapted to distinguish the goods or services to which the mark is applied from those of other traders. In November, the Full Federal Court confirmed that Telstra's "YELLOW" word mark is not able to be registered, because it too lacked inherent capacity to distinguish. The evidence before the Court showed that it was common for overseas directories to be printed on yellow paper and/or referred to as "Yellow pages". Yellow was considered to be the "standard colour for business directories" and other traders in Australia had used yellow in relation to business directories prior to Telstra applying for the word trade mark. While Telstra had sold directories under the name "YELLOW PAGES" for many years, the Full Federal Court found that there was no use of the word "yellow" alone as a trade mark prior to the lodgement date of the "YELLOW" mark. Telstra had argued that the trial judge erred in considering use of the word and colour internationally. The Full Federal Court rejected this argument and upheld the trial judge's decision that it was proper to consider overseas use as relevant to the consideration of whether traders in Australia would want to use yellow without improper motive. The Full Court considered that the evidence of overseas use, together with use in Australia, showed that it was likely that consumers recognised directories by reference to that colour. Therefore, the mark lacked any inherent distinctiveness. As Telstra could not show use of the word alone prior to the lodgement date, they were unable to rely on use of the mark post-filing. Therefore, as the word yellow lacked any capacity to distinguish print or online directories, and had not acquired distinctiveness as at the lodgement date, registration of Telstra's "YELLOW" mark was refused. 2. Gettin' all outta shape about it Since 1995, when it became possible to trade mark a 3D shape in Australia, companies have sought protection for a number of distinctive shapes, including the triangular shape of a Toblerone, the outline of a Freddo frog and the monkeys of a "Barrel of Monkeys" game. Coca-Cola holds a number of shape trade marks, including for its "Contour" bottle. However, it discovered this year that the protection afforded by its shape registrations did not stretch far enough to stop arch-rival Pepsi. In taking action against Pepsi in relation to its "Carolina" bottle, Coca-Cola argued that the Pepsi bottle infringed its shape trade mark due to the Carolina bottle's "low waisted contoured shape". Coca-Cola argued that this shape was the most significant element of the Carolina design, and that therefore the waist or silhouette of the bottle was being used as a trade mark. This argument was rejected by Justice Besanko, who held that the trade mark being used by Pepsi was the overall shape of the Carolina bottle. MinterEllison | (c) MinterEllison 2015 Page 3 ME_126560977_4 (W2007) Coca-Cola also argued that, for the purposes of assessing deceptive similarity, the low waisted shape of its Contour bottle was the essential or dominant feature of the Coca-Cola trade mark. Justice Besanko disagreed that this feature was more prominent that any other feature of the Contour bottle, including the fluting and belt band, and therefore found that the Carolina bottle was not deceptively similar to Coke's trade mark. The Court's decision highlights the fact that distinctiveness is assessed not by what the trade mark owner considers to be distinctive but by what a consumer would think. 3. Don't you know who I am? Gaining a strong following in a valuable brand is no mean feat. The reputation of a brand translates to the strength of the business as a whole. The reputation of a pre-existing famous mark is often critical to successfully opposing a trade mark application, if it can be established that, because of that reputation, use of the applied for mark would likely cause deception or confusion in the relevant market. However, three 2015 decisions illustrate that reputation, by itself, is not enough to prevent other traders registering a similar mark. In Delfi Chocolate Manufacturing SA v Mars Australia Pty Ltd (October, 2015), the strong reputation of the "Maltesers" brand actually worked against an opposition by brand owner Mars, as the court found that Maltesers was so well known that it was unlikely chocolate-loving consumers would confuse a competing product named "Maltitos" with Maltesers products. Two other recent decisions relating to Hearst Communications Inc (publishers of women's magazine Cosmopolitan) also confirmed that establishing a reputation is only half the battle. In oppositions against trade mark applications for "Cosmopolitan" in relation to car paint, by Toyota and in relation to cutlery, by H.A.G. Imports (makers of Maxwell & Williams), the Trade Mark Office held that there were distinct differences between the products to which the mark was being applied (magazines vs. car paint/cutlery) and that therefore the reputation in relation to magazines had not extended to those products. Also in light of how well known each company was in its respective industry, the Trade Mark Office found that the likelihood of confusion between the trade marks was low. Thus the oppositions failed on this point. The opposition against Toyota ultimately succeeded because Hearst was able to establish that Toyota's application for "Cosmopolitan" was made in bad faith due to a pre-existing relationship between Toyota and Cosmopolitan magazine. 4. Birds of a feather not flying together Under Australian trade mark law, marks are vulnerable to removal for non-use if they have not been used for 3 years. Use by an "authorised user" qualifies as use by the trade mark owner. The question of whether a licensee is an authorised user therefore often arises in situations where a trade mark owner has licensed the use of their mark. In a recent case between Skyy Spirits LLC (makers of "Wild Turkey" bourbon) and Lodestar Anstalt (makers of "Wild Geese" Irish Whiskey), Justice Perram was required to consider the degree of control required to be considered an "authorised user". The question arose because an Australian company called "Wild Geese Wines" had sold its trade mark for "Wild Geese" to the makers of Wild Turkey bourbon, but had taken a perpetual exclusive licence to use the mark. Under the agreement, Skyy Spirits had the right to taste wines produced by Wild Geese Wines to ensure they were of appropriate quality, and could revoke the licence if the wines did not meet an acceptable standard. The Trade Marks Act provides non-exclusive examples of what constitutes authorised use, one of which is where the trade mark owner exercises quality control over the goods and services. In this case, Justice Perram concluded that the quality control required under the licence agreement was "entirely theoretical and had no footing in reality". However, while he considered that an earlier Full Federal Court decision in Yau's Entertainment Pty Ltd v Asia Television Ltd, in which authorised use was given a very broad interpretation, was "wrongly decided", he was bound by that decision to find that the possibility of quality control was sufficient to establish that there had been "authorised use" of WILD GEESE by Wild Turkey. Unsurprisingly considering the strength of Justice Perram's comments regarding the Full Court's decision in Yau's v Asia Television, Lodestar Anstalt appealed to the Full Federal Court. The MinterEllison | (c) MinterEllison 2015 Page 4 ME_126560977_4 (W2007) hearing, before an expanded five judge bench given Lodestar's argument may result in the earlier Full Court judgment being overturned, was heard in November this year. It will be interesting to see if the Full Federal Court will maintain the broader test in Yau's v Asia Television, or agree with the reasoning set out by Justice Perram in this case (notwithstanding he ultimately concluded there had been authorised use of the mark). Authors: Rebecca Dutkowski and Jonathan Kelp Trending in copyright...2015 Developments in technology and its use by both business and consumers have continued to challenge copyright law this year. Most notably, we have seen Dallas Buyers Club LLC's attempts to obtain details of individual copyright infringers through their ISPs which, in turn, has led to the development of a 'three strikes' copyright infringement notice scheme by Communications Alliance and the introduction of website blocking legislation. There have also been a number of other interesting cases which test the boundaries of copyright law, and its ability to protect rights holders. 1. Dallas Buyer's snub In 2015 there was a new development in the ongoing battle against online copyright infringement. Dallas Buyers Club LLC (DBC), the rights holder of the film of the same name took action against various internet service providers (ISPs) to obtain contact details of the ISPs' customers. In April 2015, DBC was granted a preliminary discovery order under rule 7.22 of the Federal Court Rules, which allows a potential litigant to discover the identity of potential respondents, which would compel the ISPs to disclose the identities of account holders identified as potential infringers. However, this order was stayed pending approval of the letter of demand that DBC would send to account holders (see Dallas Buyers Club LLC v iiNet Limited). The dispute then focused on the terms of the DBC's proposed letter of demand. Ultimately, it was rejected by the court, and the stay maintained due to the damages demanded by DBS (see Dallas Buyers Club LLC v iiNet Limited (No 4)). Justice Perram's views as to the following claimed heads of damage give an indication as to what a copyright owner may legitimately claim in proceedings against individuals who download a film from unauthorised sources: (a) an amount equal to the cost of purchasing a copy of the film – a plausible demand; (b) an amount equal to the licence fee lost to DBC by each uploading activity over peer-to-peer networks – an impermissible demand, his Honour stating that an infringer negotiating a licence fee with DBS to avoid infringement to be 'so surreal as to not be taken seriously'; (c) additional damages under s 115(4) of the Copyright Act, based on how many other films had been downloaded by each infringer - an impermissible demand as this section did not permit recourse to other acts of infringement of other people's copyright; and (d) damages for the costs incurred by DBC in obtaining the infringer's name – a plausible demand. Accordingly, the Court indicated that the stay will only be lifted if DBC gave an undertaking to only use discovered information to pursue damages under categories (a) and (d). 2. Three strikes… you're out In response to increasing pressure from the Federal Government and rights holders, including through the well publicised Dallas Buyers Club proceedings, the Communications Alliance has lodged a draft industry code with ACMA which establishes a 'three strikes' copyright notice scheme. The code, which is intended to be voluntary, will not take effect until it has been registered by ACMA. MinterEllison | (c) MinterEllison 2015 Page 5 ME_126560977_4 (W2007) Under the scheme, rights holders will be entitled to serve infringement notices on ISPs in relation to alleged copyright infringement by a user using a particular IP address. If the ISP can match the IP address to an account holder the ISP must then send the user a notice. The code implements a three strikes approach – the first infringement notice during a rolling 12 month period will result in an 'education notice', the second in a 'warning notice' and the third in a 'final notice'. Rights holders may request an anonymised list of all final notices issued by an ISP and use the list as a basis for a preliminary discovery application. The relevant ISP must provide reasonable assistance in relation to a preliminary discovery application and comply with any discovery orders made by the Court. However, will the scheme satisfy rights holders? Rights holders may be left frustrated by the scheme which is limited to residential, fixed line accounts and allows for a maximum of 200,000 infringement notices to be processed across all participating ISPs during the first 18 months of the scheme. Rights holders are also required to indemnify ISPs before any infringement notices are processed. The scheme also stops short of requiring ISPs to terminate or suspend user accounts or disclose the identity of users without a discovery order. From the ISP's perspective, there is also the outstanding issue regarding the costs of administering the scheme. The code anticipates that the costs will be shared between participating ISPs and rights holders. However, no funding agreement has yet been reached. 3. New weapons against piracy On Friday 26 June 2015, the Copyright Amendment (Online Infringement) Act 2015 (Website Blocking Act) commenced, providing rights holders with another tool in their arsenal against internet pirates and illegal downloaders. The Website Blocking Act inserted a new section 115A into the Copyright Act 1968 (Cth) which provides that where an overseas online location's 'primary purpose' is to engage in copyright infringement, a rights holder can apply to the Federal Court to obtain an injunction requiring the ISP to block access to that online location. The specifics of the 'primary purpose' test remain somewhat unclear and we await the Federal Court's view should it be given the opportunity to hear a case on this matter. Under the new section 115A, the Federal Court retains the discretion as to whether to grant an injunction. Section 115A(5) sets out a number of factors that the Court may take into account, including:  whether disabling access to the online location is a proportionate response in the circumstances;  whether it is in the public interest to disable access to the online location; and  any other remedies available under the Act. In relation to the Federal Court's task of determining whether blocking a website is a 'proportionate response', they are unlikely to adopt the European approach, which is based on a balancing act between the right to free speech and the rights of copyright holders (since Australia lacks any charter or bill of rights protecting the right of freedom of speech). However, an Information Sheet issued by the Australian Copyright Council in relation to section 115A suggests that the court may consider whether '[a] website might have a substantial or significant non-infringing purpose...or the website may not have many Australian visitors'. Although this provision has recently been cited in a letter of demand (where a residential builder, Simonds Homes, has demanded that a small (as yet unnamed) ISP block access to a website hosted in India), it remains to be seen how large rights holders plan to utilise the new section 115A in a more 'traditional' internet piracy context. 4. Blurring the lines of copyright protection The distinction between an expression in material form that is eligible for copyright protection, and an idea that is not protected, can be a grey area. This year saw the courts continuing to consider this issue, as parties push to expand the boundaries of copyright protection. This can occur particularly where copyright law is used in non-traditional areas where there would otherwise be limited protection from unfair competition. In Seven Network v Endemol (August MinterEllison | (c) MinterEllison 2015 Page 6 ME_126560977_4 (W2007) 2015), the Federal Court was asked by the Seven Network to grant an injunction restraining the Nine Network from continuing to broadcast The Hotplate, a reality TV cooking show, on the basis that it infringed Seven's copyright in My Kitchen Rules (MKR), its competing program. Seven argued that The Hotplate reproduced key elements of MKR's format pitch, presentation, production bible, interview overview and shooting guide (each of which amounted to a literary work) and dramatic works comprised by 'the combination and series of incidents (including situations, events and scenes), plot, images and sounds' in various episodes of MKR. The court declined to grant the injunction on the basis that the balance of convenience was in favour of Nine, but did find that there was a reasonably arguable (although not strong) case of copyright infringement. If the matter proceeds to a full hearing, Seven is likely to face difficulty in precisely explaining what copyright works are argued to have been reproduced and what elements have been copied that amount to reproduction of a substantial part of those works. In the US this year, a jury awarded the estate of Marvin Gaye a total of US$7.3 million (subsequently reduced to $5.3 million) for infringement of the copyright in Gaye's 'Got to Give It Up' by the Robin Thicke, TI and Pharrell Williams' song 'Blurred Lines'. The Gaye estate's arguments focused on the similar 'feel' of the two works. The composers admitted that 'Blurred Lines' was intended to 'evoke an era' and that they had wanted to capture the 'feel' of a Marvin Gaye song in writing and recording 'Blurred Lines'. Although the plaintiffs were able to point to a series of elements of 'Blurred Lines' that had allegedly been copied, some of these appeared to be closer to ideas (for example, 'unusual percussion sounds, including cowbell') rather than protectable expressions of ideas. Given that it was a jury trial, it is difficult to know what elements were and were not relied on in reaching the decision. The outcome raised a great deal of dismay about what the decision means for creativity and inspiration in the music industry. It has recently been appealed by the defendants. These cases, if they proceed, will continue to raise interesting questions about how far copyright can extend to protecting key elements of works, without straying into protecting mere ideas. 5. Best laid plans… In Tamawood Limited v Habitare Developments Pty Ltd, the Full Court considered the elements involved in determining whether there has been a reproduction of a copyright work, for the purpose of copyright infringement. The Court looked at the interaction between the two elements of 'sufficient degree of objective similarity' and 'causal connection' and emphasized that these elements should not be approached as independent questions, as the answer to one can impact the other. Tamawood brought an action against Habitare and its directors for copyright infringement in respect of its design plans. In assessing the approach that should be taken in determining a question of reproduction of a copyright work, the primary judge had found that the first question to be asked is whether there is a sufficient degree of objective similarity between the two plans. Only if the answer is yes, is there then a consideration of whether there is a causal connection between the plans. Whilst this issue ultimately split the Court, the three Federal Court judges agreed that the primary judge had erred in her approach to this test of infringement. The majority, Jagot and Murphy JJ, found at 167 that the 'the finding of causal connection between the copyright work and the alleged infringing work cannot be divorced from the assessment of objective similarity'. Jagot and Murphy JJ found that the plans disclosed sufficient objective similarity on the basis that one of Tamawood's plans were embedded in the Habitare plans. Their Honours concluded that there had been a reproduction of a substantial part one of Tamawood's plans without the license of Tamawood and on that basis, the 'Mondo' plans had infringed Tamawood's copyright. Whilst Greenwood J disagreed, finding an insufficient degree of objective similarity between the Tamawood and Mondo plans, his Honour did agree that the two elements are discrete, yet overlapping. Authors: John Fairbairn, Kylie Diwell, Paul Kallenbach, Nicole Reid, Margaret Gigliotti, Emily Hawcroft, Ashleigh Fehrenbach, James Patto MinterEllison | (c) MinterEllison 2015 Page 7 ME_126560977_4 (W2007) Our Intellectual Property specialists MinterEllison | Commercial-in-Confidence Page 8 ME_126560977_4 (W2007)