Australian Real Estate Client Guide
What you need to know about IP
HERBERT SMITH FREEHILLS
WHAT YOU NEED TO KNOW ABOUT IP
If you're buying, or selling, are you buying / selling the trade mark, and transferring business names and domain names / socials?
If you're buying or selling, are you buying / selling the plans, website and apps / property management software?
If you're redeveloping an existing property, have you followed the `6 week' moral rights regime?
If there's an artwork or sculpture on the property, do you have an agreement about maintenance?
Introduction
In this guide, we consider common intellectual property issues that may arise when acquiring, constructing, redeveloping or disposing of real estate properties. These largely relate to trade marks and copyright rights (and associated moral rights).
Property names trade mark considerations
If your property or project has a distinctive name or logo, it may function as a trade mark.
A trade mark is any word, logo, symbol or get-up that is capable of distinguishing one trader's goods or services from another's. A trade mark needs to be distinctive, and not descriptive of the goods or services.
In Australia, trade marks may be registered or unregistered. Registrations of trade marks last for ten years, and can be renewed indefinitely, although registrations can be removed in some situations where the trade mark is no longer being used. Registrations are in relation to goods or services that the applicant specifies, give rights in relation to all of Australia and won't issue if the trade mark is too close to a trade mark that's already registered (or applied for) for similar goods or services.
Examples of possible trade marks include:
the name of the building eg a hotel, apartment complex or shopping centre;
a stylised version of a name, or logo incorporating it;
a logo that is used in relation to the building eg an apple, or a bird's nest; or
a combination of any of these.
Disposal of a trade mark has stamp duty and tax consequences. While a property may be located in a specific state or territory, trade mark registrations issue in relation to all of Australia, such that disposal may trigger duty implications in more than one state or territory. Certain state and territories also consider duty implications to arise in connection with transfer of business names and domain names.
If a trade mark application or registration is assigned, then the change of ownership should be recorded on the trade mark register maintained by IP Australia, so that the new owner of the trade mark application or registration receives notices in relation to the trade mark going forward.
If a trade mark is not the subject of an application or registration, then it is not possible to `assign' it other than as part of the sale of the business (and goodwill) in which it is used in this context, the business of managing and operating the property.
Trade mark considerations
Is the name of the property distinctive?
Developer / seller: think about applying to register a trade mark for protection of the name
Buyer: if you want to use that name, check if the owner has applied to register or register the name as a trade mark, and if not, think about whether it is appropriate to ask that an application be filed pre completion.
AUSTRALIAN REAL ESTATE CLIENT GUIDE WHAT YOU NEED TO KNOW ABOUT IP
Is the name of the property forming part of a sale?
Developer / seller think about whether the name is being used on other properties, or includes a `house brand', such that you might want to keep the trade mark. If you do, then think about if it's commercially appropriate to grant the buyer a transitional licence to use the trade mark, while the property is rebranded, and new websites and socials are established (together with an obligation to cease use at the end of the licence).
Buyer if you want the property to continue to use its existing name, then you need to acquire the trade mark rights from the seller. That means you need to establish who owns them, including any copyright in logos. You should think about stamp duty and tax consequences as part of the overall sale. If the trade mark is unregistered, you should make sure that you are acquiring the business, or the main assets used to carry on the business, and the goodwill of that business, making explicit reference to any trade mark (or domain name, business name or social media account) that is important to you.
Business names
In Australia, you must register any name that you trade under that is not your own on the ASIC business name register, under the Business Names Registration Act 2011 (Cth), and trading under an unregistered business name is an offence. Registration of a business name does not protect that name as a trade mark.
A business name registration may be rejected if it is identical (or nearly identical) to an existing business name, and there are words that are not permitted to be included in a business name registration for public policy reasons.
Developer / owner If a property is being managed / operated under a name that is not that of the operator / owner / manager, you may need to obtain a business name registration.
Buyer if you want to continue to manage / operate the property under the same business name, you should negotiate for a transfer of the business name as part of the purchase. This needs to happen online through the ASIC portal, with the co-operation of the seller.
Domain names and socials
While domain names, email addresses and social media accounts aren't forms of intellectual property rights in Australia, they're often important commercially in relation to websites operated for promotion and management of the properties, or for consumers (eg a shopping mall guide).
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Domain names are registered by commercial operators known as `registrars', and there are different rules for different types of domains. Domain names are typically registered for between one to five years (depending on the relevant commercial offering of the registrar).
To hold a domain name registered in the .au domain, the person seeking to register must have an Australian presence (which can be met by being an Australian incorporated entity, or holding an Australian trade mark application or registration (which exactly matches the desired domain name)), and meet eligibility and allocation criteria that apply to the relevant sub-domain.
Sometimes, domain names may be registered by an entity that is not the owner of the property for instance, by the responsible employee, or a third party IT service provider. Because domain names can be registered privately (such that registrant details are not publicly available), it is not always possible to independently verify that a particular domain name is held by a particular registrant.
Domain names are transferred online and transfer should be done with the co-operation of the IT team of both seller and buyer.
Developer / owner consider which domain names are held and used only in relation to a specific property, including for use in connection with email addresses. If a domain is used in relation to more than one property, it may not be commercially feasible to transfer it as part of a sale of one property. You may need to enter into a transitional arrangement where emails or website visitors are redirected to a buyer's email or website, while the buyer establishes its own online presence.
Buyer ask the seller for a list of all domain names used in relation to a property, and evidence of ownership or control of the relevant domain name used in relation to a property. In addition to appropriate contractual obligations to transfer domain names and warranties, you should also ensure that you acquire appropriate account passwords, if you are taking over existing accounts.
Copyright and moral rights overview
Copyright subsists in original creative works and subject matter including building plans, architectural drawings, building models, website software, promotional text (eg advertising copy), films, photographs, music and sound recordings, graphic designs, murals, sculptures and paintings.
Copyright includes the right to copy and adapt a work or communicate it online (including on a website). It protects the expression of an idea, rather than the idea itself. For instance, copyright gives its owner the
What you need to know about IP
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What you need to know about IP
right to stop others from copying a work (eg stopping others from copying a specific layout or blueprint of a three bedroom house with an interior courtyard), but does not prevent others from independently creating their own work (their own three bedroom house with an interior courtyard with a different layout, starting from scratch).
The first owner of copyright is typically the creator of the work or subject matter, but copyright in an employee's work created in the course of their employment will typically belong to their employer. Copyright can be assigned or licensed (a permission from the owner to the licensee to use the copyright for a specific purpose), but assignment has to be in writing. It is prudent for licences to be in writing, so the property owner can be certain as to whether they have the right to assign the licence to a new owner. Copyright generally lasts for the life of the author, plus seventy years.
In Australia, an individual creator has moral rights in relation to their work or subject matter including:
the right to be named as author of the work, unless it is reasonable in the circumstances not to do so;
the right not to have authorship of the work falsely attributed to someone else; and
the right not to have the work subjected to derogatory treatment (including by destruction, distortion or alteration) that is prejudicial to the creator's honour or reputation.
Moral rights cannot be assigned, but a creator can consent to not being attributed, or acts to the work that would otherwise be derogatory treatment. While employees can give broad consents, consents from non-employees may not be effective unless they are specific with regard to the work concerned, and the relevant acts. It is always prudent to record consents in writing.
Property promotion and management
Commercial property is often promoted through websites, social media accounts, and more prosaically in leaflets or brochures. Commercial property may also be managed through websites and apps. Copyright may subsist in all of these.
When working with an external graphic designer or software developer, unless there is an express written assignment of copyright in the developed material (eg the brochure, the website, the app), the copyright is retained by the contractor.
Developer / owner in any contract with an external creator of copyright work, deal expressly with whether:
the copyright is retained by the contractor and used under licence by the property developer / owner; or
copyright is assigned by the contractor to the property developer / owner,
to be clear on what rights may be sold together with the property. Relying on an implied licence (ie a right to use the copyright on the basis one that arises because it is so obvious that it goes without saying) is dangerous, as there is no clear Australian case law that an implied licence can be transferred. A recent case in Australia involving a dispute as to whether an implied term existed in relation to reproduction of copyright work went all the way to the High Court.
If you use property management software (including apps or websites) to manage multiple properties, it may be appropriate to licence a buyer of one of the properties to use that software, rather than selling the software to them outright. Alternatively, you could offer to redirect any web traffic from your website to the buyer in relation to the property sold. If you do sell the property management software along with the property, carefully document any ongoing licence and support terms.
Buyer if promotional website, marketing materials, apps, or management software are important, ensure that you negotiate an assignment of copyright in those materials as part of the sale (if owned by the developer /owner, and supported with appropriate warranties, including as to moral rights consents), or a licence of relevant materials.
Property plans
It is not unusual for architects and engineers to retain copyright in architectural drawings and blueprints, and to allow use under a licence, rather than assigning copyright to a property developer / owner.
A licence may be needed to perform acts in relation to property plans including copying the plans, constructing a property according to the plan, altering the plan, copying part of the plan, or copying the model or property constructed according to the plan.
While a licence may be implied in some situations (for instance, if the plans were created for use in a development application, it may be reasonable to imply a licence allowing construction if the development consent is granted), you should not assume the scope of the licence (for instance, whether a particular alteration is within an implied licence). Such an implied licence may not be transferable in all situations.
AUSTRALIAN REAL ESTATE CLIENT GUIDE WHAT YOU NEED TO KNOW ABOUT IP
In addition, the individual creator architects or engineers also have moral rights in relation to plans, even if an assignment or licence has been granted. Using plans without attribution, or altering plans, may infringe an architect's moral rights in those plans. Consents to do things that would infringe moral rights are only effective if given by the individual creators, not by the architectural or engineering firms who employ them.
Property developer / owner ensure that architects and engineers are engaged in writing, on terms that include an express assignment or licence of copyright in the plans (and architectural and technical drawings), together with moral right consents, on terms that are clear as to whether transfer is permitted, and whether the licence can be terminated.
Buyer seek an assignment or transfer of licence in relation to architectural and technical plans for the property, and ensure that if there are moral rights consents, they are provided to you, or warranties given that they exist. It can be difficult and time consuming to track individual architects down and obtain consent long after a project has been completed.
Changes to the property
Where a building is going to be changed, an architect or other creator of the copyright in the building may consider that the changes infringe on their moral rights not to have the work subjected to derogatory treatment, or to have the work attributed to them. The Australian Copyright Act sets up three paths forward for building owners:
1 Argue that the changes are reasonable in the circumstances (and therefore not derogatory) such that consent is not required.
2 Obtain a consent from the individual to the proposed changes. This would involve contacting the architect to negotiate the consent (or if no contact details are held, the architectural firm and seeking that they do so with the relevant individual). The individual may at that stage seek additional compensation in relation to considering the changes and giving the consent.
3 Following the `6 week' rule, which if followed, means that the change will not infringe the author's moral rights of integrity in relation to the building or their architectural plans. This involves giving notice (with certain prescribed details) to the individuals who are the creators and hold moral rights in relation to the building, notifying them that the building will be changed (and a brief description of the change), and that the author may within 3 weeks seek access to make a record of the work, and consult with the building owner.
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If the individuals seek access to the building for the purposes of making a record of the building and/or consulting in good faith with the building owner, the building owner must give the individuals a reasonable opportunity to have such access within a further 3 week period. If the individuals ask to have any attribution to them removed from the building, the building owner must comply.
While there is an exception where the author cannot be contacted, this only applies after `reasonable inquiries' have been made, and there is no certainty as to what lengths constitute `reasonable inquiries'.
Developers / owners ensure that you keep good records of moral rights consents that you hold, including contact details for relevant architectural firms.
Buyers when you acquire properties, ask for copies of all moral rights consents held, and contact details for relevant architectural firms involved in designing the relevant buildings.
Property artwork
It is not unusual for councils in major cities to encourage developers to include public art (or the commissioning of public art) in connection with issuing development consents. A developer / owner may need to enter into a commissioning agreement with a relevant artist (or their representative). A developer / owner may rather choose to enter into an agreement with an art curator / consultant who is involved in creation of the public art strategy and narrative for the development, and facilitates the artist selection and artwork development process, as well as managing (and sometimes contracting) directly with the selected artists.
This process will include considering timelines, and budgets and responsibility for delivery and risk in a similar manner to any project contractor agreement. There are several other issues to be considered:
1 The artist will usually want to retain copyright in the artwork, which means that the artist can control whether the work is copied, or altered, but also means the artist can provide copies to other developments. The developer / owner should consider if a licence to the developer / owner would be desirable to produce promotional material for the property and if the artist should be required to agree that they will not reproduce the artwork for other developments.
2 The artist will usually want the developer / owner to commit to maintaining the artwork. If their artwork is damaged, or allowed to become degraded, artists may consider that their moral right of integrity is infringed. If developers / owners enter into maintenance agreements, they should consider how emergencies will be
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What you need to know about IP
handled, where building safety is at risk, and how to manage the commitment into the future, including a right to novate the agreements to subsequent owners.
3 Because the artwork is being created for a specific site, the developer / owner should also consider issues around removal, destruction, movement within the site, or installation of other works within the site. The Australian Copyright Act provides that an author's right of integrity is not infringed in relation to the destruction of a moveable artistic work, if the person who destroys the work gave the artist or its representative a reasonable opportunity to remove the art. A similar `6 week' rule applies to artistic works affixed to or forming part of the building as for the building itself.
Developers / owners ensure that you keep good records of moral rights consents that you hold in relation to public art in the property, including copies of commissioning and maintenance agreements.
Buyers when you acquire properties, ask for copies of all moral rights consents and commissioning and maintenance agreements held for public art in the property.
Smart building digital twins
As technology moves on, so too has construction and building management. New buildings are not only designed using software but are constructed using interconnected digital assets that share data and update systems with little human involvement. In addition, it is not uncommon for developers, or project managers, to have constructed virtual digital models of projects, not only for use to examine different configurations in the development phase, but also to manage use of the project, once it has been completed and launched.
To do this, Building Information Modelling (BIM) software is needed (typically licensed from a vendor), together with access to dynamic information about the project supplied by sensors in and around the project. This could include traffic information supplied live from road monitors, inputs from lift monitoring software, energy use data, data in relation to security gate access or data supplied from Internet Of Things (IoT) devices used throughout the building. Some proprietary equipment is supplied on terms that do not give owners rights to access data the equipment generates.
Developers / owners if you want to operate a digital twin to manage a building or project, ensure that you have the appropriate licence rights in relation to BIM software to construct, or have constructed, your model, and the rights to access and use live data from IOT devices and connected equipment and systems as part of that model.
Ideally, ensure the licences, and rights to access, keep and use data, are transferable to future managers and owners.
Buyers when you acquire properties, seek to take a transfer of all licences to BIMs, and data lakes held or used by property managers or owners in relation to those properties.
ICIP and buildings
Australia has a rich heritage of over 60,000 years of First Nations culture.
Some aspects of First Nations cultural heritage are protected by intellectual property of the kind discussed earlier in this guide.
Other aspects are referred to in the United Nations Declaration on the Rights of Indigenous Peoples, which requires nation states to recognise and protect Indigenous peoples' rights to maintain, control, protect and develop their cultural heritage, traditional knowledge and traditional cultural expressions, including their intellectual property over such aspects. These kinds of rights are referred to as indigenous cultural and intellectual property or ICIP.
ICIP is commonly understood to include rights to:
protect traditional designs and knowledge, including designs and knowledge that have cultural meaning that is sacred, or only intended to be known or used by particular groups of peoples;
ensure that traditional designs and knowledge is used for the benefit of people who have responsibilities in relation to that heritage;
be compensated and attributed for use of traditional designs and knowledge;
stop use of traditional designs and knowledge, where the use is not appropriate, or offensive, or misleading; and
control how recordings of cultural heritage are used.
Australian Courts have been prepared to consider an approach of recognising beneficial ownership by a community in relation to a traditional design, and the individual artist to be under a fiduciary obligation or trust relationship with the community, to use the design appropriately, and for the benefit of the community.
Consulting with First Nations peoples about development
Developers should seek to identify whether there are any areas of cultural heritage on site, as part of assessing any site for development, whether greenfields, or brownfields. Indeed, this is often
AUSTRALIAN REAL ESTATE CLIENT GUIDE WHAT YOU NEED TO KNOW ABOUT IP
required when tendering for development as part of a publicly funded project.
Identifying cultural heritage sites is important not only for consideration of native title and compensation obligations, but also in relation to identifying and managing any areas, including protected areas, of cultural heritage, or putting in place land use agreements. Breaches of State heritage legislation is an offence, which can carry significant financial penalties and in some cases, criminal liability.
It is important that any engagement or consultation with First Nations land councils, traditional owners and native title representative groups:
1 commences in the early stages of a project;
2 is done with the appropriate people who are authorised to speak for the relevant country;
3 is done with appropriate compensation for the time and services involved;
4 is done with respect; and
5 does not seek to inappropriately prevent First Nations people from speaking about their cultural heritage and heritage sites of significance, or to bind them to exclusively working with any one developer.
Engaging with First Nations designers
ICIP needs to be considered in relation to copyright works and subject matter created by First Nations people, or which incorporate elements of cultural heritage, in addition to intellectual property issues as outlined earlier in this guide.
If commissioning a work or subject matter from an Indigenous artist or creator or seeking to incorporate First Nations designs into a project, developers should be guided by protocols developed and refined over the years by leading First Nations lawyer Terri Janke for using ICIP in the arts. These include protocols in relation to respect, self-determination, communication, consultation and consent, cultural integrity and respect for sacred and secret material, attribution, benefit sharing, new consents for new uses and recognition and protection, and as at 2023 can be found here.
When seeking to engage First Nations artists or incorporate First Nations art and designs into projects, developers should be mindful of the following principles:
First Nations people should always be the primary guardians of First Nations cultural heritage if a developer wants to include First Nations cultural heritage as part of a development, the developer should seek to engage persons who have the right First Nations connection to country to work with that cultural heritage (for example, engaging a
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Noongar person to create art on Wiradjuri land may not be appropriate).
Engaging a person who is not of a First Nations background to create art that looks like it has cultural heritage significance or has been created by a First Nations person (eg dot paintings, stylised boomerangs) may not infringe any individual's copyright, but is disrespectful, and could be viewed as misleading and deceptive. Care should be exercised when art designed by First Nations peoples is used without permission or compensation or on an item which has not been manufactured or produced by First Nations peoples. Australian Courts have held that representing an item as "made" by First Nations people or as "Authentic Aboriginal Art", when it was only designed by First Nations people and manufactured overseas is misleading and deceptive.
First Nations cultural heritage should be used respectfully. For instance, it may be disrespectful to incorporate particular kinds of designs into carpets, or for designs with gendered significance to be used generally in a development, or to create merchandise for general sale which incorporate designs with ICIP significance without the right kinds of consents from the First Nations persons who are responsible for and custodians for those designs. Australian Courts have also found that using designs of First Nations artists on carpets were copyright infringements, with punitive damages awarded for cultural harm.
Consult with First Nations artists before moving or relocating art that they created with ICIP elements. Moving or relocating the art may mean that a new use is being made of the ICIP, depending on any change in the context of display, and you should confirm that new use is culturally appropriate. This is in addition to considering any moral rights issues discussed earlier in this guide.
Engaging with First Nations artists should preferably be on terms which leave ownership of ICIP with First Nations people, and only grant developers the rights actually needed for the development, if any.
First Nations artists and art should be attributed in a culturally appropriate way. For instance, if an artwork incorporates a story from a particular language group, it may be important to attribute the language group, as well as the individual artist. If an artwork has been created using materials contributed by a number of people or different language groups, the artist may need to credit those other persons as collaborators.
Developers should also be mindful of respecting the right of First Nations people to govern the collection,
What you need to know about IP
What you need to know about IP
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ownership and application of data about First Nations communities, lands, people and art. Developers should consider whether to engage First Nations people to assist to create First Nations data sovereignty policies for their organisation. IP Australia has developed for key themes in relation to First Nations data sovereignty:
Control: First Nations people want control of who uses First Nations knowledge.
Protection: First Nations people are seeking measures that can be used to stop unauthorised use of First Nations knowledge and impose sanctions against misappropriation.
Recognition -- First Nations people want to be recognised as the owners of their First Nations knowledge.
Respect -- First Nations people want their ownership of First Nations knowledge and the cultural protocols associated with it to be respected.
More information on the work being done on First Nations knowledge by IP Australia can be found here.
HERBERT SMITH FREEHILLS
