White SW Computer Law Intellectual Property, Information Technology & Telecommunications Newsletter - April 1999

This Act is now in operation in Australia. The purpose of the Act is to “encourage the voluntary disclosure and exchange of information about year 2000 computer problems and remediation efforts”. Prior to the Act commencing, when a vendor made a Year 2000 related statement that was inaccurate, the vendor may have been liable for damages for misrepresentation, misleading and deceptive conduct and negligence. Provided that a Year 2000 statement complies with the Act in that it:

• Relates solely to Year 2000 processing in regard to detection, prevention and remediation;
• Includes words to the effect that the statement is a Year 2000 disclosure statement for the purposes of the Act;
• Includes words to the effect that a person may be protected by the Act from liability for the statement in certain circumstances;
• Was made after 26 February 1999 and before 1 July 2001;
• Identifies the person who authorised the statement; and
• Is made in writing or in a data storage device and is capable of being reproduced in writing or is made by way of electronic communication of writing.

the vendor may not be liable for civil actions including negligent misstatement, misleading and deceptive conduct, misrepresentation and defamation in relation to any matter arising out of or incidental to the making of a Year 2000 disclosure statement. The Act does not provided protection when: a Y2K statement is made with the knowledge that it is false or misleading or recklessly as to whether the statement is false or misleading; a Y2K statement is made pre-contractually; the Y2K statement is made under a contractual or statutory obligation; or when a Y2K statement was made to induce consumers to acquire goods or services.

Software and hardware vendors should check that their existing Y2K disclaimers and replies to Y2K surveys comply with the Act, particularly in relation to stating that the statement is made for the purposes of the Act.

In litigation involving alleged trade mark infringements, it is a common tactic for the trade mark owner to apply to the Court for an Anton Piller Order. If such an order is granted, the applicant is able to attend at the premises where they suspect the infringing articles are located and remove them so that the evidence of the infringement is not destroyed. In the matter of Computer Interchange Pty Ltd and Anor v Microsoft Corporation Pty Limited, the Federal Court was asked by Computer Interchange to restrict Microsoft from taking active steps to publicise the results of an Anton Piller “raid” on its premises due to the likely damage that would be done to the compan's reputation. Despite the arguments raised by Computer Interchange that it had co-operated with the Court and Microsoft and that they were unaware that any products or programs which they had purchased or were selling infringed any of Microsoft's rights, the Court refused to restrict Microsoft from publicising the results of the raid. If an Anton Piller “raid” results in infringing material being seized, it is likely that the action will be publicised as a warning to other suppliers and retailers that such action may be taken if they are suspected of dealing with or selling infringing products.

We recommend that you contact your legal advisor immediately if such a raid occurs at your premises before allowing any party to enter.

The use of surnames as part of a company or business name is fairly common. In cases where the surname is not commonly used in Australia, it may be possible to register a trade mark that includes a surname. In some instances, businesses that were originally family owned may be divided into separate operating entities operated by new owners. If the surname used in the name of the original business is then used in the company or business names of the new entities then who has the right to register a trade mark including the surname? This question was examined by the Federal Court, on appeal of an earlier decision in the matter of Nettlefold Advertising Pty Ltd v Nettlefold Signs Pty Ltd. In this matter both Nettlefold Advertising and Nettlefold Signs were companies that evolved from businesses established by the Nettlefold family, but were no longer under their control. The Court found that unless the use of a trade mark was likely to deceive or cause confusion at the time a trade mark was registered, the trade mark should not be expunged at a later date when changed circumstances led to the trade mark being likely to deceive or cause confusion.

Parties that commence using a company or business name or a trade mark in a class of goods or services related to those for a registered trade mark owned by another party risk being sued for trade mark infringement.

The English High Court ruled in the matter of Laurence Godfrey v Demon Internet Limited that an Internet service provider may be held liable for defamation if they allow the publication of material which they know to be defamatory. In this matter an obscene positing, defamatory to Laurence and purporting to have been sent by Lawrence [sic] Godfrey was sent to a newsgroup and published by Demon Internet. Laurence sent a fax to Demon Internet stating that the email had not been sent by him and requesting that it be removed. Despite being able to remove the posting at any time, Demon Internet chose to leave the posting visible to Internet users until the automatic deletion date approximately a fortnight after the message was posted. Australian ISPs should be wary of this decision. The Judge made the point of distinguishing the law in England from that in the US, where the First Amendment has led to a divergence between US and English defamation law. It is likely that Australian Courts will consider the judgment of an English Court to be more binding than that of an American Court, due to the similarity of Australian and English defamation laws.

If an ISP is notified that a posting is defamatory, it would be prudent for the ISP to take prompt action to remove the allegedly defamatory posting from access by Internet users.

When litigation is commenced to recover an outstanding debt, the defendant will commonly argue that the debt had not been paid due to a deficiency in the goods or services provided. In the matter of Redflex & Anor v American Traffic Systems Inc & Anor, Redflex sought payment from ATS for the supply of software and other equipment for a traffic camera system being supplied by ATS to a Canadian province. ATS alleged that the software supplied by Redflex was not of merchantable quality and did not meet the requirements of the subcontract. The Court found that ATS ought to supply details of the alleged deficiencies to Redflex, well before trial so that Reflex has a proper understanding of what is being alleged. The Courts' aim is to facilitate the settlement of disputes without the need for trial wherever possible. In order for parties to negotiate a settlement, it is necessary that they fully understand the allegations being made against them.

A party that maintains a claim or a defence to a claim that cannot be substantiated risks having the Court order that they pay costs to the other parties involved if their action needlessly extends the litigation.