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

In a matter heard by the Supreme Court of Victoria, Asymetrix Asia Pacific Pty Ltd v Electronic Resources Australia (Vic) Pty Ltd, Asymetrix sought payment from Electronic Resources for the licence to duplicate and distribute a software product. The agreement between Asymetrix and Electronic Resources involved, amongst other things, oral discussions and a written purchase order to the value of $1,200,000.00. Asymetrix supplied the master CD-Roms to Electronic Resources for duplication, but no payment was made by Electronic Resources. Electronic Resources claimed that the purchase order was merely a forecast of purchases and not in fact a request for Asymetrix to supply goods or services. The Court found that in consideration of the conduct of the parties and the other evidence presented by both parties, that Electronic Resources had intended to create legal relations and that the purchase order was an agreement to purchase the software licence from Asymetrix. This matter was heard by the Court over the course of nine days, which would have been of great expense to both parties. Had Asymetrix requested that Electronic Resources sign a written agreement, the matter may never have proceeded to trial.

Any matter that relies heavily on oral evidence will be difficult to prove and is heavily reliant on the availability of witnesses and how they present themselves in Court.

On appeal to the Supreme Court of Victoria, in the matter of Gatt and Anor v Norlin (Trading as Norlin Dental) the question was raised as to whether the “joint development” of a software products was in fact a joint venture. Dr Norlin, a dentist had approached Dr Gatt regarding the development of a software program to be used in dental practices. Dr Norlin provided input regarding what he thought the program should be able to do and Dr Gatt was responsible for developing a software program that would perform such tasks. A dispute arose between the parties and the project was not completed. The original trial judge found that Dr Gatt's company was liable to pay Dr Norlin damages for the failure to deliver a completed software program. On appeal it was argued, amongst other things, that the relationship between Dr Norlin and Dr Gatt's company should be considered to be one of a joint venture, in which all parties would be jointly liable for any losses incurred. It was held that the relationship was not one of a joint venture and that Dr Gatt's company was liable to pay substantial damages to Dr Norlin for breach of contract. If a joint venture was established, no damages would have been payable as a contract would not have existed.

It is important to remember that even minor contracts can result in substantial damages for breach.

The Copyright Amendment (Digital Agenda) Bill 1999 will, if enacted, introduce copyright reforms in Australia with the central aim being to ensure that copyright law continues to promote creative endeavour whilst allowing reasonable access to copyright material on the Internet and through new communications technology. The object of the Act considers issues such as:

• The need for financial rewards and certainty of legal rights and obligations for creators and investors to promote the creation of copyright material and the exploitation of online technology;
• The need for copyright ownership enforcement;
• The need to encourage online availability of copyright material and the need for certainty of end users as to their rights and obligations when using these materials;
• The need to ensure that cultural and educational institutions can access and promote access to copyright materials online on reasonable terms
• The need to consider global technical standards

There are currently many questions left unanswered by the current legislation such as whether making a cached copy of a web page constitutes a copyright infringement; which laws apply to copyright infringement when the owner and infringer provide and access copyright materials in different countries; and whether framing web sites in another web site constitutes copyright infringement. Hopefully, this act will effectively address such issues.

The US Court of Appeals matter of Data Concepts, Inc v Digital Consulting, Inc reconsidered Data's use of the domain name “dci.com” and the unregistered trade mark “DCI” and whether its use was an infringement of Digital's registered trade mark “DCI”. The Court considered the following issues:

• The strength of Digital's trade mark
• The similarity between Data and Digital's goods or services
• The similarity of Data and Digital's trade marks
• Evidence of actual confusion
• The marketing channels used
• The likely degree of purchaser care
• Data's intent in selecting the trade mark; and
• The likelihood of expansion of Data's product lines.

The Court reversed the decision of the District Court to grant a motion for summary judgment based upon the opinion that Data's use of the domain name was likely to cause confusion and found that the matter should be tried to determine the likelihood of confusion. The Court found, amongst other things, that the District Court did not properly assess the significance of evidence of numerous other instances of third party use of the DCI mark such as the incorporation of “DCI” into over ninety web sites. The Court questioned whether Data's use of a domain name was merely a means of communication, or whether the domain name was used to identify its goods and services. It cannot be assumed that the ownership of a trade mark alone gives the sole right to use the corresponding domain name. However, in some instances, such as for the “.com” domain names, the relevant domain name registry may have a policy that requires a domain name user to justify the continued use of a domain name if the owner of the corresponding registered trade mark objects to the other party's use of the domain name.