White SW Computer Law Intellectual Property, Information Technology & Telecommunications Newsletter - July 1998

An appeal by One in A Million Ltd and others in the matters of British Telecommunications plc and Anor v One in a Million Ltd and Ors; Virgin Enterprises Ltd v One in a Million Ltd and Ors; J. Sainsbury plc v One in a Million Ltd and Ors; Ladbroke plc v One in a Million Ltd and Ors;and Marks & Spencer plc v One in a Million Ltd and Ors was unsuccessful. The Court of Appeal upheld the earlier decision that the registration of domain names which use or are similar to well known trade marks for the purpose of selling the domain name to the trade mark owner or another party for profit gives rise to claims for passing off and trade mark infringement. With respect to the alleged trade mark infringement, it was found that it had been established that a threat to infringe a trade mark existed and that the domain names were registered to take advantage of the distinctive character and nature of the marks.

If you are registering a domain name with the intent to use the domain name yourself, rather than to sell the domain name for a profit, the Court may take a different view to the approach taken in these matters. Registration of domain names associated with well known trade marks may lead to an Australian or an international law suit being initiated against you.

The Copyright Amendment Bill 1997 and Copyright Amendment Bill (No 2) 1997 were passed by the Federal Parliament on 15 July 1998. Except for some clauses concerning the parallel importation of packaging and labeling, the Copyright Amendment Bill 1997 and the Copyright Amendment Bill (No 2) 1997 will be likely to commence by the end of August 1998.

The Intellectual Property Laws Amendment Bill 1998 deals with matters affecting patents for pharmaceutical substances and changes to the patent attorney profession.

The Copyright Amendment Bill 1997 provides for wide-ranging copyright reforms in a number of areas such as: employed journalists' copyright; commissioned photographs; parallel importation of packaging and labeling; conversion damages and detention; copying for the services of the Government copying for people with an intellectual disability and print disability; copying of works by educational institutions; the Copyright Tribunal; and border enforcement. The Copyright Amendment Bill (No 2) 1997 includes provisions which remove copyright owners' control over “parallel importation” of music CDs; and provisions which increase the maximum monetary penalties for copyright offences.

If you would like to obtain advice in relation to how these amendments may affect your business, please contact our Steve White.

In July 1998, a class action complaint was issued in the Supreme Court of the State of New York by Against Gravity Apparel, Inc ( "AGA" ) against Quarterdeck Corporation ( "Quarterdeck" ). AGA had purchased the Quarterdeck product Procomm Plus version 4.0 for Windows 95. AGA was subsequently contacted by a Quarterdeck representative who informed them that Procomm Plus version 4.0 for Windows 95 was not Year 2000 compliant and that AGA woud be able to upgrade to Procomm Plus 32, version 4.5 for the cost of approximately US$30. It was subsequently announced by Quarterback that Procomm Plus 32, version 4.5 was not Year 2000 compliant. Quarterdeck then offered owners of Procomm Plus 32, version 4.5 a free upgrade to Procomm Plus, version 4.7, but did not offer the free upgrade to owners of Procomm Plus version 4.0 for Windows 95. AGA bought its copy of Procomm Plus version 4.0 for Windows 95 for approximately US$140, but by initiating the action as a class action, it has made the litigation more economically viable. AGA claimed amongst other things that Quarterback should not have continued to sell its Procomm Plus version 4.0 for Windows 95 product at a time when it knew or should have known that the software was non Year 2000 compliant.

It is important that you keep your customers informed as to whether your products have been tested for Year 2000 compliance or not. Wherever possible, your liability should be limited to the extent allowed at law.

If you have not checked that your business and your suppliers are Year 2000 compliant, you should prepare and implement a compliance plan. Your compliance plan should include, amongst other things, the following issues:

• Determine which hardware and software products are date dependent;
• Test your date dependent products and identify which non Year 2000 compliant products are critical to your business;
• Replace or correct non Year 2000 compliant products
• Alter your business operations to reduce the impact of errors arising with products which cannot be replaced or fixed
• Ask your suppliers whether they have audited their hardware and software for Year 2000 compliance, particularly any hardware or software that is used to interact with your key business areas. For example, if your supplier's inventory software is non-compliant, will you pre-order stock to avoid possible inventory shortfalls in your business or use an alternative supplier?
• Request written confirmation for your suppliers that their business is Year 2000 compliant to assist you in any litigation arising from loss and damage suffered by your business as a result of their failure to supply due to non-compliance problems.
• Include equipment with embedded software, such as audiovisual and telephone equipment

• Review your contracts such as software licences, hardware support agreements and product supply agreements and determine who has the legal responsibility for Year 2000 compliance.
• In all new contracts, ensure the other party bears the legal responsibility for Year 2000 compliance and where this is not possible, limit your business' liability to other parties.