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

Once a trade mark application for registration has been approved by the trade mark examiner, the trade mark is advertised in the Trade Mark Journal and parties may lodge a Notice of Opposition, if they have grounds to object to the trade mark being registered. In the matter of Lasernett Pty Ltd v Hewlett-Packard Company , Hewlett-Packard filed a Notice of objection the Lasernett's application for the registration of the trade mark “Lasernett”. Lasernett's application was in relation to goods and services in classes 9, 35 and 41 and Hewlett-Packard owned a similar trade mark “Laserjet” in classes 9 and 16. The hearing officer considered the likelihood that the two trade marks were deceptively similar, by considering issues such as the likely recollection by members of the public of each mark and whether such recollection was likely to be the same; the sound of both marks; the goods to which they are applied; and the likely consumers of the goods. The Hearing Officer found that the two marks were not deceptively similar and Lasernett's trade mark was allowed to proceed to registration. In this case, other than both using laser technology, the two parties' goods were not similar. Had their products both been laser printers, for example, it is likely that the Hearing Officer may have found in favour of Hewlett-Packard, the owner of the earlier registered trade mark, which would have prevented Lasernett from registering their trade mark. A registered trade mark does not provide protection in relation to all goods and services. In the application for registration, you must specify which goods and services you want to use the trade mark for. Another party could possibly register the same or a very similar trade mark for a different class of goods or services, so it is important to include all possible uses of the trade mark on your application form. However, if you register the trade mark for a particular class of goods or services and you do not use the trade mark in that field, it is possible that the trade mark could be struck off for non-use.

Quite often in litigation matters, the parties to the dispute will settle the matter prior to the Court hearing the dispute. When settlement is reached, as it often is, at the door of the Court the parties' legal representatives will usually draft a settlement agreement which states the terms on which the matter is to be settled. The agreement may not be signed by the parties themselves, but it is binding upon them. In the matter of Geko Internet v Geko, an agreement was reached in regard to the payment of money to settle the matter which included claims in respect of a web search engine and the transfer of IP addresses and NIC handles. The Court found that later on the day when the settlement agreement was prepared, Geko Internet's representatives decided to change its mind in relation to the ownership of the web search engine. The parties could not agree as to whether the settlement agreement was binding or not, as a formal document was yet to be prepared and signed. The matter went back before the Court and it was held that the original settlement agreement was binding. When you are involved in litigation, it is strongly advisable that you are present at Court, or easily contactable so that your legal advisors can seek instructions from you in relation to settlement negotiations. It is important to state that there is no binding agreement, unless signed in writing by both parties.

In the matter of Dataflow Computer Services Pty Ltd and Cedent Software Corporation v Daniel Nicholson, Dataflow claimed that Nicholson engaged in misleading and deceptive conduct and infringed the copyright owned by Dataflow, by selling computer games known as “Star Craft”, “Grand Prix Legends” and “Caesar III”. Before trial, Nicholson's legal representatives ceased to act on his behalf and Nicholson failed to make subsequent appearances at Court. Dataflow requested that the copies of the Computer games that had previously been delivered up to the Court be released to it. Nicholson had indicated that the computer games were owned by a company in Singapore and so the Court required that Dataflow give notice to the Singapore company of the Court's intention to release the copies of the computer games to Dataflow. The Court also ordered that Nicholson be permanently restrained from importing into Australia software which included any products belonging to Cedent , from selling, letting for hire, or by way of trade offering or exposing for sale or hire such programs and from exhibiting the programs in public. When you are commencing litigation for copyright infringement, it is important to bear in mind whether the defendant is likely to have any assets that could be used to satisfy an award for damages made in your favour. It is important to choose your course of action to give the best outcome in each scenario - where the defendant has no assets, the most you are likely to receive is an injunction that prevents the defendant from continuing to infringe your copyright and an order that the defendant deliver up to you all infringing articles. The cost of commencing Federal Court proceedings should be considered against the likely outcome to determine whether such litigation is affordable and cost-effective.

When a prototype of an artistic work is shown in confidence, can the concept be copied in another medium without a copyright infringement occurring? In the matter of Brown v Village Roadshow Corporation Limited & Ors, Brown had developed the concept for, amongst other things, an interactive computer game entitled “Futureman” and supplied a proposed CD in its jacket cover which outlined the basis of the story and songs involving the character “Futureman”, to one of the defendants, Roadshow Entertainment Pty Ltd. Brown's project was not pursued and his materials were returned, however he was encouraged to keep in touch as development continued. Approximately two years after the proposal was supplied by Brown, statues appeared in the Village cinemas complexes at the Melbourne Crown Casino and in Sunshine. These statues were entitled “Future Man”. Reproductions of the statues were also used in advertising material and company documents. Brown commenced litigation for copyright infringement, trade mark infringement and breach of confidential information. The defendants sought to have the Court strike out Brown's claims. After considering the arguments put forward by the defendants, the Court decided that there was no claim to be answered in relation to the copyright infringement as there was no visual similarity between Brown's character and the statues and the fact that copyright cannot subsist in the “Futureman” concept or idea. However, the claims of trade mark infringement - Brown is the owner of the registered trade mark “Futureman” and for breach of confidential information were allowed to continue. The Courts will rarely dismiss a claim without a hearing. Provided that there is a real question of fact or law to be determined, and the rights of the parties depend upon it, then the Court is unlikely to dismiss the action as being frivolous, vexatious or an abuse of process.

In the US matter of MA Mortenson Company, Inc v Timberline Software Corporation and Software Data Systems, Inc, Mortenson bought a software program to assist in the preparation of bids in the construction industry. Due to a bug in the software, a bid prepared by Mortenson was submitted for a total sum US$2,000,000 below the correct figure. Mortenson sued Timberline and SDS for breach of warranties. At the initial hearing of the matter, the Court found in favour of Timberline and SDS stating that they were entitled to rely on their limitation of liability clauses in their licensing agreement. Mortenson appealed this decision, claiming the contract in question was their purchase order and that the terms of the software licence should not be included in the contract. The Court found that such arguments ignored the commercial realities of software sales and upheld the original decision. Provided that shrink wrap licences contain standard terms and conditions and that they are brought to the attention of the customer, the US Courts appear to be supportive of the enforcement of shrink wrap licenses. Australian Courts have not ruled on this issue, but are likely to follow that same path as the US Courts. Nevertheless, you should consider how to make your licensing terms clear to your customers to ensure that you are able to rely on the important clauses such as those that limit your liability.