1. IT & Communications
The ITC Edge
In this issue eBay and PayPal: Public Benefit?
eBay and PayPal: Public
Benefit? eBay International AG's proposal to limit the payment processing options for
sales on eBay.com.au was controversial. After months of very public debate
Gotalk forced to compensate
on the public benefits and detriments of the proposal, it has been abandoned.
consumers for the actions of its
eBay issued a statement on 3 July 2008 indicating that it had withdrawn its
Hoy Mobile v Allphones: exclusive dealing notification to the Australian Competition and Consumer
Lessons for mobile phone Commission (ACCC) and confirmed that all existing payment methods will
Policing trademark use on the
internet: Tiffany v eBay Exclusive Dealing
Nine Network v Ice TV: the Section 47 of the Trade Practices Act 1974 (Cth) (TPA) prohibits exclusive
copyright protection debate
dealing, including the supply by a company of goods or services on condition
that the purchaser will not acquire goods or services from a competitor of the
Recent developments in the company or a competitor of one of its related bodies corporate. Some forms of
domain name sphere exclusive dealing, such as that described above, are prohibited only if the
Privacy: Lessons from recent conduct in question has the purpose or likely effect of substantially lessening
Case Notes competition. Others are prohibited "per se", that is, regardless of their effect on
Back page Bytes #8: competition.
Representations and section 52
risk Section 93 of the TPA permits companies to obtain statutory protection for
specified exclusive dealing conduct which may otherwise contravene section
47 by notifying the ACCC of the conduct. The notification process differs
depending on whether the conduct in question is "third line forcing" or other
exclusive dealing conduct.
For the latter, the effect of notification is that the conduct will be deemed not to
have the effect or likely effect of substantially lessening competition for the
Sydney purposes of section 47 from the point at which the notification is lodged,
Baker & McKenzie therefore providing the entity engaging in the conduct with "immunity" in
Level 27, AMP Centre
50 Bridge Street
relation to that conduct for the purposes of section 47. The ACCC may
Sydney NSW 2000 withdraw that immunity by revoking the notification if it is satisfied that the
conduct is likely to have the effect of substantially lessening competition and
Baker & McKenzie
that the public benefit likely to result would not outweigh the detriment caused
Level 39, Rialto by the likely lessening of competition.
525 Collins Street
Melbourne VIC 3000
©2008 Baker & McKenzie
All right reserved Back to top Print document
2. Baker & McKenzie
eBay has withdrawn its exclusive Notification
dealing notification to the ACCC.
In this case, the conduct in question related to PayPal, a related body corporate
of eBay that supplies online payment services.
eBay filed an exclusive dealing notification with the ACCC on 11 April 2008
• sellers on eBay must offer PayPal as one of their accepted payment
• payments may only occur via PayPal, Visa/MasterCard processed by
PayPal or payment on collection; and
• an exception would apply for the sale of large products, being cars,
motorcycles, aircraft, boats, vehicles, trailers, trucks, services, real
estate and businesses.
eBay argued that this would increase safety and security and lead to a better
Benefits such as increased safety ACCC Draft Notice
and security were weighed
against reduction in consumer The ACCC received approximately 700 submissions, mostly critical of eBay's
choice. proposal. On 12 June, it issued a draft notice proposing to revoke the immunity
which automatically applied to eBay when the notification was lodged.
The ACCC accepted that, on the information available, it appeared that eBay
was implementing the conduct for the purposes of transaction security.
However, the ACCC's draft view was that:
• eBay holds a substantial degree of power in the online marketplaces
market in Australia; and
• the conduct in question:
− would allow eBay to leverage that power into the market in
which PayPal operates (which was not fully defined);
− would have, or is likely to have the effect of substantially
lessening competition in that second market;
− may result in detriment, including:
The ACCC has reinforced the
paramount importance of • by preventing customer choice of their preferred
consumer choice. payment method; and
• by reducing the incentive for other payment system
providers to innovate; and
− may result in public benefit, including by providing increased
dispute resolution for high value transactions.
The ACCC's overall draft view was that the substantial anti-competitive
detriments outweighed any public benefits arising from the proposal. The
ACCC stated that "consumers are in the best position to determine whether, for
their particular transaction, PayPal offers the best features in terms of
security, fraud protection, dispute resolution and insurance, at the price
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3. The ITC Edge, July 2008
The ACCC set a 3 July deadline for further submissions on the issue, after
which it intended to issue a final ruling.
In response, eBay extended the deadline for the implementation of its proposal
Evidence showed rapid growth in
pending the ACCC's decision but continued to push towards implementation
the online retail industry.
with suggestions it may negotiate with the ACCC and potentially consider
court action. However, on 3 July as the ACCC's submission deadline was
reached, and in the face of continuing negative public comment, eBay indicated
that it was retracting its notice and abandoning the second stage of its policy.
eBay's 3 July statement confirmed that all existing payment methods will
remain, but that all sellers on eBay.com.au would be required to offer PayPal as
a payment choice.
While eBay's retraction of its notice means that the legal issues in dispute here
will not be pursued further at this stage, it is important to note the ACCC's
view that consumer choice is of paramount importance and that any public
benefit arising from conduct that limits that choice must be significant to swing
For more information please contact: the balance in favour of such conduct being permitted. It should not be
assumed therefore, that the immunity obtained when the exclusive dealing
notice is lodged will be allowed by the ACCC following examination.
Partner The ACCC's draft notice indicated that the online retail industry has been
+ 61 3 9617 4445 growing at approximately 5%-10% per year over the last 5 years, and is
firstname.lastname@example.org currently earning approximately $15 billion in revenue. It is essential that
businesses operating in this expanding space have a good understanding of
both the market, and their own market power.
Associate The information made available in this case about the current state of the online
+ 61 2 8922 5251 retail industry is therefore a valuable resource for online retailers. To access
email@example.com the materials that are available on the ACCC website click here.
Gotalk forced to compensate
consumers for the actions of its
The Australian competition and Consumer Commission (ACCC) investigated
Gotalk has agreed to make a telecommunications service provider Gotalk after receiving a series of
court enforceable undertaking complaints from consumers during the course of a Gotalk telemarketing
after an ACCC investigation campaign. It was alleged by consumers, who contacted the ACCC, that
determined that, through the Gotalk's telemarketers represented that:
actions of its telemarketing
contractors, Gotalk had breached • Gotalk was calling on behalf of the consumer's current
the fair trading provisions of
• Gotalk was an owner, subsidiary, agent or reseller of the consumer's
• consumers were required to change their carrier to Gotalk; and
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4. Baker & McKenzie
The lawfulness of a telemarketing • the price and/or effect of the terms and conditions of Gotalk services,
campaign is the responsibility of and changing to Gotalk, would not compromise any benefit they
the company and the onus is on currently enjoyed for bundling multiple services with one carrier.
the company to monitor what the
telemarketing contractor says After investigating Gotalk's telemarketing campaign the ACCC concluded that,
and does. through the actions of its telemarketing agents, Gotalk breached the fair trading
provisions of the Trade Practices Act 1974 (Cth) (TPA) prohibiting false and
misleading representations and harassment or coercion.
The ACCC accepted court enforceable undertakings from Gotalk concerning
the actions of its telemarketing agents, under section 87B of the TPA, under
which Gotalk has, among other measures, undertaken to:
• compensate consumers who suffered any financial loss as a result of
Gotalk's breaches of the TPA;
• write to customers who transferred their services to Gotalk since mid
2004 as a consequence of telemarketing, advising them of the conduct
alleged by the ACCC to have affected Gotalk customers;
• publish advertisements in major newspapers informing the public of
the agreed breaches and that Gotalk will pay compensation to those
who have suffered financial loss as a result of them;
Gotalk must monitor the conduct
• establish and implement a trade practices compliance program for its
of its telemarketing contractors
and pay compensation to employees and other persons involved in Gotalk's business to minimise
consumers who suffered any the risk of further breaches;
financial loss as a result of its • not acquire telemarketing services unless it is reasonably satisfied, in
breach of the TPA. each case, that the supplier has the internal controls and compliance
procedures necessary to ensure that any conduct concerning the
promotion of Gotalk services complies with the TPA;
• use best endeavours to ensure the strict compliance by any telemarketer
with scripts supplied by Gotalk for the promotion and sale of its
• cause the live monitoring and recording by a Gotalk representative of a
random sample of customer calls; and
• provide the ACCC with recordings of calls to consumers and any other
correspondence if the ACCC requests.
The ACCC will hold the company, not the
The ACCC Chairman Graeme Samuel has warned that "Australian businesses
using outsourced telemarketers must control what their agents are doing" and
"[u]ltimately, if the telemarketers breach the law, the business will be held
These comments emphasise that companies who rely on outsourcing a service,
such as telemarketing cannot 'pass the buck' or attempt to hide behind its
contractors. The Gotalk example demonstrates that a company needs to be
mindful of its contractors' actions and ensure that contractors act in accordance
with the directions they are given. A failure to do so may expose a company to
liability for unlawful conduct, even though the company has not endorsed the
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5. The ITC Edge, July 2008
Companies must monitor telemarketers
The Gotalk experience demonstrates that the ACCC will prosecute companies
who fail to control their telemarketers. In addition, recent developments in the
law dealing with telemarketing has given the ACCC teeth to prosecute
A company must ensure its companies for unlawful telemarketing practices, regardless of whether the
telemarketing contractors act in company conducts the telemarketing themselves or outsources it to contractors.
its best interests, and in
accordance with its directions. In order to minimise risk, it is imperative that companies ensure telemarketing
contractors act in accordance with the best interests of the company and do not
act outside the scope of their instructions. Ensuring the lawfulness of the
telemarketing campaign is the responsibility of the company and the onus is on
the company to monitor what the telemarketing contractor says and does.
Companies must ensure that telemarketers comply
with legal obligations
During the Gotalk telemarketing campaign, the complaints made to the ACCC
against Gotalk primarily related to Gotalk's telemarketers conduct, which was
alleged to be false, misleading, and deceptive conduct in breach of sections 52
and 53 of the TPA. There were also claims that Gotalk, through its telemarketers,
had harassed and coerced consumers under section 60 of the TPA.
In order to avoid liability, it is best practice to ensure that all aspects of a
telemarketing campaign comply with the TPA, such as by vetting scripts to
ensure that consumers are being provided with true and accurate descriptions of
the products and/or services being promoted to them.
In addition, companies who rely on telemarketing must be aware of their
obligations under the Do Not Call Register Act 2006 (Cth) (DNCR Act) and
telemarketing, should take
precautions to safeguard against
other laws regulating telemarketing, such as the Fair Trading Acts in certain
breaches of the TPA and other States.
laws, such as the Do Not Call
Register Act, regulating Measures to protect yourself and your business
Any company utilising telemarketing, whether through a contractor or on its
own, should take precautions to safeguard itself against breaches of the TPA,
the DNCR Act and any other laws regulating telemarketing. Possible measures
that may be used to minimise risk include:
For more information please contact:
• reviewing telemarketing scripts;
• monitoring randomly selected calls; and
Senior Associate • recording both successful and unsuccessful telemarketing calls to avoid
+ 61 3 9617 4502 conduct that may amount to harassment or coercion.
+ 61 3 9617 4207
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6. Baker & McKenzie
Hoy Mobile v Allphones: Lessons
for mobile phone distributors
A business' own conduct may The recent Federal Court decision of Hoy Mobile Pty Ltd v Allphones
prevent it from exercising a right Retail Pty Ltd (No 2) 2008 FCA 810 concerned a souring relationship
to terminate. between Allphones and a dealer/franchisee. The case highlights:
• the challenges of managing distribution arrangements in the highly
competitive mobile sector, in which plans and commissions are
constantly adjusted to meet competitive pressures;
• the danger of over-reacting to poor dealer behaviour or imposing
conditions on dealers that are in addition to the agreed contract terms;
• that a business' own conduct may prevent it from terminating a dealer
who has engaged in fraud.
Overview of the dispute
In June 2003 Allphones granted Hoy Mobile a franchise for an Allphones
mobile phone retail business. Over time a number of disagreements arose
between Hoy Mobile and Allphones.
In August 2006 Allphones gave Hoy Mobile notice of termination for breach,
on the basis that Hoy Mobile had engaged in fraud by unlocking and selling
mobile phones and not accounting to Allphones for extra amounts earned from
The agreement was not updated Hoy Mobile admitted the fraud but claimed Allphones should be prevented
to keep up with changes to the from terminating due to Allphones' dishonesty. Allphones had concealed from
commission structure. Hoy Mobile and failed to pay it certain "commissions" which Allphones had
received from mobile carriers based on sales made by Hoy Mobile. During the
course of the franchise agreement, certain of the mobile carriers made changes
to the commission structure, so that "bonuses" as well as "commissions" were
payable. No amendments were made to the franchise agreement to reflect the
Allphones did not disclose to franchisees all payments that Allphones received
based on sales by the franchisees. Allphones took steps to conceal this from
franchisees through the payment directions it gave to mobile carriers and by
making undisclosed changes to financial schedules issued on mobile providers’
stationery before forwarding them to franchisees.
When Hoy Mobile began querying whether amounts were being correctly paid
Not all payments received by
Allphones for franchisees' sales there were already difficulties in the relationship. At a meeting to discuss the
were disclosed to the payments, Allphones' representative became abusive, overbearing and
franchisees. aggressive to Mr Hoy and threatened to take away Hoy Mobile’s signage and
stock. On another occasion, an Allphones representative said that it would not
lift a "hold" on Hoy Mobile’s commission, unless Hoy Mobile executed a new
(and different) franchise agreement. Allphones had no contractual basis for the
suspensions or for this demand.
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7. The ITC Edge, July 2008
Rares J held that, each party was in breach and had acted dishonestly.
Allphones had actively and deliberately concealed commission payments due
to Hoy Mobile. The fact that a payment was labelled a "bonus" rather than a
"commission" made no difference. Allphones had engaged in "calculated
Each breach was of such seriousness that the other party would ordinarily be
entitled to terminate the franchise agreement. However, Rares J noted that a
party who wishes to terminate must be ready and willing to perform at the time
at which the right is sought to be exercised.
In this case, neither party passed this test. As a result, even though Hoy Mobile
Although Hoy Mobile had had engaged in fraud and the franchise agreement gave Allphones an express
engaged in fraud, Allphones
right to terminate due to Hoy Mobile's fraud, Allphones could not rely on its
could not rely on its contractual
right to terminate. contractual right to terminate.
In addition, by placing Hoy Mobile's commission and stock on hold and
demanding that it execute a new franchise agreement, Allphones had engaged
in unjustified bullying and oppressive conduct. That together with its conduct
in concealing commissions, amounted to unconscionable conduct in breach of
section 51AC of the Trade Practices Act 1974 (Cth), which justified an order
preventing Allphones from relying on the termination notice.
Hoy Mobile was unsuccessful in an argument that Allphones had elected to
affirm the franchise agreement by continuing to treat it as a franchisee after it
became aware of the fraud, because at all relevant times in the election period,
Allphones had some but not full knowledge of the fraud. Rares J noted that
Hoy Mobile could not complain that it was prejudiced by any delay by
Allphones in exercising its right of termination when Hoy Mobile had not made
full disclosure of its fraud to Allphones and had sought a delay to enable Hoy
Mobile to explain its position.
The decision provides key reminders for those entering mobile phone or similar
• A party is exposed to significant risk if the agreement does not
reflect the key terms of the arrangement. The franchise agreement
did not properly identify the agreed arrangements regarding
Each party was hampered by
being unable to produce commission or territory;
evidence of agreed terms on
• The basis for charging must be clearly set out in the agreement.
Allphones was found to have introduced a number of additional
charges for which it had no basis under the agreement;
• Important communications should be confirmed in writing and
retained. In a number of matters Rares J rejected the recollection of
discussions and events put by representatives of the parties and there
was little documentation to support any version of events. Each party
was hampered by being unable to produce the signed version of the
agreement and franchise disclosure document and critical emails;
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8. Baker & McKenzie
• Bullying and threatening behaviour will not be viewed favourably.
In addition to refraining from overtly abusive behaviour, companies
need to consider carefully their reasons for treating any one dealer or
franchisee more harshly than the others (such as by withholding a
commission or supply or not passing on a benefit passed onto others);
For more information please contact: • A party will be prevented from enforcing a right of termination if
it is itself in breach and not ready and willing to perform at the
time it wishes to terminate. Although Hoy Mobile had clearly
Penny Ward breached the agreement through selling unlocked phones and had
Partner engaged in fraud, Allphones’ conduct which was "every bit as
+ 61 2 8922 5167 dishonest", prevented it from exercising its rights of termination.
While both parties in this case were at fault, Allphones’ own dishonest
behaviour and aggressive conduct towards Hoy Mobile prevented Allphones
+ 61 2 8922 5221 from exercising what would have ordinarily been a clear right to terminate for
Policing trademark use on the
internet: Tiffany v eBay
Who should bear the burden of policing trademarks in internet commerce? In
the US, the recent United States District Court case of Tiffany (NJ) Inc. and
Tiffany and Company v. Ebay, Inc. (14 July 2008) suggests that the answer is
Trademark holder bears burden the trademark holder.
of policing trademarks in internet
This case revolved around the sale of counterfeit Tiffany silver jewellery on
eBay's online auction platform.
Tiffany argued that eBay was on notice that a counterfeit problem existed on its
website and eBay therefore had a responsibility to proactively investigate and
control the individual sellers who posted counterfeit items on eBay's website.
Specifically, Tiffany argued that eBay had engaged in direct and contributory
Direct trademark infringement
The Court considered a two pronged test for trademark infringement:
1. whether Tiffany's mark was valid and entitled to protection; and
2. whether eBay's use of the mark was likely to cause confusion as to the
origin of the goods.
As to the first point, it was easy to see the value and worth in affording the
Tiffany trademarks protection. As to the second point, the Court considered
the various ways eBay used the Tiffany marks to advertise the sale of Tiffany's
products on its website. The marks may appear on eBay's home page, through
communications with sellers and buyers, through lists of popular brand names
and top search terms and finally through purchased sponsored link
advertisements on Yahoo! and Google.
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9. The ITC Edge, July 2008
The Court held that eBay's use of the marks in each of these ways was
permitted by the US doctrine of nominative fair use. This doctrine recognises
the right of a trader in a branded product to use the product's brand name to
accurately describe the product, so long as the trader does not imply an
affiliation with the owner of the product and thereby create confusion. The
Court held that eBay's use of the marks in no way suggested sponsorship or
eBay's use of the marks did not endorsement by Tiffany and that eBay only used so much of the marks as was
suggest sponsorship or reasonably necessary to identify the product:
endorsement by Tiffany.
[T]he Tiffany name is what gives the jewelry the cachet it enjoys. Absent
eBay only used so much of the
marks as was reasonably
the Tiffany brand, a silver heart necklace or a silver bracelet with an ID
necessary to identify the chain would simply be a piece of jewelry instead of a symbol of luxury.
products. Indeed, were eBay precluded from using the term “Tiffany” to describe
Tiffany jewelry, eBay would be forced into absurd circumlocutions. To
identify Tiffany jewelry without using the term Tiffany — perhaps by
describing it as “silver jewelry from a prestigious New York company
where Audrey Hepburn once liked to breakfast,” or “jewelry bearing the
same name as a 1980s pop star” — would be both impractical and
ineffectual in identifying the type of silver jewelry available on eBay.
Contributory trademark infringement
Here, the relevant test was whether a person continues to supply its product to a
person it knows or has reason to know is engaged in trademark infringement.
The Court held that the relevant standard was whether eBay knew or had
reason to know that a third party was infringing Tiffany's trademarks and
subsequently continued to permit that party to list its items on eBay's website.
It rejected that any lower threshold of responsibility of 'reasonable anticipation'
or 'generalised knowledge' of any third party infringement applied to eBay.
Working in eBay's favour was the concession by Tiffany that eBay speedily
responded to take down notices and since Tiffany's initial complaint to eBay, it
had removed Tiffany advertising from its home pages, greeting pages and on
Google and Yahoo!.
The Court also rejected Tiffany's alternate claims of unfair competition, false
Query whether law inadequate to
protect trademark owners' rights advertising and direct and contributory trademark dilution. In rejecting these
in light of increasing internet arguments, the Court cited eBay's willingness to remove items or suspend
commerce. sellers when it discovered counterfeit goods on its website and the defensive
doctrine of nominative fair use.
In rejecting each of Tiffany's claims, the Court noted that as the law currently
stands in the US, Tiffany must ultimately bear the burden of protecting its
trademark. However, Tiffany and other significant trademark holders should
take some comfort from the Court's further comments that "policymakers may
yet decide that the law as it stands is inadequate to protect rights owners in
light of the increasing scope of Internet commerce and the concomitant rise in
potential trademark infringement". Considering this comment, it would not
surprise many if this case is appealed.
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10. Baker & McKenzie
How would this case be decided in Australia?
To date, no similar case has been brought before an Australian court. The law
in Australia is therefore undecided on this issue.
Australia does have similar prohibitions to US law on the use of registered
trademarks by anyone other than the registered owner or an authorised user of
the trademark. Similar to the US doctrine of nominative fair use, under
For more information please contact: Australian law, where a mark is used in good faith and purely for description,
such as to describe a characteristic, quality or function, there is no trademark
Partner Therefore, the reasoning of the US court that the use of the word 'Tiffany' was
+ 61 2 8922 5274 reasonably necessary to identify the products on offer and that eBay's use of the
firstname.lastname@example.org marks only extended to describing the products should equally apply against
any claim of trademark infringement in Australia.
Linda Pellegrino However, given the subjective nature of this area of law and the fact that no
Associate similar case has yet been decided in Australia, it is not certain that an
+ 61 2 8922 5180
Australian court would decide this case the same way. In any event, even if the
reasoning of the US court was followed here, in Australia the additional
prohibition of misleading and deceptive conduct under the Trade Practices Act
1974 (Cth) may present further legal obstacles to the kind of trademark use in
which eBay engaged.
Nine Network v Ice TV: the copyright
protection debate continues
At date of publication, Ice TV has Can copyright be relied upon to protect mere facts and if so, to what extent?
applied for special leave to The Full Federal Court's decision in Nine Network Australia Pty Limited v Ice
appeal to the High Court. TV Pty Limited  FCAFC 71 fuels debate in Australia on this
In its 8 May 2008 finding that electronic programme guide maker Ice TV had
infringed the Nine Network's copyright in its weekly programme guide, the
• reversed Bennett J's decision in August 2007 in favour of Ice TV.
(See Headlines November 2007);
• clarified the scope of copyright protection for compilations; and
• reviewed the relevant test for infringement of copyright.
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11. The ITC Edge, July 2008
The Nine Network creates a weekly schedule of its programming (Weekly
Schedule). The Weekly Schedule contains time and title information for all
programming in one broadcast week. It also incorporates programme
information and synopses.
Nine provides the Weekly Schedule to a number of programming aggregators
including HWW Limited, eBroadcast Australia and Pagemakers Pty Limited
(Aggregators). The Aggregators incorporate the Weekly Schedule into various
television guides which contain the programming schedules for all free to air
broadcasters. These guides are published in print (eg TV Week), online (eg
yourtv.com.au), as mobile phone content services, and as an electronic
programme guide (EPG) via Foxtel.
Ice TV launched its own EPG for free to air television. Ice TV's EPG can be
used with personal video recorders (PVRs) and computer based media centres
which facilitate the viewing of digital television through a computer. In
addition to their time shifting capabilities, PVRs typically enable viewers to
"skip" or fast forward through advertising in recorded programming which, in
turn, has the potential to adversely impact the advertising revenue generated by
free to air networks.
Bennett J's decision
Bennett J held that the Weekly While it was common ground that Nine owned copyright in the Weekly
Schedule as a whole was the Schedule, Bennett J held that the Weekly Schedule as a whole was the relevant
relevant copyright work. copyright work. This was significant because Nine then needed to establish
infringement of the Weekly Schedule as a whole (and could not establish
infringement by claiming, for example, that a component of the schedule which
had been reproduced by Ice TV was a separate copyright work).
In addition, the Weekly Schedule did not enjoy copyright protection because of
its literary merits but rather as a compilation of factual information.
Compilations of this kind expressly qualify for copyright protection as original
literary works under the Copyright Act 1968 (Cth). It has been long established
that such protection exists to protect the skill and labour of the author of the
Justice Bennett identified two types of skill and labour in the creation of the
• the skill and labour of selecting and arranging the programmes to be
shown on the Nine Network to attract viewers; and
• the skill and labour of drafting the synopses, selecting and arranging
additional information and recording all the information into
Bennett J held that the "time and
title" information was not a Importantly, Justice Bennett held Nine's programme selection was not relevant
substantial part of the whole to the compilation once the Weekly Schedule was prepared. Because of this
compilation and therefore there finding, Justice Bennett confined her consideration of copyright to the labour
was no copyright infringement. and skill relevant to the arrangement and content of the schedule itself (eg a
comparison of the Schedules themselves). As the synopses prepared by Ice TV
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12. Baker & McKenzie
for its guide were different from those prepared by Nine for the Weekly
Schedule, there was no infringement arising from the synopses.
This meant that the principal similarity between the schedule was the "time and
title information" in the respective schedules (eg both schedules stated that the
6pm Network Nine news was on Channel 9 at 6pm). Crucially, Bennett J held
that such "time and title" information was not a substantial part of the whole
compilation and that therefore there was no copyright infringement.
The Full Federal Court
Interestingly, the three judges of the Federal Court who decided this appeal
The Full Court held that the
preparatory work of programme were the same three judges who decided Desktop Marketing Systems Pty
selection should not be ignored Limited v Telstra Corporation Limited  FCAFC 112 which had been the
for the purpose of assessing the most recent authoritative case in Australia on copyright protection for
skill and labour which is protected compilations.
by copyright in a compilation.
The Full Court in Nine v Ice held that the preparatory work of programme
selection should not be ignored for the purpose of assessing the skill and labour
which is protected by copyright in a compilation.
Indeed, the Court took the view that:
"the skill and labour in selecting and arranging programming should
not be regarded as separate and discrete from the extremely modest
skill and labour involved in setting down on paper the programmes
already selected and presenting them in the form of the Weekly
Schedule. The skill and labour expended by Nine were part of a single
process leading to the creation of the copyright work".
The Full Court held that the The Court also held that Bennett J had erred in assessing whether the time and
correct approach is to determine title information was "qualitatively more important" than the synopses when
whether the time and title determining infringement. According to the Full Federal Court, the correct
information is an essential or approach is to determine – irrespective of the relativities of particular content -
material part of the work. whether the time and title information is an essential or material part of the
As the time and title information was of particular interest to potential viewers,
and as the accuracy of the time and the information is essential to Ice's business
model, the Court held that:
"Ice's use of time and title information, derived ultimately from
the Weekly Schedules, involved the reproduction of more than a
slight or immaterial portion of Nine's copyright work".
The decision is generally consistent with the trend of Australian cases
Expansive copyright protection involving compilations. Our courts give priority to protecting the time and
for compilations provides defacto
effort invested by the compiler ahead of concerns about the risk that expansive
control over the subject of those
compilations. copyright protection for compilations provides defacto control over the facts or
data which are the subject of those compilations.
As the Federal Court appeared to have protected the skill of Nine's programme
directors in their programming selections (rather than the effort in compiling
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13. The ITC Edge, July 2008
For more information please contact:
factual information about the program), it raises real questions about the
capacity, if any, for EPG makers to produce a competitive programme guide.
For example, would copyright in a weekly schedule be infringed by a guide
Anthony Foley created solely from watching television? On this point, it should be noted that
+ 61 2 8922 5289 Ice TV did much more than crudely and slavishly copy the Weekly Schedule.
As a practical matter, any EPG maker in Australia will almost certainly have to
deal with the free to air networks in order to obtain programme information or
otherwise face the real risk of copyright infringement.
At the date of publication, Ice TV has applied for special leave to appeal to the
+ 61 2 8922 5117
email@example.com High Court.
Recent developments in the domain
In July there were two major developments in the domain name sphere that
provide greater scope for organisations to use a broader range of domain
The first of these is the new policy which allows organisations to transfer
Australian second level domain names for any reason. The second is the
proposed introduction of a process that will allow organisations to apply for a
large range of top level domain names, subject to the fulfillment of certain
New rules on domain name transfers
A new policy on the transfer of .au domain names (New Policy) took effect on
1 June 2008. It has replaced the Transfer (Change of Registrant) Policy dated
12 July 2004 (Old Policy).
Broadly speaking, the Old Policy was designed to prevent cybersquatting,
Old Policy on Domain Name
transfers no longer apply. domain or name hoarding and speculative behaviour. A domain name could
only be sold or transferred to a new registrant if one or more of the following
• the registrant sold part or all of its business operations or assets or
assigned part or all of its intellectual property rights to the new
• the registrant ceased to exist and the domain name passed to the new
registrant by operation of law;
• the registrant and the new registrant were legal entities belonging to the
same group of related entities;
• the registrant held the domain name licence as agent of the new
• the registrant was ordered to transfer the licence to the new registrant
by an arbitrator, tribunal, court or legislative body; or
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14. Baker & McKenzie
• the registrant agreed to transfer the domain name licence to the new
registrant in settlement of a dispute.
In addition to the above, the new registrant was required:
• to satisfy the normal eligibility and allocation rules for the domain
• not to breach the Australian Domain Name Administrator's (auDA)
policy prohibiting the sale of domain name registrations or the transfer
of a proprietary interest in the registration.
The review recommending change to the Old Policy
On February 2007, the auDA Board established the 2007 Names Policy Panel
(Panel) to consider whether registrants should be allowed to sell their .au
domain names. Following public consultation, on November 2007, the Panel
• the registrant transfer policy be relaxed to allow a registrant to transfer
its domain name licence to another eligible entity for any reason; and
• the auDA conduct a two year review of the new transfers policy.
Its main rationale was to allow people to access domain names that would not
otherwise be available and allow the transfer of domain names to those who
have the best use for them.
The Panel suggested that the two year review consider:
• the total number of domain names transferred and the number of times
individual domain names are transferred;
• secondary market pricing; and
• whether there has been any increase in complaints and disputes over
These recommendations were approved by the auDA Board on December 2007.
Domain Names may be The New Policy took effect on 1 June 2008. It removes the limit on the
transferred for any reason after circumstances in which domain names may be transferred. Upon the transfer
six months. of the domain name, the new registrant will be subject to the normal eligibility
and allocation rules, including the .au Dispute Resolution Policy.
The main restrictions on a sale or transfer under the New Policy are:
• domain names cannot be registered for the sole purpose of resale or
transfer to a third party;
• a domain name cannot be transferred for the first six months after it is
registered. This restriction does not apply to domain names that have
been renewed or previously transferred. An organisation can apply to
the auDA for authorisation to transfer a licence to a domain name
within the first six months in certain circumstances, such as where a
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15. The ITC Edge, July 2008
court orders the transfer or where the registrant and the new registrant
are legal entities belonging to the same group of related entities;
• the new registrant must comply with normal eligibility and allocation
rules for .au domain names; and
• the transfers will be processed by the registrar for that domain name
using a standard transfer form. The registrar for the domain name may
charge a fee for the transfer.
For a full copy of the New Policy, click here.
Impact of the New Policy
Organisations should regularly The New Policy will allow organisations to more easily transfer and sell their
review their .au domain names to licence to a domain name.
ensure they have registered all
names they require in their On the flip side, the New Policy makes it easier for organisations to register
business. and sell domain names that may be similar to an organisation's registered
domain names. For example, an organisation may register the domain name
www.organisation.net.au then, after six months, sell its licence to that domain
name for any reason. In this case, the organisation who owns the licence in the
domain name www.organisation.com.au may (among other recourse)
commence proceedings under the auDA Dispute Resolution Policy which
would require the organisation to show that (a) the domain name
www.organisation.net.au is identical or confusingly similar to a name,
trademark or service in which it has rights, (b) the new registrant has no right
or legitimate interest in respect of the domain name, and (c) the domain name
had been registered or subsequently used in bad faith.
Therefore, as the transfer and sale of domain name is easier under the New
Policy, it is important that organisations regularly review their .au domain
names to ensure that they have registered all the names they require in their
New global domain names approved for
Proposed release of new top Presently, organisations have a limited range of top level domain names
level domain names. (e.g. ".com" and ".org") and country level domain names (e.g. ".com.au") from
which to choose. On 26 June 2008, the Internet Corporation for Assigned
Names and Number (ICANN) Board approved the recommendation of the
Generic Names Support Organisation (GNSO) to introduce new generic Top
Level Domain names (gTLDs).
The new gTLDs will consist of new and generic ASCII based top level domain
names (TLDs) as well as internationalised TLDs which will allow TLDs to be
in languages such as Arabic or Chinese.
Implication for organisations
Organisations with a strong brand The introduction of new gTLDs will allow organisations to select TLDs that
name or who are in a particular best express the nature of their businesses or that are more appropriate for their
location, industry or who wish to customers. This will be particularly useful for organisations that:
reach non-english speaking
markets should take advantage
of this opportunity.
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16. Baker & McKenzie
• have established brand names or are located in a particular geographic
area (e.g. ".pepsi" or ".sydney");
• are in a particular industry (e.g. car retailers may choose the TLD
".car" or matchmaking organisations may choose the TLD ".love"); or
• that wish to reach non-English speaking markets such as China, as
TLDs will be able to be in foreign languages.
Draft Implementation Model
The June 2008 ICANN Board meeting discussed a model outlining the process
for introducing new gTLDs (Draft Implementation Model) to be further
developed and detailed.
Third parties may object to The Draft Implementation Model had the following components:
application for certain top level
domain names. • Application Period (a period in which applicants apply for a particular
• Evaluation Processes (which involved an evaluation of the proposed
TLD and the capabilities of the applicant); and
• Delegation & Approval Process (which involved processing and
entering into of a contract with the applicant and ICANN Board
The Draft Implementation Model includes a process to enable third parties to
object to proposed TLDs. In particular, applications will be able to be objected
to on any of the following four criteria:
• string confusion;
• existing legal rights;
• morality and public order; or
• community objection (such as the interests of religious organisations,
geographically based communities and indigenous groups).
The model suggests that disputes will be handled by independent,
internationally-recognised dispute resolution providers.
The plan is for applicants to be able What's next?
to start applying for the new top
level domain names in mid 2009. The Draft Implementation Model is to be reviewed and developed further, to
enable introduction of new gTLDs on the following timeline:
For more information please contact:
July to September 2008: Policy approved. Dispute Resolution Providers
Adrian Lawrence October 2008 to June 2009: Global Communication Campaign in relation to
the introduction of new gTLDs.
+ 61 2 8922 5204
October to December 2008: Draft Request for Proposal (which provide
applications with a step by step roadmap from
application to approval) issued.
January 2009 to March 2009: Final RFP issued.
+ 61 2 8922 5280
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17. The ITC Edge, July 2008
April 2009 to June 2009: Application launch. It is expected that, during
this period, applicants may start applying for
Though we can be guided by the Draft Implementation Model, much of the
detail of the actual process for introducing new gTLDs has yet to be developed.
Privacy: Lessons from recent Case
The new Case Notes provide Each year since 2002 the Privacy Commissioner has published Case Notes
guidance on compliance and how summarising complaints relating to alleged breaches of the Privacy Act 1988
to respond to complaints and (Cth) (Act). Notably, these can include interpretations of the Act in new
requests for access. circumstances, can be illustrative of systematic issues, or can illustrate how the
Commissioner will apply the law to a particular industry or subject area.
The Commissioner has issued 18 new Case Notes this year. These Notes
provide guidance for organisations on how to comply with the Act and on how
to respond to complaints and requests for access to personal information.
New Case Notes
Interesting Case Notes recently published include:
• Request for access: A private school was asked by the subject of an
The Notes consider when an
organisation is entitled to investigation by the school to disclose personal information it held
withhold personal information, about them. The school refused to give the complainant access to
and give examples of improper information about other individuals because it was concerned that those
disclosures of personal other individuals might be the subject of reprisal. The Commissioner
information. found that the school was entitled to withhold that information on the
basis that the disclosure would have had an unreasonable impact on the
privacy of those other individuals.
• Improper disclosure: Following receipt of a claim from an insured,
who had been involved in a car accident, an insurance company
disclosed the insured's contact details to a third party who was involved
in the accident who subsequently contacted the insured to discuss the
claim. The insurance company acknowledged that it had inadvertently
disclosed the insured's contact details to the third party and resolved the
complaint by informing the insured that the third party would not
contact the insured again and by providing a written apology.
• Improper disclosure: The complainant's former spouse submitted an
application form to a government agency which included the
complainant's address. The agency inadvertently applied the spouse's
address to the complainant's records, which resulted in mail intended
for the complainant being sent to the spouse. The complainant and
spouse were involved in a legal proceeding relating to the information
that was disclosed. The agency acknowledged that it had interfered
with the complainant's privacy, apologised to the complainant, and
offered to pay part of the legal expenses that were incurred as a result
of the disclosure.
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18. Baker & McKenzie
The Notes also examine what • Giving notice when collecting information: The complainant was
information must be provided to required to provide personal information to a contractor to a
individuals when their personal government agency as a condition of entry onto premises. The
information is collected, what Commissioner agreed that the collection of the information was
steps an organisation must take integral to one of the contractor's lawful functions, but found that the
to protect information, and when contractor did not provide the individual with adequate notice of the
disclosure is permitted by law. purposes for which the information had been collected or for which it
would be used or disclosed. The contractor amended its information
collection notice to include this information.
• Security and improper disclosure: An employee of a government
agency accessed the records of a former employee of the agency, to
determine the complainant's address. The complainant alleged that
they subsequently feared for their safety and had to change their name
and address. The Commissioner found that the agency had not taken
reasonable steps to protect the complainant's personal information and
had used the complainant's personal information for a purpose other
than that for which it was collected. In response, the agency informed
the Commissioner that it had improved its security systems and
terminated the employment of the relevant employee.
• Disclosure permitted by law: Two financial institutions each reported
separate cash transactions conducted by the complainant, along with
the complainant's name, address, date of birth and occupation, to
AUSTRAC in accordance with Commonwealth legislation relating to
financial transactions reporting. One of the financial institutions
incorrectly reported the complainant's occupation. The Commissioner
found that both financial institutions were entitled to make the
disclosure to AUSTRAC because this disclosure was required to be
made by law. The financial institution which had reported incorrect
information apologised to the complainant, arranged for AUSTRAC to
correct its records, and corrected its own records.
Helpful tips on compliance
Previous Case Notes also give Case Notes published by the Commissioner demonstrate that:
helpful tips on:
• where it is feasible to do so, an organisation should monitor access to
• how the National Privacy personal information held on its computer systems where this
Principles are applied in information can be accessed by its employees, particularly in an
practice; and environment where it holds sensitive information, such as financial
• how to handle requests for information;
access to personal
information. • a document that may otherwise be subject to the "employee records
exemption" will not be subject to the exemption if it is disclosed to an
organisation's legal counsel or for another purpose that is not directly
related to the employee's employment;
• where an organisation in Australia collects personal information to
enter it into a database that is held overseas, this will constitute
collection and inclusion of that information in a record in Australia,
even if only momentarily, and the organisation must comply with its
obligations under the Act in relation to this information; and
• an organisation must comply with its obligations under the Act in
relation to personal information it holds in a record, even if the
information is otherwise publicly available.
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19. The ITC Edge, July 2008
Helpful tips on handling requests for access
Guidance from Case Notes relating to handling requests for access to personal
• the factors that are relevant to assessing whether an organisation is
entitled to refuse to provide access to a document on the basis that it
would have an unreasonable impact on the privacy of others include:
− whether the individual would expect that the information
would be disclosed to the third party;
− the extent of the impact on the individual's privacy and
whether any public interest reasons for providing access to the
information outweigh any expectation of confidentiality; and
− whether masking identity details sufficiently protects privacy;
• if a document contains personal information relating to another
individual, if feasible, the organisation should mask that information
and provide access to the masked document rather than withholding
access to the entire document;
• when determining the fees to charge, an organisation should take into
account factors such as the number of pages in the record, the method
of storage and the retrieval process involved, the cost likely to be
incurred in providing access, and the individual's capacity to pay for
For more information please contact:
• the costs of obtaining legal advice regarding an organisation's
obligations under the Act should not be passed on to an individual.
Partner Practical guidance for organisations
+ 61 2 8922 5534
firstname.lastname@example.org As well as providing practical guidance, the Case Notes also highlight that one
of the Commissioner's functions is to endeavour to resolve complaints by
conciliation and that one factor the Commissioner considers when investigating
a complaint is what steps the organisation has taken to attempt to resolve the
Senior Associate complaint. This means any conciliatory steps taken by an organisation after it
+ 61 2 8922 5427 first receives a complaint may be looked upon favourably by the Commissioner
email@example.com during the investigation process.
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20. Baker & McKenzie
Back page Bytes #8:
Representations and section 52 risk
Back page Bytes, a regular feature of The ITC Edge, gives practical reminders
and drafting tips for everyday use. This eighth edition provides practical
reminders concerning the impact of section 52 of the Trade Practices Act 1974
A broad prohibition
Section 52 of the TPA prohibits "conduct that is misleading or deceptive or is
likely to mislead or deceive".
The prohibition on misleading or
Although it is contained in Part V of the TPA (consumer protection), its
deceptive conduct applies to all
aspects of business.
application is not limited to consumer protection. The section applies to all
aspects of trade and commerce: from advertising, to the acquisition or supply
of goods or services, to the sale of a business.
In addition, section 53 of the TPA prohibits certain types of false or misleading
representations. Importantly, unlike the case with section 52, a breach of
section 53 is an offence. Prohibited representations include:
• false representations that goods or services are of a particular standard,
quality, value or grade;
• representations that goods or services have sponsorship, approval,
performance characteristics, accessories, uses or benefits they do not
• false or misleading representations with respect to the price of goods or
Where the relevant conduct is a representation as to a future matter,
section 51A deems a representation to be misleading unless the person who
made the representation had reasonable grounds for making it.
Liability for breach
A breach of sections 52 and 53 A person who suffers loss or damage by conduct in breach of section 52 or
may result in a claim for
section 53 may recover the amount of the loss or damage against the
corporation which engaged in the conduct, or against any person involved in
the contravention. Causation is essential to a claim for damages under
section 82. There must be a nexus between the relevant conduct and the loss or
In addition, a breach of section 53 may give rise to fines of up to AUD1,100,000.
What will amount to a breach?
Whether conduct is misleading or deceptive will depend on the particular
circumstances in each case and the context in which the conduct occurred.
Bear in mind that:
• Target audience: The relevant conduct must be assessed with regard
to its effect on reasonable members of the relevant section of the
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21. The ITC Edge, July 2008
public. The fact that a person has actually formed an erroneous
conclusion based on the conduct is not conclusive that conduct is
misleading or deceptive;
• Silence: Silence may amount to misleading or deceptive conduct,
although the courts are generally careful not to impose obligations
contrary to ordinary commercial expectations; and
• Confusion: The fact that conduct causes confusion will not mean the
conduct is misleading or deceptive. There must be a greater level of
error than mere confusion.
The following factors are not required for conduct to be misleading or
A corporation may breach section
• Intent: Whether a corporation intended to mislead or deceive or took
52 even when it did not intend to
mislead or deceive. reasonable care is irrelevant. A corporation which has acted honestly
and reasonably may still be in breach; and
• Actual erroneous conclusion: Whether anyone was actually misled or
deceived is irrelevant to whether conduct is in breach, although it will
be relevant to an assessment of damages.
Disclaimers and exclusion clauses do not avoid the operation of section 52 if
Disclaimers will often be
there was a representation on which a person relied. If misleading or deceptive
conduct has induced a party to enter into a contract, the fact that the contract
contradicts the conduct will not negate the inducement. Whether a particular
provision or disclaimer negates the misleading nature of the relevant conduct is
a question of fact. However, boilerplate disclaimers are most unlikely to have
Misleading conduct can be qualified or corrected, but for a qualification or
correction to be effective it must be contemporaneous, sufficient and
Processes can be designed to Contract negotiation and management processes should be designed to
minimise the risk of breach.
minimise the risk of breaching section 52. This should include requiring those
involved in the contracting process to:
For more information please contact: • clearly identify and record key representations made;
• draw the other party's attention to superseded, modified or corrected
Partner • ensure that the other party confirms in writing exactly what it has relied
+ 61 2 8922 5167 upon in entering into the relevant arrangement (and that nothing else
firstname.lastname@example.org has been relied upon); and
• employ other techniques to ensure that contracting parties do not rely
on conduct (such as requiring other parties to make their own inquiries
Sarah Connell and carry out appropriate due diligence).
+ 61 2 8922 5529
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22. Baker & McKenzie
Baker & McKenzie’s Australian information technology and
Feedback communications practice provides complex ITC transactions,
Our editors welcome your feedback and ecommerce, outsourcing, telecommunications and media advice,
questions. working closely with our 14 offices in Asia and 70 offices internationally.
61 2 8922 5167
+61 2 8922 5272
This publication has been prepared for the general information of clients and professional associates of Baker & McKenzie. You should not rely on the contents.
It is not legal advice and should not be regarded as a substitute for legal advice. To the fullest extent allowed by law, Baker & McKenzie excludes all liability
(whether arising in contract, for negligence or otherwise) in respect of all and each part of this document, including without limitation, any errors or omissions.
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©2008 Baker & McKenzie
All rights reserved.
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