Passing Off and
Misleading or Deceptive Conduct On Line – Old dog, new tricks.
Introduction.
Misleading and deceptive conduct in the course of trade is
as old as commerce itself. But new technologies open up new opportunities for
skulduggery.
The advent of the digital economy is a case in point. On
one level, on-line advertising can be as misleading or deceptive as any other
kind of conduct. But the way in which search engines work can also be gamed and
this has permitted novel modes of misleading and deceptive conduct.
This paper will look at manifestations of misleading or
deceptive conduct (including passing off) on-line. The principal areas of law
that will be discussed are s18 of the Australian
Consumer Law (ACL) and related
provisions; the Trade Marks Act; and
the tort of passing off. The On Line
Infringement Act will receive an honourable mention. We wilt hen look at
how the law applies to actual situation of online misconduct.
How Search Engines
Work
All search engines – Google, Yahoo etc – combine search,
indexing and retrieval functions. “Web crawlers” comb the internet and record
the details of webpages and save them to dedicated data storage. The saved
webpages are automatically indexed. When you enter a search query the search
engine applies an algorithm – a mathematical kind of check list - to identify
the web pages that are most relevant to your query.
The High Court summarised it nicely in ACCC v. Google [2013
HCA 1]:
18.
The internet is a global network of networks of
computers. Computers connected to the internet communicate with each other –
requesting and receiving data – by means of a common language, the Internet
Protocol.. The World Wide Web is a vast system of interlinked documents
("web pages") which can be accessed by computers connected to the
internet. Each web page has a unique address, or URL[. An internet user who wishes to access a web page
at a known address can access that web page by entering the address into the
web browser on his or her computer.
19.
An internet user who wishes to access a web page
but does not know its address, or wishes to locate a selection of web pages
relevant to a particular topic, is likely to use an internet search engine,
like the Google search engine, in much the same way that a person who does not
know the telephone number of a particular business, or wishes to contact a
local provider of a particular product or service, might once have been likely
to use a telephone directory.
20.
The Google search engine allows internet users
to search for web pages by entering search terms into a search field and
clicking on a button marked "Google Search" ("the search
button"). Google keeps and constantly updates an index of billions of web
pages which enables it to respond to users' search requests. Google does not
control the search terms entered by users of the Google search engine, or the
material available on the internet.
21.
During the period relevant to these proceedings,
if a user of the Google search engine entered search terms into the search
field and clicked on the search button, the Google search engine would display
two types of search results: "organic search results" and
"sponsored links".
22.
Organic search results are links to web pages,
which are ranked in order of relevance to the search terms entered by the user.
The Google search engine always displays organic search results, and organic
search results are always displayed free of charge. Google does not sell
placement in its organic search results. Instead, the order of relevance of
organic search results is determined by a complex proprietary algorithm
developed by Google which is a function of many factors, including the content
of each web page which Google has indexed, and the number and type of links
between each of those web pages.
23.
As mentioned above, a sponsored link is a form
of advertisement. Each sponsored link is created by, or at the direction of, an
advertiser who typically pays Google each time a user of the Google search
engine clicks on the sponsored link. Not all search terms entered into the Google
search engine result in the display of sponsored links. When the Google search
engine does display sponsored links, they are listed separately from organic
search results. They appear either above the organic search results in a shaded
box marked "Sponsored Links" ("top left sponsored links"),
or to the far right of the organic search results in a box marked
"Sponsored Links" ("right side sponsored links"). Whether
the Google search engine displays sponsored links, and the order and position
in which such links appear if they are displayed, is not determined by the
algorithm which determines the order of relevance of organic search results,
but by the AdWords program….
Search Engine
Optimisation
Essentially this involves designing a website so it will be
ranked highly by the search engine algorithm on a relevant search.
There is an ongoing battle between search engine providers
and Search Engine Optimisers. The Googles of the world do not want anyone else
gaming their algorithm. This is partly to preserve the integrity of the service
they provide but also so as to preserve the attractiveness of their Adword
offering (see below).
But it will always be possible to manipulate search engine
results by anticipating the variables they utilise to rank web pages.
Keywords and Adwords
A keyword in this context is a search query term. One (but
only one) of the variables which search engines use to rank results is the
frequency with which the key word appears in indexed web pages.
“Adwords” is a Google proprietary term and refers to a
keyword which an advertiser can buy so that their link will appear as a
“sponsored link”on the first page of any search using that keyword.
Potential Misuse
A lot of energy goes into search engine optimisation whereby
an advertiser’s site is designed to rank highly in organic search results.
Techniques include “keyword stuffing” and “link spam”. Search engine providers
will tell you these techniques do not work “anymore” but that seems
questionable based on the case law.
Examples of potential misuse include:
1. Piggy Backing – buying a keyword –
often a trade mark – that belongs to another trader but linking it to your own
web page. When the searcher enters that key word they will see a sponsored
advertisement linking to the web site of the person who paid for the keyword.
The keyword need not be identical to the yrade mark of the rival trader; one
kind of misuse in this context is called “typo squatting”.
2. Search Engine Optimisation – incorporating
a rival trader’s trade mark or name (or something similar) into your website so
as to appear in the organic search results that use that name. As we will see this is not
necessarily actionable misconduct.
3. Domain Squatting – registering a domain
name that incorporates a trade mark with established goodwill in the
expectation that you will be paid to transfer it.
4. Pirate Sites.
If you search the name of a
product you will often be taken to a website selling (or permitting a free
download or streaming if the product is digital) of counterfeit or unauthorised
versions of that product. Examples include Ali baba, Coke & Popcorn, Pirate
bay.That website appears in the search because it uses the trade mark of the
product in question, usually without permission.
So what can your client do about
it?
The Competition and
Consumer Act 2010 (Cth) Schedule 2 The Australian Consumer Law s18.
The old s52 of the TPA is now s18 of the ACL. It would be
hard to exaggerate the usefulness of this provision. It has had a massive (and
perhaps originally, unintended) impact on commercial litigation by virtue of
its ability to override contractual provisions and exclusion clauses – subject
always to proof of reliance. In this area its impact has been curtailed somewhat
by judicial reluctance to accept that arm’s length commercial actors rely on
anything except what is in the contract.
But its role in consumer protection and by extension the
protection of intellectual property remains undiminished. It is often pleaded
in parallel with other causes of action in copyright, trade mark and passing
off because of its generous standing rules and flexible remedies. For example,
a subsidiary or distributor of a foreign corporation can invoke s18 in
circumstances where the foreign corporation lacks standing or would be subject
to a disadvantageous security for costs order.
(1)A person must not,
in trade or commerce, engage in conduct that is misleading or deceptive or is
likely to mislead or deceive.
Section 4 effectively reverses
the onus of proof in relation to representations as to future matters; such
representations are deemed to be misleading or deceptive unless the representor
had reasonable grounds for making the representation.
A contravention of s18 may
result in a fine under ACL chapter 4; an injunction (s 232) ; a publication
order( ss 246 -247); damages (s 2360; or remedial orders (ss 237 – 241, 248).
Section 18 does not however
apply to representations made by an “information provider” in the course of
business other than in an advertisement or information that publicises goods
and services provided by the information provider, its related corporation or
pursuant to an agreement with a provider of goods and services (eg advertorial)
or the sale of land see s19 ACL. An information provider is a person who carries on a business of
providing information (s19(5) ACL). This is an important provision not just
for media outlets but also for search engine providers who, as anyone knows who
has done an internet search, publish vast quantities of inaccurate information
on a daily basis..
Section 209 ACL also provides
a defence for information providers who publish misleading or deceptive
material without reason to suspect it is infringing.
Trade
Marks Act (1996) Cth.
Registration of a trade mark
bestows a monopoly in relation to use of that mark in the course of trade to
denote the goods or services in respect of which the mark is registered. If a
rival trader uses the registered mark without permission or a mark
“substantially identical or deceptively similar” to the registered mark then
the owner of the mark can restrain that use by injunction and recover damages
or account of profit (s126 (1)). Proving loss has however always been problematic
in trade mark cases given the need to prove profit lost based on lost sales.
This is problematic because it can be very difficult to know how many sales
were in fact lost; usually the best that can be done is to identify how many
sales were made by the infringer and ask the court to infer loss by multiplying
that number by the applicant’s profit per unit. There is no equivalent to the
“licence fee test” in Trade Mark law.
The Trade Marks Act however (since
2013) also permits ‘additional” damages in certain circumstances.
S126
(2) A court may include an additional amount in an assessment of damages for an
infringement of a registered trade mark, if the court considers it appropriate
to do so having regard to:
(a)the
flagrancy of the infringement; and
(b)
the need to deter similar infringements of registered trade marks; and
(c) the conduct of the party that
infringed the registered trade mark that occurred:
(i)after the act constituting the
infringement; or
(ii)after that party was informed that it had allegedly infringed the
registered trade mark; and
(d)any
benefit shown to have accrued to that party because of the infringement; and
(e)all other relevant matters.
It can be confidently
anticipated that this provision will be applied in a similar manner to s115(40
of the Copyright Act and so as to deliver specific and general deterrence. In Halal Certification
Authority Pty Ltd v Scadilone Pty Ltd.
The court awarded additional damages of $91,000 even though actual loss was
nominal. In Vertical Leisure
Limited & Anor v Skyrunner Pty Ltd & Anor [2014] FCCA 2033), the
Federal Circuit Court awarded $300,000 in additional damages; compensatory
damages were $44,000.
Directors may be personally
liable as joint tort feasors but there is no equivalent to the authorisation
concept in Copyright law. The availability of additional damages is a
relatively recent change [2010] and should be applied as under the Copyright
Act.
The beauty of a registered
trade mark is that it can be used without proof of reputation or damage. Now
that the Federal circuit court has jurisdiction in trade mark matters
enforcement can be relatively cost effective.
Passing
Off
The
classic definition of passing off is the appropriating the goodwill of a rival
trader. In the Advocaat case Erven Warnink Besloten Vennootschop v J. Townend and Sons
(Hull) Ltd (1979) AC 731 Lord Diplock held (at
741-2):
My Lords, A.G. Spalding
and Bros v A.W. Gamage Ltd and the later cases make it possible to identify
five characteristics which must be present in order to create a valid cause of
action for passing off: (1) a misrepresentation
(2) made by a trader in the course of trade,
(2) made by a trader in the course of trade,
(3) to prospective
customers of his or ultimate consumers of goods or services supplied by him,
(4) which is calculated to injure the business or goodwill of another trader (in the sense that this is a reasonably foreseeable consequence) and
(4) which is calculated to injure the business or goodwill of another trader (in the sense that this is a reasonably foreseeable consequence) and
(5) which causes actual
damage to a business or goodwill of a trader by whom the action is brought or
(in a quia timet action) will probably do so." [citation]
In this sense ‘goodwill’ means reputation (not the amount
someone would pay for the anticipated future profit of a businesss).
To have standing to bring an action in passing off you need
to prove reputation in the jurisdiction and the real likelihood of damage by
loss of sales. In Con Agra v McCain
(1992) 23 IPR 193, the Full Federal Court held:
(1992) 23 IPR 193, the Full Federal Court held:
.
121.
I am of the opinion that it is not necessary
in Australia that a plaintiff, in order to maintain a passing off action, must
have a place of business or a business presence in Australia; nor is it
necessary that his goods are sold here. It is sufficient if his goods have a
reputation in this country among persons here, whether residents or otherwise,
of a sufficient degree to establish that there is a likelihood of deception
among consumers and potential consumers and of damage to his reputation.
If at all possible one avoids it passing off. But if your
client has an unregistered trade mark it becomes relevant.
Actual cases – Piggy
backing
In the Federal Court decision of Nicholas J in Australian Competition and Consumer
Commission v Trading Post Australia Pty [2011] FCA 1086), his Honour held
that the use by Trading Post Australia Pty Limited (Trading Post) of a competitor’s name as a keyword to trigger their
own advertisement on Google searches was misleading or deceptive and in
contravention of section 52 of the Trade
Practices Act 1974 (Cth) (as it then was).
An exampleof the advertisement found to be misleading:
KlosterFord
www.tradingpost.com.au New/Used Fords – Search 90,000 + auto ads online. Great finds daily!
www.tradingpost.com.au New/Used Fords – Search 90,000 + auto ads online. Great finds daily!
J Nicholas found at [citation]:
1.
the advertisement conveyed that there was an
association or affiliation between Klosters Ford and Trading Post, where no
such association or affiliation existed;
2.
the advertisement conveyed that information
related to Klosters Ford could be found at the Trading Post website; where this
statement is contrary to fact and
3.
the advertisement conveyed that information
regarding the sale of cars by Klosters Ford could be found at the Trading Post
website, where this statement is contrary to fact.
Not surprisingly, the Trading Post did not defend the proceedings.
What is more interesting is the role of the search engine
provider in this conduct. After all, the misleading advertisement was only
available by reason of Google displaying it in response to a search for the
appropriated key word.
In overseas jurisdictions Google has paid out big money,
reputedly up to 90 million dollars in respect of the sale as Adwords of names
which are registered trademarks. [citation].
The ACCC took action against Google for this practice, lost at
first instance in the Federal court; won in the full court then lost in the
High Court.
The High Court’s majority reasoning is worth quoting extensively:
64.
The
starting point for the ACCC's arguments was that the clickable headline in each
of the sponsored links contained the name of a trader (and, in one case, the
URL of a trader) different from that of the relevant advertiser. Referring to
the keyword insertion facility, the ACCC argued that Google had inserted search
terms chosen by users of the Google search engine as headlines in the sponsored
links, and was therefore responsible for the collocation of the clickable
headline containing the name (and, in one case, the URL) of another trader and
the advertiser's URL. The ACCC also emphasised that Google had provided the
functionality of the clickable headline (that is, the ability for users of the
Google search engine to click on the headline of a sponsored link and be taken
to the advertiser's web site). In addition, the ACCC submitted that, by
displaying the sponsored links, Google had informed users of the Google search
engine that the sponsored links were responsive to the users' search requests.
65.
Google
always admitted that it published or displayed the STA Travel advertisements,
the Carsales advertisements, the Ausdog advertisement and the Trading Post
advertisement. However, Google contended that the fact that it displayed the
sponsored links in response to users' search requests was not sufficient to
justify a finding that Google had itself made the misleading representations
conveyed by the sponsored links, or otherwise engaged in misleading and
deceptive conduct.
66.
Google
emphasised that each relevant aspect of a sponsored link – the headline, the
advertising text, the advertiser's URL, the keywords and the use of keyword
insertion – was specified by the advertiser, and that Google merely implemented
the advertiser's instructions. Google submitted that the technical facilities
it provided through the AdWords program were different in kind, but not in
principle, from facilities provided to advertisers by other intermediaries such
as publishers and broadcasters. Google further contended that any commercial
association or affiliation between an advertiser and another trader was
something peculiarly within the knowledge of the advertiser, and was not a
matter within Google's expertise. Google also relied on the primary judge's
findings that ordinary and reasonable users of the Google search engine would
have understood that the sponsored links were advertisements paid for by
advertisers to promote their products and businesses, and that Google was
merely passing them on for what they were worth.
The High Court agreed with Google, finding that its
technology did no more than transmit the choices of the advertiser.
Further, though it did not have to decide the point
the High Court agreed with the first instance judge that Google was an
information provider and entitled to the protection of s209 of the ACL.
The decision does have its problems. For a start there
are plenty of examples of Google actively rejecting certain Adwords – the
process is not automated. Anything to do with sex seems to come in for scrutiny
[cite Australian sex party reporting].
In any event it is clear enough that the trader who
seeks to exploit the reputation of a rival trader in a key word by linking it
to their web page can be restrained. Damages may be difficult to prove but that
is where additional damages come in to their own.
Easy Living and Lift Shop were trade rivals in the home lift market. Easy
Living had its web site “optimised’ so that the words Lift Shop were
incorporated into it with the result that searches for that term would also
produce a result linking to Easy Living.
Lift shop alleged that the following search result infringed its
registered trade mark in “Lift Shop” and also constituted a contravention of
s18..
Easy Living Lifts | Home Elevators | Lift Shop – Home Elevators ...
www.easy-living.com.au/ ▼
At Easy Living home elevators website you will find details on all of our lifts and home elevators here, which will help you achieve the easy living you deserve.
www.easy-living.com.au/ ▼
At Easy Living home elevators website you will find details on all of our lifts and home elevators here, which will help you achieve the easy living you deserve.
The first instance judge was persuaded
that “Lift Shop” was a generic term and further that the respondents
advertisement sufficiently distinguished itself so as to avoid any breach of
s18.
The appeal case turned on whether the use
by Lift Shop’s trade rival Easy Living Lifts of the words comprising the
registered trade mark of Lift Shop was use as a trade mark or was simply
descriptive of its (easy Living’s) business.
The Full
Federal Court applied the analysis of the high Court in The Shell Company of Australia Limited v Esso Standard Oil
(Australia) Limited [1963] HCA 66; (1963) 109 CLR
407
In that case Kitto J
(at 424-425), with whom Dixon CJ and Taylor and Owen JJ agreed, said:
The crucial question in the present case seems to me to
arise at this point. Was the appellant’s use, that is to say its television
presentation, of those particular pictures of the oil drop figure which were
substantially identical with or deceptively similar to the respondent’s trade
marks a use of them “as a trade mark”? With the aid of the definition of “trade
mark” in s. 6 of the Act, the adverbial expression may be expanded so that the
question becomes whether, in the setting in which the particular pictures
referred to were presented, they would have appeared to the television viewer
as possessing the character of devices, or brands, which the appellant was
using or proposing to use in relation to petrol for the purpose of indicating,
or so as to indicate, a connexion in the course of trade between the petrol and
the appellant. Did they appear to be thrown on to the screen as being marks for
distinguishing Shell petrol from other petrol in the course of trade?
The Full Federal Court observed:
35.
At face value, the words “Lift Shop”, as a compound
expression, certainly have descriptive aspects. This does not necessarily mean,
however, that those words could not, and in context did not, also function as a
trade mark. The position is explained by the following observations of Gummow J
(when in this Court) in Johnson & Johnson [1991] FCA 310; (1991) 30 FCR 326 (at 347-348):
When the issue is one of infringement, a
pivotal question is whether the use complained of is use by the alleged
infringer as a trade mark. The answer to that question requires an
understanding of the “purpose and nature” of the impugned use: see Shell
Company of Australia Ltd v Esso Standard Oil (Australia) Ltd (the Shell case) [1963] HCA 66; (1963) 109 CLR
407 at 426, per Kitto J. As his Honour there
points out, … where the issue is one of infringing use by use of a word mark
(as in the present case), the fundamental question remains, …whether those to
whom the user is directed are being invited to purchase the goods (or services)
of the defendants which are to be distinguished from the goods of other traders
“partly because” (emphasis
supplied) they are described by the words in question.
45.
In the present case, the relevant question is whether the
words “Lift Shop”, as used by the respondent in the title of its web page,
functioned to distinguish its goods or services from those of others?
Objectively considered, the answer to that question is “no”.
46.
Those searching the internet using the search term “lift
shop” would have understood, on seeing the displayed results, and in particular
the words “Lift Shop” in the title of the respondent’s web page, that the
respondent was using those words to convey that its business was one of
supplying “lifts” and “home elevators”. Although the use of the words “Lift
Shop” was given some prominence because of their use in the title of the
respondent’s web page, neither that fact, nor the positioning of those words
within the title, imbued them with the character of a trade mark. The use of
the words “Lift Shop” as shown in the entries quoted in paragraphs [9]-[11],
makes clear that their only functional significance was to describe the
character of that business. Their use by the respondent was not to distinguish
its business from others. To the contrary, in the larger setting provided by
the results pages, the use of those words was to designate, and would have been
understood as designating, that the respondent’s business was of the same
character as, or at least of a similar character to, other businesses grouped
and operating as “lift shops”. Such use is the antithesis of trade mark use.
Domain Squatting
This is the on line version of the venerable practice of
“digging a commercial pit’ per Isaacs J in Turner
General Motors(Australia) Pty Ltd (1929) 42 CLR 352 .
In Turner v General Motors, an American manufacturer of motor
cars, which had a trade reputation in Australia, marketed them here through
agents whose operations it controlled by means of a subsidiary. The defendants
commenced to carry on business in Sydney as dealers in second hand motor cars
under names which resembled both those of the American company and its new
company.. Isaacs J. said (at 364):
But on principle the whole contention is
fallacious (that is the contention that the appellants had done nothing legally
wrong as regards the respondent). In the first place, a man who digs a pit in a
path along which he has reason to believe another man will shortly travel, does
nothing of which the man can legally complain before he comes to it. But if the
latter happens to fall into the hole and suffers injury, does the argument of
original freedom from responsibility avail the man who digs the pit? What
Ernest Samuel Turner for all the defendants in the suit did was to dig a
commercial pit in advance. If there ensued injury, or probability of injury,
there is surely a remedy.
First, what is a domain name? According to Wikipedia, a
domain name :
represents an Internet Protocol (IP) resource, such as a personal computer used to access the
Internet, a server computer hosting a web site, or the web site itself or any other service
communicated via the Internet.
Domain names are organized in subordinate levels (subdomains) of
the DNS root domain, which is nameless. The first-level
set of domain names are the top-level domains (TLDs), including the generic top-level
domains (gTLDs), such as the prominent domains com, info, net, edu, and org, and the country code
top-level domains (ccTLDs). Below these top-level domains in
the DNS hierarchy are the second-level and third-level domain names that are
typically open for reservation by end-users who wish to connect local area
networks to the Internet, create other publicly accessible Internet resources
or run web sites. The registration of these domain names is usually
administered by
domain name
registrars
who sell their services to
the public.
Because the sub level domain
names are administered nationally it is possible for the beady eyed cyber squatter
to get in first and reserve a domain name which has perceived value.
Similar practices relating to business names and trade
marks are as old as the hills, or at least as old as the Isaacs High Court.
Domain squatting also arises in disputes between overseas manufacturers
and their local distributors.
In Macquarie Bank Ltd v Seagle
[2008] FCA 1417. “macquarie’ domain names were successfully restrained because involved a false and
misleading representation that Macquarie bank was the registrant.
But in Bing! Software PtyLltd v. Bing Technologies Pty Ltd
(No.1) [2008] FCA 1760 it was found that any confusion only transient and the applicant
failed.
CSR Ltd v resource capital Australia Pty Ltd [2003]FCA 279.
The applicant succeeded re “csrsugar. Com because registration implied they
were connected to the applicant.
Mark Foys Pty Ltd v TVSN (Pacific) Ltd [200] FCA 1626.
Applicant succeeded re www.markfoys.com
notwithstanding disclaimers on website.
In Mantra Group Pty Ltd v Tailly Pty Ltd (No 2) 2010 86 IPR
19 Tailly registered numerous domain names including the words “Circle on
Cavill” which was the name of a holiday apartment complex on the Gold Coast
managed by Mantra. Mantra was the exclusive on-site letting agent. Tailly
however had the right to let a number of unitsd in the same complex. Mantra had
registered the trade mark ‘Circle on Cavill”. The Court held:
It has
been doubted whether the mere registration of a domain name containing the
words of a trade mark constitutes the use of those words as a trade mark for
the purposes of s 120 of the Trade Marks Act: see CSR Ltd v Resource Capital Australia Pty Ltd [2003] FCA 279; (2003) 128 FCR
408 (“CSR Ltd”) at [42] per Hill J and the
cases referred to. However, if the registered domain name is linked to a
website that contains advertising material that promotes goods or services in
relation to which the trade mark is registered, this combination of use could
constitute use as a trade mark under s 120 of the Trade Marks Act. This is all the more so if the advertising
material on the website also uses the words of the trade mark to promote the
goods or services concerned. In considering whether these situations constitute
trade mark use, it will be necessary to apply the general principles set out
above to the particular circumstances: see the discussion in Shanahan at [115.1050].
... Thus, when one compares the size,
positioning and format of the descriptive use of the words “Circle on Cavill”,
with the size, positioning and format of the banner heading use of those words,
I consider that a member of the public, taking an objective view of the matter,
would conclude that the primary, or most significant use of those words is as a
badge or emblem to indicate that Tailly is the origin of the accommodation
letting services at Circle on Cavill.
In the case of domain names there is an
alternative dispute resolution procedure administered by Au Domain
Administration Pty Ltd and called auDRP. An application is made to Resolution
institute or WIPO for appointment of an adjudication panel (usually comprised
of lawyers with expertise in IP). The process requires the consent of both
parties and if that is obtained is binding. The
grounds for complaint and procedural rules are set out in the .au Dispute Resolution
Policy (auDRP) (2010-05).
Critically, the policy provides
that if the party who registered the name is not in fact carrying on business
under it they are not entitled to maintain the registration.
The decision to use alternative
dispute resolution is not however a no brainer. The Federal Circuit Court does
offer a relatively cheap and quick alternative with the great benefit that
costs will be awarded to the successful party.
Pirate Sites
Rather, I am referring to sites
which offer ostensibly legal products for download or sale which in fact are
counterfeit or unauthorised.
Such sites may be hosted on a
legitimate platform such as eBay or may have their own site such as Ali Baba or
Pirate Bay.
If those sites are offering
counterfeit goods or unauthorised copies of copyright material they can be
attacked by obtaining evidence of the iinfringement through a test purchase and
then bringing proceedings for infringement of copyright, trade mark s18 and
passing off as appropriate. The appearance of the Microsoft registered mark on
an unauthorised software download is an infringement of the Trademarks Act,
just as is the affixation of a Chanel trade mark on a counterfeit bag.
The On Line Infringement Act came into effect last year and has yet to
be the subject of judicial pronouncement.
It will however provide a means
of blocking pirate sites located outside the jurisdiction in places where court
action is not a viable form of enforcement.
To take advantage of the Act, a copyright owner needs to
have evidence of three basic facts:
i)
an “online location outside Australia”;
ii)
which has the
primary purpose of infringing or facilitating infringement of copyright;
iii)
the “carriage service provider” (essentially an
ISP) which provides access to the online location in question.
The new section 115A (5) provides factors to be taken into
account by the Court in determining whether to grant the injunction:
(a)
flagrancy of the
infringement, or the flagrancy of the
facilitation of the infringement, as the referred to in paragraph
(1)(c);
(b)
whether the online
location makes available or contains directories, indexes or categories of the
means to infringe, or facilitate an infringement of, copyright
(c) whether the owner or operator of the online location demonstrates
a disregard for copyright generally;
(d) whether access to the online location has been disabled
by orders from any court of another country or territory on the ground of
or related to copyright infringement;
(e) whether disabling access to the online location is a proportionate
response in the circumstances;
(f) the impact on any
person, or class of persons, likely to be affected by the grant of the
injunction;
(g) whether it is in
the public interest to disable access to the online location;
(h) whether the owner of the copyright complied with
subsection (4)
(i)any other remedies available under this Act;
(j) any other matter
prescribed by the regulations;
(k)any other relevant
matter.
