Australia's Response to the Agreement on Trade-Related Aspects of Intellectual Property Rights

Australia’s Response to the Agreement on Trade-Related Aspects of

Intellectual Property Rights

Peter KNIGHT*

The Trade-Related Aspects of Intellectual Property &ghts (TRIPS) Agreement was entered into and annexed to the Marrakesh Agreement Establishing the World Trade Organization at Marrakesh on 15 April 1994, as part of the General Agreement on Tarif& and Trade (GATT), with the intention expressed in the Recitals:

“ ... to reduce distortions and impediments to international trade, and taking into account the need to promote effective and adequate protection of intellectual property rights, and to ensure that measures and procedures to enforce intellectual property rights do not themselves become barriers to legitimate trade.”

Article 7 provides that: “. . . protection and enforcement of intellectual property rights should contribute to the promotion of technological innovation and to the transfer and dissemination of technology, to the mutual advantage of producers and users of technological knowledge and in a manner conducive to social and economic welfare, and to a balance of rights and obligations.”

Before entry into the TRIPS Agreement, and subsequent to it, Austraha has been engaged for some time in additions and modfications to its canon of industrial property legislation, in order to comply with the requirements of the TRIPS Agreement.

Ths article will review Australia’s intellectual property laws against the Articles of the TRIPS Agreement, other than Part 111, Section 5 (Criminal Procedures),’ Part v (Dispute Prevention and Settlement), Part VI (Transitional Arrangements) and Part VII

(Institutional Arrangements), which are largely concerned with arrangements between Members of the World Trade Organization (WTO) and transitional provisions. In

* Clayton Utz, Sydney, Australia. Australian iegislation complies with these requirements, but they play a very small part in intellectual

property law practice-largely because of the knowledge requirements to be established in any criminal prosecution, and the procedural limitations and requirement of proof beyond all reasonable doubt, which hamper any prosecution.

222 THE JOURNAL O F WORLD INTELLECTUAL PROPERTY

particular, the article wdl focus on Part 11 (Standards Concerning the Avadabihty, Scope and Use of Intellectual Property Rights), comprising Articles 9 to 40.

PART I: GENERAL PROVISIONS AND BASIC PRINCIPLES

The Australian Designs Act 1906, Trade Marks Act 1955, Copyright Act 1968, Trade Practices Act 1974, Plant Varieties Act 1987, Circuit Layouts Act 1989 and Patents Act 1990 are all Federal statutes, enacted under a specific power of the Australian Constitution. There are no significant State statutes relevant to this area.

The Designs Act 1906, Trade Marks Act 1955 and Patents Act 1990 provide for registration procedures, with reasonable formalities, consistent with the requirements of the Patent Co-operation Treaty, the Paris Convention and the Trademark Law Treaty, admmistered by IP Australia (formerly the Austrahan Industrial Property Office). As such, Australian law would appear to comply with Part IV (Article 62) of the TKIPS Agreement.

In addition to the statutory law, there are “common-law” remedies, including “passing off’ and “injurious falsehood”, which are not discussed. One of the most important of these general law remedies is that provided by Australian courts in respect of confidential information, including not only trade secrets, but also business and personal information.

All these laws comply with the requirements of national treatment, as prescribed by paragraph 3 of Article 1 and Article 3 of the TRIPS Agreement, and regulations have been promulgated after entry into TRIPS to extend the protection afforded by each of the statutes to nationals of Members of the WTO.

In addition to other intellectual property treaties, Australia is a Member of:

- the Paris Convention for the Protection of Industrial Property; - the Stockholm Act of this Convention of 14 July 1967; - the International Convention for the Protection of Performers, Producers of

Phonograms and Broadcasting Organizations, adopted at Rome on 26 October 1961; and

- the Treaty on Intellectual Property in Respect of Integrated Circuits, adopted at Washington on 26 May 1989.

Austraha’s intellectual property laws were largely compliant with all requirements of these Conventions and the TRIPS Agreement, before Australia entered into the TRIPS Agreement, only minor modifications being made thereafter.

In compliance with paragraph 1 of Article 63 (Transparency), all Austrahan statutes and regulations are published and readily available, and all judgments of courts and determinations of hearings by administrative officers of IP Australia are published.

AUSTRALIA’S RESPONSE TO THE TRIPS AGREEMENT 223

PART 11: STANDARDS CONCERNING THE AVAILABILITY, SCOPE AND USE OF

INTELLECTUAL PROPERTY RIGHTS

SECTION 1: Copyright and Related Rights

ARTICLE 9 (RELATION TO THE BERNE CONVENTION)

As mentioned above, Australia is a Member of the Berne Convention for the Protection of Literary and Artistic Works, includmg the Paris Act of this Convention of 24 July 1971, and, except for the “moral rights” under Articles 6bis and 14 of the Berne Convention, the Copyright Act 1968 complies with Articles 1 through 21 of the Convention.

General

It is fundamental to Anglo-Australasian copyright that it protects “expression” and not “mere ideas”. This point is well illustrated by a recent New Zealand Decision, Green v. Broadcasting Corporation of New Zealand (BcNz),’ in which the plaintiff was the author, producer and compkre of a U.K. “talent quest” television programme known as “Opportunity Knocks” fiom the early 1960s until 1978. He claimed, inter alia, that BCNZ, by broadcasting a television show of virtually identical format and delivery under the same name between 1975 and 1978, infiinged h s copyright in “scripts and dramatic format” for the show. These “scripts” consisted of a general structure or description of the sequence of events (includng use of a device called a “clapometer”!), with stock phrases for introductions and general patter (such as: “This is your show, folks, and I do mean you” and “make-your- mind-up time”), all of which were imitated in the BCNZ production. The Court concluded that the “scripts” were nothing more than a general idea or concept for a talent quest, and what there was of substance lacked sufficient unity and substance to qualify for copyright.

On the other hand, copyright protection would be useless, at least in respect of literary, dramatic, musical and artistic works, if the only conduct that amounted to infiingement were reproduction of the entire work, or slavish translation were required.

For this reason, the test of infringement is one of quality, not quantity. Whether there has been reproduction will depend upon whether the alleged infiinger has taken a “substantial” part of the original (Section l.l(l))-bearing in mind that what is worth copying is more than likely “substantial”. A small fiaction of the original may be “substantial” in appropriate cases. For example, in Hawkes G Son (London) Ltd. v. Paramount Film Service Ltd.,3 a newsreel in which only part of the song

(1989) 16 IPR 1. 119341 Ch 593 (CA).

224 T H E JOURNAL OF WOKLL) INTELLECTUAL PROPERTY

“Colonel Bogey” played by a school band was heard, was found to infringe the copyright in the original music.

Furthermore, what constitutes the “expression” of a work is not restricted to its literal or graphical content. There are numerous cases of alleged misappropriation of screenplays, music and poetry in other forms, including parodies. For example, in Elanco Products Ltd. v. Mandops (Agrochemicals Specialists) L t ~ i . , ~ the copyright in written material on packaging was found to have been infiinged by the written material on the packaging of a competing product which did not copy the precise wordmg of the original. In Twentieth Century Fox Film Corporation v. Anglo- Amalgamated Film Distributors L L ~ . , ~ the copyright in a famous film poster was found to have been infiinged by the poster for another film in whch the characters were substituted in the same poses as those in the original.

It should be noted, however, that these concepts in Anglo-Australasian law are conveyed by the copyright owner’s exclusive right of “reproduction” of his literary, dramatic, musical or artistic work (and, to a lesser extent, the right of “adaptation” in respect of literary, dramatic and musical works). For “subject-matter other than works”, namely film, sound recordlngs, broadcasts and page layouts (referred to as “published editions”), the relevant exclusive right of the copyright owner is to “copy” the material, and this conveys the notion of an exact copy, or talung of the original material, not an interpretation of it.

Moral Rights

Article 6bis of the Berne Convention provides that, in addition to the author’s economic rights, and even after the transfer of such rights, the author, or his or her estate, shall retain for the duration of the copyright in the work the rights to claim authorship of his or her work and to object to any dlstortion, mutilation or modification of, or other derogatory action in relation to, such work which would be prejudicial to his or her honour or reputation. How a Member nation protects these rights is a matter entirely for national law. Australia’s present implementation of these moral rights is to be found in Sections 189-195AA of the Copyright Act but, on any readmg of these provisions, they do not comply. Under present Australian law, “moral rights” are limited to authors of literary, dramatic, musical and artistic works. These rights are limited to a negative right to prevent a work being exploited in various ways under a dfferent name fiom that of the author, or to prevent such exploitation as the unaltered work of the author when this is not the case. The alteration required for breach of this provision must be “a material alteration which might affect the credit and reputation” of the artist.6 The exploitation of the author’s

[1980] RPC 23; [1979] FSR 46.

See Carlton Illustrators v. Coleman G. Co. Ltd., [1911] 1 KB 771 ’ (1965) 109 SJ 107.


work without his or her name may not constitute a representation, express or implied, the work is the unaltered work of the a ~ t h o r . ~ This is not the positive right to assert attribution which appears to be contemplated by Article 6bis.

However, although Australia may not have complied with its obligations under the Berne Convention, Article 9 of the TRIPS Agreement excepts Article 6bis of the Berne Convention from the obligations of the TRIPS Agreement.

Article 14ter of the Berne Convention also provides for a droit de suite. Under this right, the author, or his or her estate, enjoys the inahenable right to “an interest in any sale of” an original work of art or original manuscript subsequent to the first transfer by the author. Austraha has not implemented this right into national legislation either, but the Berne Convention leaves this entirely to the discretion of the Member, and hence Austraha is not in breach.

Reform of the Australian provisions, including their extension to film and sound recordings, has been proposed-although with the curious restriction that they shall not apply to the authors of computer programs-a restriction which would surely be contrary to the stated objectives of the TRIPS Agreement in respect of the fostering of technology.

ARTICLE 10 (COMPUTER PROGRAMS AND COMPILATIONS OF DATA)

In 1984, the Copyright Act was amended by the Copyright Amendment Act 1984 expressly to extend copyright protection to computer programs. Amongst other things, the amendments widened the definition in Section 10 in respect of “literary work” to include a “computer program or compilation of computer programs”, and to add a definition of “computer program” as follows:

“... an expression, in any language, code or notation, of a set of instructions (whether with or without related information) intended, either directly or after either or both of the following: (a) conversion to another language, code or notation; (b) reproduction in a different material form; to cause a device having digital information processing capabilities to perform a particular function.”

and an amendment to the definition of “adaptation” to add the following: “@a) in relation to a literary work being a computer program- version of the work (whether or not in the language, code or notation in which the work was originally expressed) not being a reproduction of the work.”

See Preston v. Raphael Tuck G. Sons Ltd., [1926] 1 Ch 667.

226 T H E JOURNAL O F WORLD INTELLECTUAL PROPERTY

Compilations

The definition of “literary work” in Section 10 of the Copyright Act includes “compilations”, that is collections of pre-existing material. So, for example, a catalogue of advertisements is subject to a copyright separate from the copyright in each of the advertisements included,8 and in such cases, the author and owner of the copyright is the person who undertakes the process of selection and arrangement whch gives the compilation its distinctive appearance. The ownershp of the copyright in the compilation does not in any way detract from the rights of the creators of the individual components used to make up the compilation; an udcensed copying of a page of catalogue, for example, would infringe the separate copyrights of both the owner of the compilation copyright and the copyright in the indwidual component.

Copyright has been found to subsist in many collections of data, no item of which enjoys copyright, such as lists and directories, such as the lists of meaningless words and codes found to enjoy copyright protection in DP Anderson G Co. Ltd. v. The Lieber Code C O . ~ and Ager v. Collirgridge,lo but on the other hand, the mere effort of collection alone may not be sufficient in the absence of an intellectual process of selection and arrangement. For example, in A-One Accessory Imports Pty Ltd. v. 08 Road Imports Pty Ltd. G Others,” the so-called “compilation copyright” was held to subsist in a catalogue of spare parts for motorcycles, even though material in the catalogue had been copied from an earlier catalogue of a third party. The Court found that A-One had expended slull, judgment and effort in making additions to, and deletions Gom, the earlier catalogue, thus making a new compilation which was up-to-date and complete.

ARTICLE 11 (RENTAL RIGHTS)

There were no provisions in the Copyright Act expressly providing for rental rights until the Copyright (World Trade Organization Amendments) Act 1994 was assented to on 13 December 1994, in response to the entry by Australia into the TRIPS Agreement. The commencement of the rental rights provisions was, however, deferred until 1 January 1996.

The amending legislation introduced a new Section 30A which provides a definition of “commercial rental arrangement” in relation to sound recordings, works reproduced in sound recordings and computer programs. Such an arrangement has the following features:

* ’ [1917] 2 KE3 469. ’* (1886) 2 TLR 291. l i (1996) AIPC 91-222.

Maple G Co. v. junior Army and Navy Stores, (1882) 21 Ch D 369; 47 LT 589; 52 LJ Ch 67

AUSTRALIA‘S RESPONSE TO THE TRIPS AGREEMENT 227

(a) however the arrangement is expressed, it is in substance an arrangement under which a copy of the sound recordmg or computer program is made available by a person on terms that it will or may be returned to the person;

(b) the arrangement is made in the course of the conduct of a business; (c) the arrangement provides for the copy to be made avadable:

(i) for payment in money or money’s worth; or (ii) as part of the provision of a service for whlch payment in money or

money’s worth is to be made.

Pursuant to Section 30A(2), a commercial rental arrangement may be constituted by a transaction by which the sound recording or reproduction of a computer program is rented either for its own sake or as part of services rendered for money or money’s worth, as part of a business, on the basis that the recording or reproduction of a computer program wdl or may be returned. The right does not extend, therefore, to arrangements under which ownership of the sound recording or reproduction will be transferred to the hirer. The rental right does not include non-profit lending arrangements, such as those existing in public libraries.

Thus the rental right appears to extend not only to dealings with sound recordings and computer programs in a physical embodiment, but also to the licensing of the sound recording or computer program. However, in such transactions in respect of computer programs, it is not always clear that the licensor intends that the copy of the program supplied will be returned. The rental right may not extend to the electronic supply of a sound recording or computer program, for example by means of the Internet, because again the supplier cannot intend that the copy supplied be returned, as there is no practical way of doing so.

By the same legislation, the exclusive rights of the copyright owner listed in Section 31 are expanded to include entry into a commercial rental arrangement in respect of computer programs and literary, dramatic or musical works reproduced in a sound recording. The rights listed in Section 85 are similarly extended to include a commercial rental arrangement in respect of a sound recording.

Perhaps in order to give effect to the exception in respect of those transactions “where the program itself is not the essential object of the rental” permitted by Article 11, Sub-sections 31(3) and (5) exclude from the right in respect of computer programs commercial rental arrangements with any machine or device in which the program is embodied but cannot be copied in “the ordinary use of the machme or device” or if the computer program is not “the essential object of the rental”. Section 31(4) excludes from “machine or device” storage medla, such as floppy &sks, CD-ROM and integrated circuits.

These provisions presumably are intended to exclude from the operation of the rental right articles which include “firmware”, that is computer programs embodied in integrated circuits, or “silicon chips”, which control the works of the article. However, they result in uncertainty concerning a great deal of equipment, including

228 THE JOURNAL OF WORLD INTELLECTUAL PROPERTY

most computer hardware, in which such firmware is the most important working component, or on which software is pre-loaded on a hard drive, as it is not clear what “ordinary use” or “essential purpose” may mean.

Furthermore, such restrictions are unreasonably restrictive in respect of computer programs, and as such are inconsistent with the objectives of the TRIPS Agreement, by discriminating against technological innovation. Many computer programs are stored and supplied in the manner described, such as computer games and rented computers which have had operating systems and software pre-loaded, and unauthorized rental of these articles should be regarded as a breach of the rental right.

No rental right has been introduced in respect of cinematograph films, as this is permitted under Article 11. If another Member were to take exception to this because it believed that there was widespread copying of cinematographic works in Austraha, that Member would have to complain to the Council administering TRIPS under the WTO Agreement.

ARTICLE 12 (TERMS OF PROTECTION)

Article 12 operates to require Member States to have a minimum term of protection only in respect of terms not measured by reference to the life of the author, that is “such term shall be no less than fifty years from the end of the calendar year of authorized publication, or, failing such authorized publication within fifty years from the malung of the work, fifty years from the end of the calendar year of malung” (the requirement to comply with the Berne Convention sufficing in other cases).

In accordance with the Berne Convention, the duration of Australian copyright in most published literary, dramatic, musical or artistic works (other than photographs) is measured in terms of the life of the author (by adding fifty years), or if not published at the date of death of the author, continues until the end of a period of fifty years after the end of the year of publication.

Article 12 therefore has operation only on works, films and sound recordmgs whch are subject to “crown” copyright, photographs, ams, sound recordings, broadcasts and published ehtions. The Copyright Act provides for a dlfferent term of copyright than Article 12 in respect of these items. Under the Austrahan law, the term of copyright in each of these cases is expressed to be fifty years tiom the end of the calendar year of authorized publication-there are no default provisions dealing with material not published within fifty years from the making of the work.

However, since the Australian term must in all cases be the same or longer, the minimum standards required by the TRIPS Agreement are met by the Austrahan law

AUSTRALIA’S RESPONSE T O THE TRIPS AGREEMENT 229

ARTICLE 13 (LIMITATIONS AND EXCEPTIONS)

Australian legislators have, over some years, sought to limit the rights of Australian copyright owners to prevent the parallel importation (“grey marketing”) of copies of their works which have been made, drectly or indirectly, with their permission.

The first such limitation was in respect of books the Copyright Amendment Act 1991, which took effect fi-om 23 December 1991. These provisions were intended to have the effect of ending the exclusive importation rights of owners of copyright in books other than those “whose main content is one or more musical works”, manuals “sold with computer software for use in conjunction with that software” and periodicals (Section 44A(9)), provided such books are “non- infringing”. “Non-infi-inging book” refers to any book made (otherwise than under a statutory licence) in a country with treaty arrangements with Australia, which was not an infringement of the copyright of that country.

However, in respect of any work or published edition first published outside Australia before 23 December 1991, or first published in Austraha at any time, it is provided that importation of a non-infi-inging book remains an infringement of the copyright unless the copyright owner or the owner’s licensee or agent fails to respond to a written order from the importer in writing within seven days, advising that the book wdl be supplied within ninety days, or fails to meet the order within ninety days (Sections 44A(2), 112A(2)). It is not clear to whom the expression “owner’s licensee or agent” refers. Distributors and retaders of books are rarely, if ever, copyright owners, licensees of the copyright owner or agents of the copyright owner. It appears that the would-be importer is free to select upon whom it places its order, and indeed should select a person who is least expecting such an order. Furthermore, Sections 44A(8) and 112A(8) of the Copyright Act provide that an order will not have been met unless the copyright owner, licensee or agent has supplied all copies ordered. This provision may not be complied with if a distributor or bookseller supplies the books ordered. The importation permitted by Sections 44A(2) and 112A(2) is not in any way connected by the Section to the original order placed upon the copyright owner, or the owner’s licensee or agent, whether by time or quantity imported. Thus it is possible that the copyright owner loses its rights indefinitely under Sections 44A(2) and 112A(2). Pursuant to Sections 44A(7) and 112A(7), Sections 44A(2) and 112A(2) do not apply where a hardback version is ordered, but the copyright owner, licensee or agent is “able to supply in Australia enough copies of a paperback version of the book to fill any reasonable order”.

Putting aside the difficulties of application of these provisions, they are also plainly discriminatory against books first published outside Austraha, and hence in breach of the principles of the TRIPS Agreement. Article 6 (Exhaustion) of the TRIPS Agreement makes it clear that the Agreement does not address the exhaustion


issue. The question here is equality of treatment, but the Australian government has argued that these provisions are not in breach of Article 3 (National Treatment) in that there is no discrimination here based upon the nationahty of the copyright owner, only upon the place of first publication.

In the Circuit Layouts Act 1989, Section 24(2) provides that it is not an infringement of the copyright in a literary, dramatic, musical or artistic work to import an integrated circuit embodying the work into Australia without the permission of the copyright owner.

Further, such restrictions on the rights of certain copyright owners were imposed by the Copyright Amendment Act (No. 1) 1998, in respect of packaging, trade marks, manuals (other than software manuals) and other “information” associated with imported goods, and by the Copyright Amendment Act (No. 2) 1998, in respect of sound recorhngs. The former amendments will not take effect until 30 January 2000, whilst the latter took effect upon passage of the law on 31 July 1998.

There are no further significant exceptions to the protection of copyright other than in respect of rights of State and Federal government. The governments of the Commonwealth and the States may make use of any copyright material for the services of the Commonwealth or the State, and authorise (in writing) any other person to do so, subject to payment of reasonable compensation.

ARTICLE 14 (PROTECTION OF PERFORMERS, PRODUCERS OF PHONOGRAMS

(SOUND RECORDINGS) AND BROADCASTING ORGANIZATIONS)

As mentioned above, Australia is a party to the Rome Convention for the Protection of Performers, Producers of Phonograms and Broadcasting Organizations (1961). The provisions of Part XIA (Sections 248A to 248V) of the Copyright Act were inserted by the Copyright Amendment Act 1989, in order to hlfil Australia’s obligations under the Convention, although Australia &d not accede to the Convention until 1 July 1992.

Pevfoormers Rights

In order to comply with the requirements of the TRIPS Agreement, the Copyright (World Trade Organization Amendments) Act 1994 expanded the concept of unauthorized use of unauthorized recordings of performances-sub- Section 248QA(4) now provides:

“A person must not, at any time during the protection period of a performance: (a) sell, let for hire, or by way of trade offer or expose for sale or hire, a sound

recordmg of the performance; or

AUSTRALIA’S RESPONSE TO T H E TRIPS AGREEMENT 23 1

(b) distribute a sound recording of the performance for the purpose of trade, or for any other purpose to an extent that will affect prejudicially the financial interests of the performer or performers in the performance; or

(c) have in his or her possession a sound recording of the performance for the purpose OE

(i) selling it, letting it for hire, or by way of trade offering or exposing it for sale or hire; or

(ii) distributing it for the purpose of trade, or for any other purpose to an extent that it will d e c t prejudicially the financial interests of the performer or performers in the performance; or

(d) import a sound recording of the performance into Australia for the purpose of (i) selling it, letting it for hire, or by way of trade offering or exposing it for sale or

hire; or (ii) distributing it for the purpose of trade, or for any other purpose to an extent

that it wdl affect prejudicially the financial interests of the performer or performers in the performance;

if the person knows or ought reasonably to know that the recording is an unauthorized recording.”

Phonograms (Sound Recordings)

The Copyright Act already provided prior to the 1989 amendments that sound recordmgs as “subject-matter other than works” were subject to copyright. Such copyright belongs, in each case, in the absence of agreement, to the “maker” of the sound recording. The “maker” of a sound recordmg is deemed by Section 22(3) of the Act to be the person who owns the record, whether it be a disc, tape, paper or other medum, in which the recording is first embodied. In the case of musical recordings, this is typically the recording studio-the performers will not have any copyright in the sound recordmg-although typically independent recording stuhos commissioned by a more sophisticated organization (a record company) will vest such copyright in the record company. Presumably, this is consistent with the Rome Convention and the TRIPS Agreement. The exclusive rights of the copyright owner include the exclusive right to authorize or prohibit the reproduction (dxectly or indlrectly) of their phonograms, as well as rental, broadcast, cable diffusion and public performance, and so no amendment of the Act was required in thls regard.

Broadcasts

Similarly, the Copyright Act also already included specific provisions conferring copyright protection on broadcasts-but only broadcasts of specified organizations- licensed broadcasters under Austrahan law. Regulations made under the Copyright Act have extended the operation of the protection of broadcasts to foreign broadcasts made in countries party to the TRIPS Agreement.


Such copyright includes the exclusive rights to copying of a broadcast (which explicitly extends both to fixation and copying of such fixation), as well as re- broadcast. The present law does not extend to “communication to the public of television broadcasts” (in the Rome Convention expressed more narrowly as an exclusive right of performance to a fee-paying public-Article 13(d), subject to Article 16(b)), whether by cable hfision or performance-although there is a proposal to extend the copyright in broadcasts to cable difision in a future amendment to the Copyright Act. However, the owners of copyright in material broadcast certainly have all these rights.

Rental o f Sound Recordings

See comments on Article 11 above. There is no statutory system of licensing or remuneration of rental of sound recordings under Australian law.

Term of Protection

Under the Rome Convention, the minimum period of protection of these rights was twenty years from the end of the year of fixation. Prior to 1 July 1995, the term of protection for sound recordings and broadcasts under the Copyright Act was already fifty years from the year of publication, but performers rights were restricted to the twenty-year period permitted by the Rome Convention. In order to comply with the requirements of the TRIPS Agreement, the Copyright (World Trade Organization Amendments) Act 1994 extended the “protection period” in respect of performers rights h-om twenty to fifty years from the end of the year of the performance, effective in respect of inh-inging conduct of any person after 1 July 1995.

Conditions permitted by the Rome Convention

Article 12 of the Rome Convention permits that, notwithstanding the rights of performers recorded and owners of the copyright in a sound recording, a phonogram may be published for commercial purposes, or a reproduction of such phonogram may be used directly for broadcasting or other communication to the public, subject to payment of a single equitable remuneration to the performers, or the producers of the phonogram, or both. Australian law does permit for the exercise of such rights in such circumstances, subject to a licence fee agreed or determined by the Copyright Tribunal.

Article 15 of the Rome Convention also permits State legislation to provide for fair-dealing exceptions. These are reflected in the fair-deahng provisions in Division 6 of Part IV and the new Part v(A), inserted by the Copyright Amendment Act 1989,


whch permits copying of works and subject-matter other than works by educational institutions in certain circumstances, and in respect of performers’ protection provisions concerning “exempt recordings”, includmg indirect recording for private or domestic use, and educational and scientific research purposes.

SECTION 2: Trade Marks

ARTICLE 15 (PROTECTABLE SUBJECT-MATTER)

The most significant outcome of the TRIPS Agreement for Australian intellectual property law has been the Trade Marks Act 1995, whch came into force on 1 January 1996, repealing both the Trade Marks Act 1955 (Commonwealth) and the Trade Marks Act 1994 (Commonwealth), the latter being passed following the TRIPS negotiations to enable Australia to enter into the WTO Agreement, although the 1994 Act never came into force.

Section 17 of the 1995 Act defines trade mark as:

“ ... a sign used, or intended to be used, to distinguish goods or services dealt with or provided in the course of trade by a person from goods or services so dealt with or provided by any other persons.”

Section 6 defines “sign” as any “letter, word, name, signature, numeral, device, brand, heading, label, ticket, aspect of packaging, shape, colour, sound or scent”. The latter five examples of “signs” (aspect of packaging, shape, colour, sound or scent) were not present in the 1955 Act and represent a significant extension. Section 6 also defines “word” as includmg “an abbreviation of a word”.

This development, which has increased the scope of registrable marks, is augmented by the scrapping of the almost incomprehensible (and much abused) distinction between Parts A and B of the Register of Trade Marks. Now, all signs which are capable of distinguishing between goods or services of dfferent suppliers must be registered by the Registrar, in the absence of hsqualifiing circumstances.

Grounds for Denial of Registration

Consistent with the Paris Convention, a mark may not be registered if it is not distinctive of the applicant for registration, is descriptive of the goods or services in respect of which registration is sought, or is deceptively similar to a mark registered in respect of similar goods or services with an earlier priority date, or is deceptive.

Application on an “Intent to Use” Basis

There is no requirement for use of a mark prior to application, provided there is a genuine intention to use the mark, or as a condition of registration, except that


where IP Australia is not satisfied that a mark the subject of an application is distinctive, it may require proof of distinctiveness acquired through extensive use, as permitted by Article 15(1) and (3).

Goods and services

Austraha uses the Nice classification system, and there is no restriction with respect to the goods or services which may be the subject of an application for registration of a mark.

Publication and Opposition of Applications: Cancellation

The Trade Marks Act 1995 and the Trade Marks Regulations provide for advertisement of acceptance of an application for registration, which may then be opposed. Application may be made subsequent to registration for cancellation, either to the Registrar or to the Supreme Court of a State or Territory, or to the Federal Court.

ARTICLE 16 (KIGHTS CONFEKKED)

Prior to the coming into effect of the 1995 Act, the rights of a registered proprietor of a trade mark were inhinged by use of a registered mark, or a mark deceptively similar, only in relation to the same goods or services as those in respect of which the mark is registered. As a consequence of new provisions introduced by the 1995 Act, it is now also an inhingement of a registered trade mark to use the mark in respect of sirmlar goods or services, not just goods expressly within the specification, as under the 1955 Act. However, where infringement is alleged in respect of similar goods or services a defence is available that the use complained of was not deceptive in fact.

The 1995 Act also retains defences which were present in the prior legislation which relate to use by a person of a mark from a date prior to the priority date of the registered trade mark, and honest concurrent use.

“ Well-Known” Mark

It is debatable whether Australian law complied with the requirements of the Paris Convention with respect to well-known marks prior to the coming into force of the 1995 Act.

Article 6bis(l) of the Paris Convention provides: “The countries of the Union undertake, ex o ~ c i o if their legislation so permits, or at the request of an interested party, to refuse or to cancel the registration, and to prohibit the

AUSTRALlA’S RESPONSE TO THE TRIPS AGREEMENT 235

use of a trade mark which constitutes a reproduction, an imitation, or a translation, liable to create confusion, of a mark considered by the competent authority of the country of registration or use to be well known in that country as being already the mark of a person entitled to the benefits of this Convention and used for identical or similar goods. These provisions shall also apply when the essential part of the mark constitutes a reproduction of any such well-known mark or an imitation liable to create confusion therewith.” (emphasis added).

This provision does not express itself to be limited to “well-known” marks which are registered.

The Australian Government has taken the view that its obligations were met by the right of the Registrar of Trade Marks to refkse registration of marks which would be deceptive, as well as the general law of “passing off’ augmented by the provisions of Part v, Division 1 of the Trade Practices Act 1974, in particular Sections 52 and 53 which prohibit misleadmg or deceptive conduct generally, as well as false representations in respect of a number of matters, including origin, sponsorship, approval or other connections in the course of trade between goods or services, or their suppliers-although these are more obviously directed to compliance with Article 10bis of the Convention.

The 1995 Act takes a further step towards compliance with the Convention and the TRIPS Agreement in providing in the case of registered trade marks whch are “well known in Australia” that use of the trade mark even in respect of goods or services which are not simdar to those in respect of which they are registered is now an infi-ingement of the rights of the registered proprietor, provided that purchasers would be deceived into believing that there must be some connection between the unauthorized use and the registered proprietor, and the registered proprietor would thereby be “adversely affected”.

Exactly what quahfies as a “well-known” mark, however, remains unclear. Consistent with Article 16(2) of the TRIPS Agreement, Section 120(4) of the 1995 Act states that to establish the relevant reputation, account is to be taken of the knowledge of the trade mark in the relevant sector of the public including knowledge obtained as a result of promotion of the mark.

AKTICLE 17 (EXCEPTIONS)

Under the general law, the use of a trader’s reputation or trade mark in any form of comparative advertising, whether parodic or not, generally would not constitute passing off or a breach of the registered proprietor’s exclusive rights. In the case of the common law this would be so, as comparative advertising generally makes it abundantly clear that the advertiser’s goods or services originate with the advertiser, and not with the (registered) proprietor of the mark used in ths way.12 In

’* See Irving’s Yeast-Vife Ltd. v. Horsenail, (1934) 51 RPC 110


addition, amongst other thmgs, Section 122(1) of the 1995 Act provides that a person does not infringe a registered trade mark when the person uses a sign:

- in good faith to induzate the kmd, quahty, quantity, intended purpose, value, geographical origin, or some other characteristic, of goods or services

- in good faith to indicate the intended purpose of goods (in particular as

- for the purposes of comparative advertising (para. (d)).

It is troubling, in respect of Section 122(l)(d), that the words “in good faith” were not used, nor is the expression “comparative advertising” defined in any way, notwithstandmg the abundant jurisprudence indicating that only certain forms of comparisons made in good faith could justify such use of the proprietor’s mark, and the obvious drafting conclusions which may be drawn from their omission.

There are also some defences provided in respect of certain marks which become hstinctive of a patented invention, which may be used to designated goods or services made using such invention after the expiry of the relevant patent.

(para. (b) (i)) ;

accessories or spare parts) or services (para. (c));

ARTICLE 18 (TERM OF PROTECTION)

Under the 1995 Act, the initial registration of a trade mark is for a term of ten years commencing upon the priority date of the application. The registration may be renewed for further periods of ten years, subject to payment of renewal fees.

ARTICLE 19 (REQUIREMENT OF USE)

As under the 1955 Act, the registration of a trade mark may be cancelled, or cancelled in some of the goods or services in respect of which it is registered, if the mark has not been used for all, or those goods or services in respect of which it is registered, for a continuous period of three years expiring at least one month before the proceedmgs for cancellation are commenced.

However, in proceedings in whch it is claimed that a registered trade mark should be expunged, or certain goods or services in respect of which the mark is registered should be deleted from the registration, on the grounds of non-use for a period of three years, the 1995 Act has altered the requirement for burden of proof and this has now been reversed. Sensibly, it is now a matter for the registered proprietor to establish that the mark has been used in the relevant period.

“Authorized Use”

A further change brought about by the 1995 Act was the elimination of the “registered user” provisions of the 1955 Act, under whch only use by a licensee


registered as such under the 1995 Act was deemed to be used by the registered proprietor, for the purpose of defending a claim for cancellation of the registered trade mark on the grounds of non-use. Such registration was conditional upon satisfaction of the Registrar that the registered proprietor maintained adequate quality control of the goods or services supplied by the licensee under the licence. Under the 1995 Act, there are now provisions regarding “authorized use”, which need not be registered but which still require quahty control if the use of an authorized user is to be regarded that of the registered proprietor.

ARTICLE 20 (OTHER REQUIREMENTS)

There are no provisions of the 1995 Act which impose upon a registered proprietor any such special requirements. There is no requirement to use symbols such as “@”, “TM” or “SM”, nor are there any provisions gving rise to any benefit from using such symbols. There are also no provisions under the 1995 Act requiring identification of the registered proprietor or the maker or supplier of the goods or services supplied.

There are, of course, various labelling requirements under State and Federal legislation which do require the identification of the manufacturer or importer of certain goods, but these do not have any effect upon the capability of a trade mark to distinguish. There has been some debate, however, with respect to legislation imposing obligations upon manufacturers and importers of tobacco products to place on packaging very large labels warning consumers of the dangers of use of such products-so large as to obscure much of the packaging, in some cases.

One set of provisions under the 1955 Act to which this Article may have been addressed in part were the “associated trade-mark’’ provisions of the 1955 Act, under which a proprietor of “associated marks” was required to assign one of the associated trade marks only with a l l the others associated with it. The purpose of this was, of course, to discourage the deception of consumers by the splitting of ownership of trade marks registered in respect of dfferent goods or services. This requirement has been eliminated, but nonetheless it may still be possible to have a registered trade mark cancelled if it is not capable of distinguishing the registered proprietor as a consequence of such an assignment, and great care should be taken in carrying out such schemes.

ARTICLE 21 (LICENSING AND ASSIGNMENT)

Under the 1955 Act, the right of a trade-mark proprietor to assign a registered trade mark without the goodwill of the business in the goods or services the subject of the registration was curtailed by provisions rendering such an assignment void in certain circumstances, such as if the mark had never been used in good faith prior to


the assignment (unless the mark had been registered by a person on behalf of a company to be formed) or if:

“ ... a substantially identical or deceptively similar trade mark continues to be used by the assignor, after the assignment, in relation to other goods or services, where there exists a connexion in the course of trade between those goods or services and the assignor and where those goods or services are of the same description as those in respect of which the trade mark has been assigned, or of such a description that the public is likely to be deceived by the use of the trade mark by the assignor and assignee upon their respective goods or services.”

Section 106(3) of the new Act now simply provides that an assignment or transmission of a registered trade mark “may be with or without the goodwill of the business concerned in the relevant goods and/or services.” Again, however, one must be most careful with the assignment of registered trade marks without goodwill- there remain provisions under which a registered trade mark may be expunged if it ceases to be capable of distinguishing goods or services as being those of different registered proprietors.

There are no restrictions on licensing, and no compulsory licensing provisions.

SECTION 3: Geographical Indications

ARTICLE 22 (PROTECTION OF GEOGRAPHICAL INDICATIONS)

To date, the active control of misrepresentation of geographical origin under Austrahan law has been left to the use of Sections 52 and 53 of the Trade Practices Act and identical provisions in State and Territory legislation (see commentary under Article 16 above). Section 53(EB) specifically prohibits the making of a false representation with respect to the place of origin of goods.

The difficulties inherent in t h s simple approach have been dustrated in many cases, inclulng difficulties associated with goods with ingredients of various sources, or fabricated in a different country f?om the country or countries of origin of the components or ingredients. As a consequence, the Trade Practices Act has been amended to include specific rules applicable to country-of-origin designations. The Trade Practices Amendment (Country of Origin Representations) Act 1998 does not change the general effect of Sections 52 and 53, but introduces statutory defences in respect of certain usages complying with the new rules.

Under the new rules, set out in a new Division 1AA of Part v of the Act, it will be permissible to indtcate a country as the country of origin of goods (such as “made in X”) if they have been “substantially transformed” in that country and “50 percent or more of the cost of producing or manufacturing the goods (as the case may be) is attributable to production or manufacturing processes that occurred in that country” (Section 65AB).


The meaning of “substantially transformed” is elaborated in the new Section 65AE. Ths provides that goods will be “substantially transformed” in a country if “they undergo a fundamental change in that country in form, appearance or nature such that the goods existing after the change are new and different from those existing before the change.”

There are also proposed complex rules for calculating the cost of manufacture or production, set out in Sections 65AH (General), 65AJ (Cost of Materials), 65AK (Cost of Labour) and 65AL (Permissible Overheads).

In adchtion, a new Section 65AC deals with representations that goods were the produce of a certain country (such as “Product of X”). This section imposes a much higher standard. In this case “each significant ingredient or significant component of the goods” must be derived from the named country and “all, or virtually all, processes involved in the production or manufacture” must have occurred in that country.

There are also some special provisions concerning “prescribed logos” which are intended to be certification-type labels intended to designate a country of origin, such as the mark used to inchcate an article is “Australian Made”.

A defect with the legislation, in terms of compliance with the TRIPS Agreement, is that it makes provision in respect only of country of origin labelling, and does not deal in any manner with regions or localities within a country.

Protection against Registration of a Geographical Indication as a Trade Mark

It has long been the case that the Registrar of Trade Marks will refuse a registration of a trade mark, or accede to an application for expungement, where the mark includes an inchcation of geographical origin, either because it was deceptive, or incapable of distinguishing the applicant for registration, or as a result of the provisions prohibiting the registration of trade marks “likely to deceive or cause confusion” and marks that were “scandalous” or “contrary to law”.

Section 6 of the 1995 Act now provides a definition: “ ... ‘geographical indication’, in relation to goods originating in a particular country or in a region or locality of that country, means a sign recognized in that country as a sign indicating that the goods: (a) originated in that country, region or locality; and (b) have a quality, reputation or other characteristic attributable to the geographic

Section 61 provides for opposition to the registration of a trade mark on the ground that the trade mark contains or consists of a sign that is a geographical idcation in respect of goods originating in a country, region or locahty other than the place of origin of the goods in respect of which the trade mark is sought to be registered. However, the opposition wdl fail if, amongst other things:

origin.”


(a) the sign has ceased to be so used as a geographical indication; (b) the applicant for registration (or a predecessor in title) had used the sign in

good faith before commencement of the 1995 Act (1 January 1996) or the sign became a geographical indlcation;

(c) if the registration of the trade mark is being sought in respect of wine or spirits, the sign is identical to a name that, on 1 January 1995, was in the country in which the wine or spirits originated, the customary name of a variety of grapes used in the production of the relevant spirits or wine; or

(d) although the sign is a geographical indcation in respect of another country, region or locality, it is also one for the goods the subject of the application for registration of the trade mark and the applicant has not and does not intend to use the sign in a way that is likely to deceive or confuse members of the public as to the origin of the relevant goods.

ARTICLE 23 (ADDITIONAL PROTECTION FOR GEOGRAPHICAL INDICATIONS FOR

WINES AND SPIRITS)

Prior to the coming into effect of the Trade Marks Act 1995, the Australian Wine and Brandy Corporation Amendment Act 1993 (Commonwealth) was passed to implement an agreement between Australia and the European Economic Community known as the EU/Austraha Wine Agreement. The 1993 Act amended the Australian Wine and Brandy Corporation Act 1980 to give the Austrahan Wine and Brandy Corporation power to maintain a register of geographical indications, tradtional expressions and ancillary protected expressions for wines and spirits (the Register of Protected Names) includlng not merely Australian indications, but also those protected under the EU/Austraha Wine Agreement.

The provisions in the 1995 Act in respect of geographical indcations are not limited to the Register of Protected Names.

SECTION 4: lndustrial Designs

AKTICLE 25 (REQUIREMENTS FOR PROTECTION)

In Australia, the creator of an industrial design may secure a certain monopoly in the use of that design by registration of it under the Designs Act 1906.

A “design” is defined as “features of shape, configuration, pattern or ornamentation applicable to an article, being features that, in the finished article, can be judged by the eye, but does not include a method or principle of construction.”

Registration is only available if the design is new or original, in the narrow sense that it has not been published or used at all in Austraha prior to the application for registration.

AUSTRALIA’S RESPONSE TO THE TRIPS AGREEMENT 24 1

There are no “unregistered design rights” under Australian law, other than under the Copyright Act in respect of designs which have not been industrially applied, or two dmensional designs, discussed below.

Copyrigkt/Design Overlap: Two-Dimensional Designs (Suck as Textiles)

Certain provisions of the Copyright Act limit the rights of a copyright owner in respect of designs which are registrable, or have been registered, under the Designs Act 1906 and have been “applied industrially” by or with the permission of the copyright owner. “Industrially applied” means a reasonably large number of objects have been made and sold in accordance with the design (regulations under the Designs Act deem a design to have been “industrially applied” if more than fifq articles have been made and sold), or the design has been applied to continuous material, such as wallpaper or fabric, which has been sold.

If a design has been industrially applied by or with the permission of the copyright owner, and the design has not been registered under the Designs Act, any person is permitted to make the same articles without infringing the copyright in the design.

The Copyright Act provides an exception, however, so that these “copyright/ design overlap” proyisions do not apply to two-dimensional designs, such as textile designs, which have been applied industrially but not registered.

ARTICLE 26 (PROTECTION)

It is an infringement of a registered design to apply the design to any article without the consent of the registered proprietor, or to sell any such article made without the registered proprietor’s permission. It would not be an infringement, however, to import an article made by or with the permission of the registered proprietor, even without his consent. This is permissible because Article 6 (Exhaustion) permits national laws to be so limited.

To establish infringement of a registered design, one must establish that the alleged infringing article is identical to, or a ‘‘fraudulent or obvious imitation” of, the unique aesthetic elements of the registered design, not elements dictated by function. Recent experience suggests that these requirements are most difficult to establish in the face of even minor modifications to the design of the alleged infringing article, unless it can be shown that there was a “fraudulent” or intentional copying of the registered design.

242 THE JOUKNAL O F WORLD INTELLECTUAL PROPERTY

Restrictions to Protection

There are no such exceptions to the protection of industrial designs, other than in respect of rights of State and Federal government. The governments of the Commonwealth and the States may make use of any registered design for the services of the Commonwealth or the State, authorize (in writing) any other person to do so, or compulsorily acquire a registered design, subject to payment of reasonable compensation.

Duration of Rights

The duration of the registration under the Designs Act is a period of up to sixteen years, depending upon renewals and payment of renewal fees within that period.

SECTION 5: Patents

AKTICLE 27 (PATENTABLE SUBJECT-MATTER)

The Australian law of patents is presently governed by the Patents Act 1990. An invention is patentable under the 1990 Act if:

(a) it relates to “a manner of manufacture within the meaning of Section 6 of the Statute of Monopolies”, not bare scientific or mathematical discoveries, or knowledge with no immediate commercial value;

(b) when compared to the “prior art” as at the date of filing the full specification, it is: (i) “novel”, which means that it has not been disclosed publicly by

(ii) “inventive”, which requires that the invention is not an obvious next

(c) it is ‘‘useful”-which means that it appears capable of commercial exploitation;

(d) it has not already been secretly used by the applicant or a licensee. Any commercial exploitation of an invention disentitles the inventor or his or her assignee to a patent (other than use in confidential disclosure, for example for the course of research or development).

anything occurring before the priority date; and

step to another person skilled in the same area;

There is no restriction as to the place of invention, the field of technology and whether products are imported or locally produced.

AUSTRALIA’S RESPONSE TO THE TKIPS AGREEMENT 243

Inventions which may not be Patented

The requirement that the invention be a manner of manufacture within the meaning of the Statute of Monopolies (an English statute of 1623), has been interpreted to mean that it is “generally inconvenient” to grant letters patent in respect of methods of treatment of humans “which would give one medical practitioner ... a monopoly over, for example, a surgical procedure which might be greatly beneficial to man l~nd” . ’~

Micro- Organisms and Plant Varieties

Australia is a party to the 1977 Budapest Treaty on the International Recognition of the Deposit of Micro-Organism for the Purposes of Patent Procedure (the Budapest Treaty), and was adopted by Australia on 7 July 1987. The effect of the Treaty was that it removed fiom the legislation the requirement that a micro-biological inventor should hlly describe the invention in the trahtional manner. The 1990 Act embodies a number of changes reflecting the requirements of the Treaty.

Austraha has sui generis legislation for the protection of plant varieties, namely the Plant Breeder’s Rights Act 1994, which is adrmnistered by the Federal Department of Primary Industry and Energy. This legislation grants twenty to twenty-five year (depending on the plant species-trees and vines are permitted the longer period) exclusive marketing rights in respect of an identified, new plant variety, which is distinct, uniform and stable, as proved in field trials. The exclusive marketing rights include the exclusive right to the name selected by the plant breeder for the new variety.

ARTICLE 28 (RIGHTS CONFERRED)

Pursuant to Section 13 of the 1990 Act, a patentee enjoys “the exclusive rights, during the term of the patent, to exploit the invention, and to authorize another person to exploit the invention.” The word “exploit” replaces the wording of prior statutes, which was “make, use, exercise and vend”. Now the word “exploit” is defined to include:

“(a) where the invention is a product-make, hire, sell or otherwise dispose of the product, offer to make, hire, sell or otherwise dispose of it, use or import it, or keep it for the purpose of doing any of those things; or

(b) where the invention is a method or process-use the method or process or do any act mentioned in paragraph (a) in respect of a product resulting from such use.”

See Anaesthetic Supplies Pty Limited z Rescare Limited (1994) 50 FCR 1 (High Court of Australia); Bristol- 13

Myers Squibb Co. v. EH. Fuulding G Co. Limited [1998] 860 FCA (22 July 1998).

244 THE JOURNAL OF woRm INTELLECTUAL PROPERTY

The doing of any of these acts without the patentee’s consent, whether knowingly or not, w d therefore constitute an infringement. The use of the word “include” also contemplates an unknown expansion of the possible uses wbch may be found to be exclusive to the patentee-certainly, it seems, any exploitation which may yield a financial return.

The monopoly rights granted by a patent are therefore considerable, so broad in fact that courts have found it necessary to “imply” a licence granted by every patentee to a purchaser of patented goods that the purchaser may exercise the patent in order to onsell or otherwise deal in them, or to repair the goods. As a consequence, the importation of an article embodying a patented invention or made with a patented process by or with the permission of the patentee will not be an infringement, notwithstanding the apparently clear words of the statute. However, pursuant to Article 6 (Exhaustion) this is a permissible limitation.

The 1990 Act has also made clear that “contributory infringement” is now to be covered by the patentee’s exclusive rights. Thus it is made clear that supplying articles which may only be used in a way which infringes a process, or to produce an article which is an infi-ingement, is also an infi-ingement, or even in the case of supply of standard goods, or “staple commercial products”, where the supplier knows or has reason to believe the infringing use to which they wiU be put, or if the supplier gives instructions or any inducement to infringe with the goods supplied.

Assignments and Licensing

The assignment of a patent must be in writing and signed by or on behalf of the assignor and the assignee. No formality is prescribed for the licensing of patents. Assignments, licences, mortgages and other interests in patents (but not trusts) are required to be registered.

ARTICLE 29 (CONDITIONS ON PATENT APPLICANTS)

There are no requirements for disclosure of correspondmg foreign applications and grants, as such, although such disclosures may be necessary, of course, in the course of applications for priority based upon the Paris Convention or the Patent Co-operation Treaty, or recitals of prior art, for example.

ARTICLE 30 (EXCEPTIONS TO RIGHTS CONFERRED)

Members may provide limited exceptions to the exclusive rights conferred by a patent, provided that such exceptions do not unreasonably conflict with a normal exploitation of the patent and do not unreasonably prejudice the legitimate interests of the patent owner, taking account of the legitimate interests of third parties.


There are no limitations upon the rights conferred, other than as discussed in the context of Article 31 below.

ARTICLE 31 (OTHER USE WITHOUT AUTHORIZATION OF THE RIGHT HOLLIER)

Chapter 12 of the 1990 Act includes provisions permitting the grant by a court of a compulsory licence in respect of a patented invention where the court is satisfied that “the reasonable requirements of the public” with respect to the patented invention have not been satisfied, on certain conditions (Sections 133 and 135), and Chapter 17 of the 1990 Act includes provisions permitting the governments of the Commonwealth and the States may make use of any patented invention for the services of the Commonwealth or the State, authorize (in writing) any other person to do so, or compulsorily acquire a patented invention, subject to payment of reasonable compensation.

These provisions were amended by the Patents (World Trade Organization Amendments) Act 1994 to comply with Article 31.

New Sub-sections 133(3A) require that the court be satisfied that the applicant for a compulsory licence has tried for a reasonable period to negotiate a licence on fair and reasonable terms. The new Sub-section 133(3B) provides for the grant of a compulsory licence in certain circumstances where a patented invention cannot be worked by an applicant for the grant of licence without infringing another patent. The court must be satisfied that the patented invention sought to be worked involves an “important technical advance of considerable economic significance” on the invention to which the other patent that will be infringed relates (the “other invention”). The court must grant a licence to work the other invention so far as is necessary to work the patented invention and if the patentee of the other invention requires, the court must also grant a cross licence to work the patented invention.

In addition, new Sub-Sections (5) and (6) add further provisions regarding the remuneration to be paid by the compulsory licensee, and for review of the compulsory licence if circumstances change.

Some aspects of Article 31 are not reflected in the drafting of Sections 133 and 135, for example that “in the case of semi-conductor technology shall only be for public non-commercial use or to remedy a practice determined after judicial or administrative process to be anti-competitive”, but Section 136 provides that “an order must not be made ... that is inconsistent with a treaty between the Commonwealth and a foreign country.”

A new Sub-section 163(3) clarifies the circumstances in whch an invention is taken to be exploited for the services of the Commonwealth or a State, namely if the exploitation of the invention is necessary for the proper provision of those services within Austraha.

246 THE JOURNAL OF WORLD INTELLECTUAL PKOPERTY

Sub-section 165(1) (Non-remuneration for the use of the patent in certain circumstances) was also repealed and a new Section 165A was inserted providing for Court orders, upon application, that exploitation of an invention by the Commonwealth or a State is no longer necessary and that such exploitation is to cease.

AKTICLE 32 (REVOCATION/FORFEITUKE)

The Patents Act, and the regulations under it, provide opportunity for appeal to the Federal Court in respect of any such decision by IP Australia.

ARTICLE 33 (TERM OF PKOTECTION)

As a result of the Patents (World Trade Organization Amendments) Act 1994, the term of a standard patent granted before, on or after 1 July 1995 whose term at the time of grant expires on or after 1 July 1995 will be extended to twenty years. The amendmg legislation also eliminated the availabhty of extensions of term for pharmaceutical patents.

AKTICLE 34 (PROCESS PATENTS: BURDEN OF PROOF)

The Patents (World Trade Organization Amendments) Act 1994 also inserted a new Section 121A into the Patents Act 1990, placing a burden of proof on the defendant in certain infiingement proceedmgs. Where in an infi-ingement action brought after 10 January 1995 regarding a patented process for obtaining a product a defendant claims to have used a hfferent process than the patentee’s and the court is satisfied that:

(a) it is very likely that the patentee’s process was used; and (b) the patentee or its exclusive licensee has taken reasonable steps to find out

the defendant will be taken to have used the patented process unless the defendant proves to the contrary.

the defendant’s process but cannot,

SECTION 6: Luyouf-Designs (Topographies) of Integrated Circuits

AKTICLE 35 (RELATION TO THE TREATY ON INTELLECTUAL PROPEKTY I N RESPECT

OF INTEGKATED CIRCUITS-IPIC TKEATY)

Australia is a party to the IPIC Treaty, and the Circuit Layouts Act 1989 was enacted to comply with the Treaty. The subject-matter of protection of the Australian Act is “circuit layouts”, defined in the Act as:

AUSTRALIA’S RESPONSE TO THE TKIPS AGREEMENT 247

“ ... a representation, fixed in any material form, of the three-dimensional location of the active and passive elements and interconnections making up an integrated circuit.” The Australian legislation, consistent with the IPIC Treaty, appears deliberately

to set out to protect something different from the “mask work” protected by the United States Semiconductor Chip Protection Act, and accorchngly it is not entirely accurate to refer to the subject-matter of protection as a “topography”. It may protect the design for integrated circuits stored in computer meha, to be laid down directly on sihcon (or other) wafers by devices driven by data (and computer programs) without the interposition of masks, and even a circuit diagram, although a circuit diagram gives no indication as to how the elements of the physical chip wdl be three-dimensionally laid out. It is possible that a “representation” could indicate a collection of things, not a single document or data file, such as a number of masks, or a circuit diagram in conjunction with a logic diagram and masks. It may well include the circuitry peripheral to the silicon chip.

Circuit layouts are the subject of protection under the Act if they are “eligible layouts”, that is made by an Australian or by a foreign maker whose country is an “Eligible Foreign Country” recognized by regulations, or first “commercially exploited” in Australia or such a country. “Commercial exploitation” includes sale or dutribution by way and trade, and importation for that purpose, but does not include use of a circuit layout or integrated circuit, however commercial or extensive.

AKTICLE 36 (SCOPE OF THE PROTECTION)

The Circuit Layouts Act grants certain exclusive rights (called “EL rights”) to the owners of eligible layouts, includmg the right:

(a) to copy the layout, directly or indirectly, in a material form; (b) to make “an integrated circuit made in accordance with the layout or a

(c) to exploit the layout commercially in Australia. copy of the layout”; and

“Integrated circuit” is defined as follows: “ ... a circuit, whether in a final form or intermediate form, the purpose, or one of the purposes, of which is to perform an electronic function, being a circuit in which the active and passive elements, and any of the interconnections, are integrally formed in or on a piece of material.”

A printed circuit board may well be caught by this definition. The exclusive right of commercial exploitation is limited in respect of

importation by a “first-sale” provision, whereby it is not an infringement to commercially exploit any layout or integrated circuit which has been obtained as a result of commercial exploitation anywhere in the world by the owner of the


EL rights. This limitation is consistent with Article 6 (Exhaustion) of the TRIPS Agreement.

There are no registration requirements.

ARTICLE 37 (ACTS NOT REQUIRING THE AUTHORIZATION OF THE RIGHT HOLDER)

The Circuit Layouts Act provides for a number of defences:

- a “reverse engineering” defence, which is described as one of two processes, commencing either with the copying of the eligible layout or the mahng of an integrated circuit in accordance with the layout “for the purpose of evaluating or analysing the layout”, followed by the malung of an original circuit layout and then malung integrated circuits based on that original layout or copying or otherwise commercially exploiting the new layout (a very odd description of “reverse engineering’);

- any person may make any number of copies of a layout, without authorization, for “private use”; and

- where the infringer was not aware, and had no reasonable grounds for suspecting that his or her actions were an infringement. In most cases, an “account of profits” may be ordered nonetheless, but in the case of infringement merely by commercial exploitation of integrated circuits manufactured by a third party, a person is permitted to dspose of them if, at the time of acquiring them, he or she did not know, and could not reasonably be expected to have known, that the circuit was unauthorized.

The scope of these defences was fully examined and greatly read down in Nintendo Co. Ltd. v. Centronics Pty Ltd.14 On the one hand, it was determined in these proceedings that the “reverse engineering” defence does not apply to a circumstance where the analysis carried out by the person creating a competing integrated circuit was only for the purpose of making trivial alterations to the design of the circuit layout, or to conceal its origin. On the other hand, it was found that whilst the alleged infringer must be shown to have had no knowledge of any person who might be a holder of the relevant EL rights, the alleged infringer could not rely upon the assurances of an obviously dubious source (in this case, a certain Taiwanese manufacturer) to assert its innocence, and was certainly on notice as soon as it received a letter from the legal advisers of the owner of the EL rights.

(1991) 23 IPR 119 (Sweeney J); (1993) 24 IPK 481 (Full Bench); (1994) 28 IPR 431 (High Court) 14


Rights I$ the Federal Government

The Commonwealth may do, and authorize (in writing) any other person to do, any act comprised in the EL rights, without infringement, provided such act is for the defence or security of Austraha, the Commonwealth has attempted to negotiate a licence, gives notice to the owner and gives him or her such information as the owner may require (unless gwing notice to the owner or giving him or her such information would damage the defence or security of Austraha). In the absence of agreement as to royalties, t h s may be determined by an application to the Federal Court.

ARTICLE 38 (TERM OF PROTECTION)

The exclusivity of the EL rights continues for a period of ten years fiom the date of first commercial exploitation (anywhere in the world) or, if none, fiom the date of creation of the eligible layout. There is no provision for lapsing of rights in eligble layouts which have not been commercially exploited.

SECTION 7: Protection of Undisclosed Information

ARTICLE 39

The protection of confidential information, both of a commercial nature and of a personal kind, is not protected by statute under Austrahan law, but by the general law (equity). Under Austrahan law any person who receives (directly or indn-ectly) confidential information, and who is made aware, or should in all the circumstances be aware in any event, of its confidentiality, may be prevented &om using or disclosing the information otherwise than in accordance with the purposes of its disclosure. The recipient of such information, however, has no right, in the absence of any contract, to prevent the provider of the information from using it or disclosing it to any other person.

No change to Austrahan law was required to comply with the general provisions of Article 39. Article 39(3), however, requires members “as a condltion of approving the marketing of pharmaceutical or of agricultural chemical products which utilize new chemical entities, the submission of undisclosed test or other data, the origination of which involves a considerable effort” to protect such data against “unfair commercial use” and against “disclosure, except where necessary to protect the public, or unless steps are taken to ensure that the data are protected against unfair commercial use.”

In Austraha, the Therapeutic Goods Act 1989 governs the approval process for marketing and sale of pharmaceuticals. Up until 17 April 1998, there were no


provisions in this legislation expressly deahng with the protection of information supplied by applicants, although the general law would apply equally to such information as to information supplied in the private sector, if it were of a confidential nature.

However, in Smith mine G. French Laboratories (Australia) Ltd. v. Secretary to the Department of Community Service and Health15 the Federal Court of AustrahaI6 refked to grant an injunction to Smith mine in respect of information supplied to the Department for the purpose of an application by Smith Nine, restraining the use of such information by the Department for the purpose of evaluating an application by a competitor in respect of a generic equivalent. In this case, assuming that the relevant information was genuinely confidential (which was not clear), it was found that the Department was not abusing the duty of confidentiahty by using the information in the manner proposed. The purposes for which the information was received by the Department under the legislation was different, and known by Smith mine to be hfferent, fi-om the purposes of Smith Khne, and the Department was acting consistently with its duties under the legislation and was not in any way unfair. The Department was not restricted by Smith Kline’s commercial objectives.

Because of doubts raised by this Decision in the light of the TRIPS Agreement, the Therapeutic Goods Act was amended on 17 April 1998 by the Therapeutic Goods Legislation Amendment Act 1998 to introduce a new provision, Section 25A, wluch provides that those administering the legislation “must not use protected information” for evaluation of any thrd party product (Section 25A(l)). “Protected information” is defined as information provided in relation to an application to register under the legislation therapeutic goods (not being devices) consisting of active components, when no other goods containing the same active component are or have been registered, provided the application is successll. The obligation continues for only five years after registration, but may be waived or released by the person registered in respect of the goods. Damages are not permitted in respect of a breach of t h s obligation, effectively restricting a person complaining of a breach or threatened breach to injunctive relief only. Clearly, although this remedy is restricted in many respects, it exceeds the general law duty of confidentiality, because the information in question need not be confidential at all.

There is no equivalent legislation amending the registration process with respect to agricultural chemicals under the Agricultural and Veterinary Chemicals Act 1994 and its related Code, and related State and Territory legislation.

l 5 (1991) 28 Fcn 291. ’‘ Full Bench, on appeal from a Decision reported at (1990) 22 FCR 73.


SECTION 8: Control .f Anti-Competitive Practices in Contractual Licences

ARTICLE 40

Other than as provided in the Patents Act, there are no provisions of any intellectual property statutes concerning any anti-competitive licensing practices.

Trade Practices Act

Australia’s competition law is generally provided by Part I V of the Trade Practices Act. The Trade Practices Act prohibits in general terms agreements, arrangements or understandings having the purpose or effect of adversely affecting competition in a market, includmg more specific provisions dealing with market splitting and exclusivity arrangements, abuse of a dominant position in a market and price fking/resale price maintenance. However, Section 51 (3) of the Trade Practices Act expressly provides that a contravention of Part IV, other than Sections 46, 46A (Misuse of market power) or 48 (Resale price maintenance) shall not be taken to have been committed by reason of the imposing of, or giving effect to, any condition of any licence or assignment of a patent, registered design, copyright or EL rights, or under a registered licence of a trade mark, to the extent that the condltion relates to the property licensed. In respect of Sections 46 and 46A, it should be noted, that the exercise of an intellectual property in itself has been found not to amount to an exercise of dominance in a market-the intellectual property may have given rise to dominance, but is not in itself market power. 17

Patents Act

Section 144 of the Patents Act provides that certain conditions in a “sale or lease of, or a licence to exploit, a patented invention” will be void. Such conditions are those having the effect:

to prohibit or restrict the buyer, lessee or licensee from using a product or process (whether patented or not) supplied or owned by a person other than the seller, lessor or licensor; or

(b) to require the buyer, lessee or licensee to acquire a product not protected by the patent from the seller, lessor or licensor, or a nominee of the seller, lessor or licensor.” (emphasis added).

Such conditions are not void, however, if the buyer, lessee or licensee has the option of buying the product, or obtaining the lease or licence, on reasonable terms without the condltion at the time the contract was made, or if it is coupled with a right to seek arbitration of the purchase price, or in the case of a lease or licence,

“(a)

” See Bmderbund G. Datujlow v. Coniputemate G Others No. 1 (1991) 22 IPR 215.

252 T H E JOURNAL OF W O R L D INTELLECTUAL PROPERTY

termination of the obligation subject to payment of a (presumably higher) royalty (Sub-section 144(2)).

These provisions have been interpreted narrowly. It has been decided that a condtion in a contract whch prohibits the purchase of any product or services from a thrd party will not be void, because that does not affect use, and that a contract whch gives an incentive to the purchaser, lessee or licensee, or imposes “best efforts” obligations, is not caught also, as that does not require acquisition from the seller, lessor or 1icensor.l8

Perhaps the most serious consequence of the provision is that, for so long as such a void condition exists in any contract relating to the patent, it is a complete defence to any patent infringement proceehngs. This is so even if an alleged infringer has nothing to do with the contract-in effect the patentee’s rights are suspended. Also, even if a patentee alters its contractual arrangements, damages or an account of profits may not be recovered in any infringement proceedmgs for the period an affected contract was in place. This would suggest a further troubling possibility, that in any patent infi-ingement proceedmgs the alleged infiinger could properly require discovery of all contracts deahng with a patent, in order to ground a possible defence-thus exposing the patentee’s private commercial arrangements with unrelated parties to scrutiny by the infringer, and the courts.

Section 145 of the Patents Act further provides as follows:

“(1) A contract relating to the lease of, or a licence to exploit, a patented invention may be terminated by either party, on giving three (3) months notice in writing to the other party, at any time after the patent, or all the patents, by which the invention was protected at the time the contract was made, have ceased to be in force. (2) Subsection (1) applies despite anything to the contrary in that contract or in any other contract.”

This provision is curious in that it appears to make a clear distinction between a “contract” and a patent “licence” to which a contract relates. Accordingly, it would appear that the contract as a whole may be terminated even if the patent licence is merely one aspect of the agreement, unless the repugnant patent licence is found to be severable from the balance of the contract provisions. Typically, patent licences include licences of know-how and, not unusually, licences of other intellectual property as well, such as copyrights, trade marks, registered designs and, now, circuit layouts. It seems a remarkable conclusion that a valid agreement in respect of subsisting copyrights, trade marks and other intellectual property rights may be terminated when only (one 04 the patents covered by it have expired.

’’ See Tool Metal Manufacfaring Co. Lfd. v. Tungsten Electric Co. Ltd. [1955] 72 RPC 209; 1 WLR 761; 2 All. E.R. 657 (HL), discussed by the High Court of Australia and followed in Transfield Pry Ltd. u Arlo Znternarional Ltd. (1979-80) 144 CLR 83.


PART 111: ENFORCEMENT OF INTELLECTUAL PROPERTY RIGHTS

SECTION 1 : General Obligations

ARTICLE 41

Article 41 requires Members to ensure that enforcement procedures as specified in this Part are available under their law so as to permit effective action against any act of infiingement of intellectual property rights covered by this Agreement, includmg expeditious remedies to prevent infringements (paragraph l), and that: “Procedures concerning the enforcement of intellectual property rights shall be fair and equitable. They shall not be unnecessarily complicated or costly, or entail unreasonable time-limits or unwarranted delays”, as well as providmg for prompt, written, reasoned judgments given after a proper hearing (paragraph 3) with the possibility for judicial review in the case of administrative decisions (paragraph 4), provided that the Article does not require any separate judicial system for intellectual property matters (paragraph 4).

It would be impossible to say that Australia’s legal system (or, for that matter, the legal systems of any common-law country, including the United Kingdom and the United States) complies with paragraphs 1 and 2 of this Article. For example, in Australia, in order for the owner of copyright in a commercial photograph to take legal action to prevent deliberate and flagrant breach of that copyright, proceedings must be commenced in the Supreme Court of a State or Territory or the Federal Court of Austraha. Not only are the technical requirements for the preparation and filing of these proceedings complex, the filing fees may be thousands of dollars and, because the typical licence fees associated with commercial photographs may only be a few hundred dollars at the most, these courts may penahse the copyright owner by not granting him an order for costs, or only a much reduced order (very likely in a case such as this), and may even order him to pay the legal fees of the defendant- the courts have this power where any claim has a damages element of less than A$ 100,000 or sometimes higher! There are lower costs, and perhaps less slulled judicial fora, but the Austrahan government has taken no steps to gwe them jurisdction to deal with even the more straightforward, lower value claims.

SECTION 2: Civil and Administrative Procedures and Remedies

ARTICLES 42 TO 49

This Section deals with:

- the provision of fair and equitable procedures in civil judicial proceedmgs, including, notice, legal representation and the protection of confidential information (Article 42);


- requiring the production of evidence by opposing parties and summary judgment in the absence of compliance, based on the evidence presented (Article 43);

- the issue of injunctions (Article 44); - the grant of damages or an account of profits (in the latter case, “even where

the infringer did not knowingly, or with reasonable grounds to know, engage in infi-ingng activity”) (Article 45);

- the grant of other remedles in relation to the destruction or other disposal if infringing goods, and other protective measures (Article 46);

- requiring the infringer to provide information regarding suppliers or distribution channels of inkinging goods (Article 47); and

- compensation to alleged infkingers wrongly accused (Article 48).

Article 49 also requires that such provisions shall apply equally to administrative

Australtan law complies with all these requirements. as well as judicial proceedlngs.

SECTION 3: Provisional Matters

ARTICLE 50

Ths Article deals with interlocutory measures required to prevent the occurrence of an infringement or to preserve evidence, if necessary ex parte (“inaudita altere parte”), and suitable procedural protections in that case, with which Australtan courts comply.

SECTION 4: Special Requirements Related to Border Measures

ARTICLES 51 TO 60

Section 4 requires procedures to be afforded owners of copyright and registered trade marks under national law, in respect of goods which have not yet been released by customs authorities; such procedures in respect of other intellectual property rights are optional (Article 51).

In order to comply with this Section, a new Division 7 was introduced into Part v of the Copyright Act by the Copyright (World Trade Organization Amendments) Act 1994 extending the provisions relating to seizure of “copyright material” (works, sound recordmgs, cinematograph films, published editions of works, television or sound broadcasts as recorded in cinematograph films or sound recordings) by the Chief Executive Officer (CEO-formerly called the Comptroller- General) of the Australian Customs Service:

“ ... to unauthorized imports of all copyright materials and forms of storage of copies of works, films and sound recordings.”

AUSTRALIA’S RESPONSE TO T H E TRIPS AGREEMENT 255

A notice to the CEO may be given by a person (the objector) under Section 135, which must state that the objector is the owner of the copyright in copyright material and that he objects to the importation into Australia of copies of the copyright material, which are reasonably identified (see Article 52). The provision applies to copyright material if the malung of a copy would, if it had been carried out in Austraha by the person importing the copy, have constituted an infringement of the copyright in the copyright material.

Such a notice empowers the CEO to seize the identified copyright material but, in compliance with Article 53, Section 135AA provides that the CEO may refuse to seize material unless money has been deposited or security given for the reimbursement of the Commonwealth’s reasonable expenses of the seizure.

Section 135AC requires that the importer be notified (as required by Article 54) and Section 135AF provides for compulsory release of the goods if the objector has not instituted copyright infiingement proceemngs and notified the CEO within ten working days (Article 55).

There are also provisions for the compensation of the importer if such proceedmgs are not commenced or the proceedings are dismissed, as required by Article 56, inspection of the detained goods and the provision of information regardmg the source and destination of the goods (Article 57) and destruction or other d~sposal (Article 59).

There are similar provisions in the Trade Marks Act, but no equivalent may be found in the Circuit Layouts Act, the Designs Act or the Patents Act.

Conclusion

There is no doubt that Austrahan law complies with the minimum requirements of the TRIPS Agreement.

However, it is troubling that the stated objectives of the Agreement in respect of the encouragement of new technologies appear to be overlooked in the drive by successive Australian governments to minimize the rights of owners of copyright in technology-related products and integrated circuits relative to the right of owners of more conventional subject-matter. In addition, the quite deliberate discrimination against foreign published books is clearly against the spirit, if not the letter, of the Agreement,

Australia's Response to the Agreement on Trade-Related Aspects of Intellectual Property Rights

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