Protect your IP or lose it

Thursday, 08 December 2011 05:21 Noric Dilanchian

Over recent months that's the learning from our client work as well as from external developments in intellectual property ("IP") law in Australia and abroad.

This article is an update on those external developments, answering these five questions:

1. Trade secrets: Who did DuPont sue to protect it's Kevlar trade secrets and win $US919.9 million in a U.S. jury trial?
2. Patents: Why has Apple Inc. (with iPad) versus Samsung (with Galaxy Tab 10.1) gone to the High Court, the highest court in Australia?
3. IT Security: What can an employer do to retain control over Twitter, Facebook and social media web presence against former employees and web masters?
4. Copyright and safe harbour principle: How is the forthcoming High Court decision in Roadshow v iiNet (ie Hollywood studios and some Australian ring-ins versus a big ISP) merely one of many battle fronts in the ongoing war over copyright and revenue streams?
5. Trade marks: Do you think of where you might make a legal complaint or lodge a court action when you think of your online marketing or e-commerce ventures? You should. Facebook faces that issue in a case against Faceporn.com, a business established in Norway. So have the Australian distributors of Affinage products.

Trade Secrets

In September 2011 in a U.S. case DuPont won a Kevlar® confidential information case and damages of $US919.9 million against South Korea's, Kolon Industries. What is notable is the huge size of that jury damages decision.

To read more go to DuPont's press release webpage: http://onlinepressroom.net/DuPont/NewsReleases/, then search for "DuPont Wins Trade Secret Case Against Kolon Industries", 14 September 2011.

Patents

On 30 November 2011 the full court of appeal of the Federal Court (Justices Dowsett, Foster and Yates) reversed the decision of Justice Bennett at first instance. The appeal court ruled in favour of Samsung: [2011] FCAFC 156. This appeal decision discharged the interlocutory injunction obtained by Apple Inc. against Samsung's tablet product, Galaxy Tab 10.1, which competes with Apple's iPad.

Apple on 2 December 2011 obtained from Justice Heydon of the High Court a stay pending determination of an appeal to the High Court to begin on 9 December 2011. [2011] HCATrans 326.

IT Security

Facebook, Twitter and other social media are being increasingly used by employees as a "work around" contractual restraint of trade obligations.

As a related trend, reports are increasingly appearing of social media ownership disputes in Australia and abroad. The pattern is former employees assuming ownership of web presence established while with the former employer.

An example of such a U.S. case is discussed in "Ex-Employee Converted Social Media/Website Passwords by Keeping Them From Her Employer--Ardis Health v. Nankivell", http://blog.ericgoldman.org/archives/2011/10/ardis_health_v.htm.

The solution is simple and cost-effective. Every employment contract should have a social media paragraph or make reference to an enforceable policy and procedure for control, management and record keeping for Twitter, Facebook, LinkedIn and other social media. Employers either control these virtual assets and legally protect them or they'll lose them to former employees.

The centrally of IT security as a modern issue is underlined internationally by the fact that Australia and the U.S. have amended the ANZUS treaty making cyber attack have the same weight as bombing or invasion. Source: Sydney Morning Herald "No reason to get even closer to Uncle Sam", 15 November 2011 Read more: http://www.smh.com.au/opinion/politics/no-reason-to-get-even-closer-to-uncle-sam-20111114-1nfgn.html

Copyright and the Safe Harbour Principle

The Roadshow v iiNet  case awaits the High Court judgement expected within weeks.

The legal and technological field here of is a moving feast with numerous developments, locally and internationally, and on several fronts. Examples follow.

• AUSTRALIA. five ISPs (Telstra Optus iiNet iPrimus Internode) have via their representative, Communications Alliance Ltd, published A Scheme to Address Online Copyright Infringement: PDF: http://www.commsalliance.com.au/__data/assets/pdf_file/0019/32293/Copyright-Industry-Scheme-Proposal-Final.pdf. In a related development, the Internet Industry Association wants the Copyright Act & Broadcasting Act changed to expand safe harbour protection and has filed a "Safe Harbour Scheme" review submission to that effect. The Federal Government review page is here.
• UNITED STATES. the Stop Online Piracy Act (SOPA) is a bill going through the process of review following introduction in the House of Representatives on 26 October 2011. (Quoting Wikipedia) "The bill would allow the U.S. Department of Justice (DOJ), as well as copyright holders, to seek court orders against websites accused of enabling or facilitating copyright infringement. Depending on who requests the court orders, the actions could include barring online advertising networks and payment facilitators such as PayPal from doing business with the infringing website; barring search engines from linking to such sites and requiring Internet service providers to block access to such sites." There is a corresponding bill from Senate, named Protect IP Act. A major article against the proposed new laws is here.
• UNITED KINGDOM. The UK safe harbour position is discussed in Music and IP conference report: 1.

Trade Marks

Jurisdiction is a perennial issue in web marketing and online commerce. On 29 November 2011 the U.S. District Court, Northern District of California, San Francisco Division has ordered Facebook, Inc. to show cause as to why a court in California would have jurisdiction in Facebook's case against Faceporn.com, a site operated by a company in Norway. Facebook, Inc v Thomas Pedersen and Retro Invent AS,

http://www.scribd.com/doc/74389272/Facebook-v-Pedersen-10-Cv-04673-N-D-Cal

A 2011 decision in Australia sheds light on when a trade mark used on a website operated abroad might infringe rights held by a party in Australia. Parties associated with the "Affinage" consumer products label signed a separation agreement some years ago, each retaining separate territorial rights respectively located around either UK or Australia. The holder of the Australian territory rights took action when it felt its rights were being infringed, both under the separation contract and common law for trade marks infringement. The decision held that the UK-based party operated a site that was "specifically for or directed or targeted" at Australia and was thus infringing. In practical terms it did this with a drop down menu on its website in which appeared various territories including "Australia". International Hair Cosmetics Group Pty Ltd v International Hair Cosmetics Limited [2011] FCA 339 (8 April 2011).

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