Overview

A recent case Primary Health Care Ltd v Commissioner of Taxation [2010]  FCA 419 highlighted the importance of “independent intellectual effort” in copyright cases.

Facts

The beneficial owner of a trust, the applicant, purchased certain medical and dental practices on behalf of the trust. The applicant alleged to obtain the copyrights interest as part of the purchase of practices, which fell under computable income and as such was allowed for tax deductions from the net revenue of the trust. In this case, Copyright was claimed for the following:

• Prescriptions
• Health summaries
• Referral letters
• Consultation notes of the acquired medical and dental practices.

Findings

It was noted by Justice Stone that for a medical record to qualify as literary work it should contain some individual intellectual effort and so could copyright exist. All medical records that were claimed for copyrights were assessed by Justice Stoneas follows:

Consultation notes that had only one author was considered continuous narrative, which displayed independent intellectual effort and so was qualifying for copyright protection. However, the consultation notes that had multiple authors were restricted.

Prescription consisted only of the names of medications, dosage and standard directions therefore was not qualified for copyright protection and also health summaries that had a list of previous illnesses and actions were restricted.

The referral letters contained intellectual independent effect and content were driven by the purpose of the letters so it qualified for copyright protection.

Outcome

Justice Stone found that in medical records like prescriptions, health summaries, referral letters and consultation notes do not involuntarily attract copyrights. So she determined that such records should be examined on a case by case basis which also displays the level of independent intellectual effort that would justify classifying the record as an original literary workfor the purposes of the Copyright Act 1968.

A recent Mantra case provides relief to brand owners seeking to register color asa trademark (TM). Federal Court decision of MarsAustralia Pty Ltd v Société des Produits Nestlé SA [2010] FCA 639 (Mantracase), Mars Australia Pty Ltd (Mars) was allowed to register its color called 'Whiskas Purple’, which it uses in its “Whiskas” brand of cat food as a TM.

Background

Mars,the owner of the well-known cat food Whiskas had used its Whiskas Purple color on its cat food products.

Mars applied for registering 'Whiskas Purple' as a TM. Although at first, the application was accepted, the registration was later abandoned by the trademark authorities due to opposition from Nestle. Nestle contested that the color purple was not able to differentiate Mars’ products from those of other traders.

Mars further appealed in the Federal Court, which later accepted the Mars’s contention that colour could indeed function as a TM of a product. Mars submitted significant evidence to prove the same. Mars proved that:

Mars had used its colour 'Whiskas Purple' in Australia since 2000 and it had been greatly endorsed and promoted.

The colour had been used as the leading colour across the entire variety of Mars’ cat food products;

Mars also made clear that the color 'Whiskas Purple' was created and carefully chosen for the Mars Group in Europe to form a stronger brand name identity for Whiskas.

Federal Court Decision

The court allowed Mars application to proceed to registering its shade of purple as its TM. The Court further held that Mars had implemented a completely new color and had heavily endorsed it from the outset in its packaging and advertising supplies up to the time that Mars filed its TM application.

While other companies in Australia have used a range of shades of purple on their own pet food products, the shade of purple in Mars’s case was used to signify specific range within a product. On the other hand, Mars had used its colour 'Whiskas Purple' as abrand in its own right.

Lessonfor Brand Owners

The lesson from this case is that it is vital that all the Brand Owners must apply for registration of their TM in case they use color as a feature of their mark. However, it should be noted that registering a single color would not be easily obtained.

It is vital to build a fine branding plan from the beginning to make sure that the TM is endorsed and used widely. It should be ensured that the uniqueness of the TM color could be established. 

Intellectual Property law serves to deliver justice when it comes to patent threats. The party threatened with an “unfair” patent infringement is entitled to relief under section 128 of the Australian Patents Act 1990 (the Act) in certain circumstances.

How does this really work?

The underlying principle under section 128 is that the person initiating the threat or the party feeling threatened, bears the burden of proving the infringement. If the breach cannot be proved, the threat is dismissed as “unjust”. If successful, then no question of section 128’s relief provisions will arise.

How do you justify a threat?

1) According to section 131 of the Act, a mere notice warning the potential infringer of the existence of a patent does not tantamount to an unjustified threat.

2) This section further permits the patent owner to seek a declaration that the party posing a threat is ignorant of any inappropriate use or breach of the patent.

3) However, a delicate balance is required here – going beyond the privileges of section 131 can lead to a slippery slope of making an unjustified threat.

The court will examine the language that was used; was the message conveyed directly or indirectly; what the reasonable person interpret the claimant’s intention to be; did the person receiving the correspondence believe the initiator would take legal action, within the normal course of business?

If the threat is unjustified, and the threatened party withdraws the threatened product from the market, it may be eligible for substantial damages. All the recipient needs to prove in order to qualify for more than nominal damages is a mere reliance on the threat and a change in their position.

This was demonstrated in World of Technologies v Tempo [2007] FCA 114, where $213,059 in damages was awarded to the allegedly threatened party who upon reliance on the threat removed a product from sale.

What about the relief?

Section 128 provides the aggrieved party with relief ranging from a restriction or injunction on the continuation of such threats to the issuance of a statement that the threats are unfair. Relief may also include a recovery of any costs associated with the threat in question.

In summary, it is prudent to seek a registered patent attorney’s opinion before making a threat or even simply initiating communication with the other side, posing the alleged threat. Picking your battles carefully will prevent the threat from backfiring.

Forrest Gump was right. ‘Life is like a box of chocolates – you never know what you’re going to get!’ In the intellectual property game this is especially true for the chocolate industry and big brand names such as Mars, Cadbury and Sweet Rewards.

Mars Australia, in Mars Australia Pty Ltd v Sweet Rewards Pty Ltd [2009] FCA 606 has recently filed an infringement suit alleging Sweet Reward’s packaging of its chocolate malt balls are confusing and misleading consumers. Mars has also claimed a passing off suit against Sweet Rewards. It also alleges infringement of two registered packaging trade marks for Maltesers.

The claim was dismissed by both the Federal Court at first instance and soon after by the Full Federal Court.

Perram J. of the Federal Court of Australia echoed a simple test, placing reliance upon consumer perception that it was”unlikely that an ordinary consumer of chocolate confectionary could mistake something which is not called a Malteser for a Malteser. In that sense, Mars is a victim of its own success.”

The Full Federal Court, in dismissing the appeal brought by Mars, held that using similar packaging and pictures in the same industry was commonplace. However, this decision has been criticized for its simplicity in overseeing the efforts and resources which are invested by brand owners in creating their brand image.

Rhonda Steele, Marketing Property Manager of MARS Bars, for Asia and Australia shares some wisdom with competitors. She states that, ‘to adequately protect your intellectual property rights it's very important to do your thinking early and to conduct thorough searches - both of the trade marks register and the market place - so that you can be confident of launching your new product without fear of infringing someone else's rights.'

Rhonda further asserts that this might be more problematic for small companies. Prior to registering a mark and securing your intellectual rights, a substantial sum of money is invested in product development and package design. If it is found that a new product violates prior rights, these resources are then unfortunately wasted.

However, this is not the end of the saga. Once a mark is registered, what follows identifies the survival and success of the company and its rights.

In contrast, interestingly enough, Cadbury and Darrell Lea, faced with a similar dispute over trade mark branding and imaging in a passing off case, have settled their differences over the colour purple.

No longer is a device, name, or actual product the only important considerations in this battleground. Colour too is involved. Cadbury has six colour trade marks registered. The realm of intellectual property rights are sophisticated enough to warrant such registrations. Where does it end?

These controversies show that the outcome is not always predictable. Mars has been marketing Maltesers since 1989 and Sweet Rewards has introduced Malt Balls in 2005. It is also not always the case that the earlier mark holder will receive more protection and patronage from its market.

Whilst it is safe to assume that every consumer loves chocolate, what goes on behind the scenes is not as lovable, calories aside. Consumers have the luxury of choice. It is their very choice and perception of these brands, along with statutory authorities and rules governing this area of the law, which make a difference at the end of these intellectual property disputes.