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April 26, 2013

Fraudulent IP protection services

IP Australia has warned inventors, designers and businesses to be wary of unsolicited or fraudulent IP protection, promotional or advertising services.

If you own a registered patent or trade mark, you may find yourself the target of letters regarding overseas registration of your application. Letters from unfamiliar organisations, especially letters requesting payment for unsolicited services, should be treated with caution.

Examples of unsolicited service requests include:
• offers to register patents or trade marks in international registers;
• invoices for registration of patents or trade marks in registers;
• offers of patent or trade mark monitoring services.

IP Australia has published a list of companies known to send unsolicited requests.

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Posted 26th April 2013 by David Jacobson in Legal

April 3, 2013

Thinking of moving to the cloud?

If your business is thinking of using a remote hardware or software service (eg over the Internet) instead of one run on a server in your own premises then here are some issues for you to consider, apart from the commercial issues of price, service and support:

  • will your business be able to continue if there is a loss of cloud computing services?
  • what protections are there for the confidentiality of business and customer data?

How do you manage the risks? Apart from specific contractual provisions (which we can advise you on):

  • Find out where the servers and the back up servers are located
  • What are the guaranteed service levels? What rebate do you get for downtime? Even Google, Amazon and Microsoft have downtime: see here
  • What happens to your data when the licence ends? Will it be deleted?
  • What is your exit strategy, including extracting data after termination (what format is it in?)
  • Are you able to back up your data continuously to your own local site?
  • Does the service comply with Australian privacy laws (especially if the servers are overseas)? Are there adequate systems and
    procedures in place to protect the privacy of your information?

Whilst there are advantages in cloud services (eg savings on capital and maintenance costs of your own servers), there are risks you need to understand and manage.

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Posted 3rd April 2013 by David Jacobson in Legal, Risk management, Web/Tech

February 12, 2013

Google not liable for misleading sponsored links

In Google Inc v Australian Competition and Consumer Commission [2013] HCA 1 the High Court of Australia decided that Google did not engage in conduct that was misleading or deceptive by displaying sponsored links that were misleading or deceptive.

It overturned a decision of the Full Court of the Federal Court of Australia (discussed here).

The ACCC claimed that particular search results displayed by the Google search engine between 2005 and 2008 conveyed misleading and deceptive representations, and that, by publishing or displaying those search results, Google engaged in conduct in contravention of s 52 of the Trade Practices Act 1974 (Cth)

The High Court reasoned as follows:

"Google did not author the sponsored links; it merely published or displayed, without adoption or endorsement, misleading representations made by advertisers....

Google emphasised that each relevant aspect of a sponsored link – the headline, the advertising text, the advertiser's URL, the keywords and the use of keyword insertion – was specified by the advertiser, and that Google merely implemented the advertiser's instructions. Google submitted that the technical facilities it provided through the AdWords program were different in kind, but not in principle, from facilities provided to advertisers by other intermediaries such as publishers and broadcasters. Google further contended that any commercial association or affiliation between an advertiser and another trader was something peculiarly within the knowledge of the advertiser, and was not a matter within Google's expertise. Google also relied on the primary judge's findings that ordinary and reasonable users of the Google search engine would have understood that the sponsored links were advertisements paid for by advertisers to promote their products and businesses, and that Google was merely passing them on for what they were worth....

That the display of sponsored links (together with organic search results) can be described as Google's response to a user's request for information does not render Google the maker, author, creator or originator of the information in a sponsored link. The technology which lies behind the display of a sponsored link merely assembles information provided by others for the purpose of displaying advertisements directed to users of the Google search engine in their capacity as consumers of products and services. In this sense, Google is not relevantly different from other intermediaries, such as newspaper publishers (whether in print or online) or broadcasters (whether radio, television or online), who publish, display or broadcast the advertisements of others. The fact that the provision of information via the internet will – because of the nature of the internet – necessarily involve a response to a request made by an internet user does not, without more, disturb the analogy between Google and other intermediaries. To the extent that it displays sponsored links, the Google search engine is only a means of communication between advertisers and consumers. "

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Posted 12th February 2013 by David Jacobson in Legal, Web/Tech

November 14, 2012

Google Inc liable for defamation

In Trkulja v Google Inc LLC & Anor (No 5) [2012] VSC 533 in the Supreme Court of Victoria the jury decided that the plaintiff established an entitlement to damages against Google Inc for a defamatory imputation in a photo that “the plaintiff was so involved with crime in Melbourne that his rivals had hired a hit man to murder him”.

The plaintiff’s case against Google Inc, in respect of an article, failed because Google Inc established the defence of innocent dissemination for the whole of the period of publication. The plaintiff’s case against Google Australia failed.

The trial judge rejected Google Inc's application for judgment notwithstanding the jury’s verdict.

He awarded damages of $200,000 against Google Inc.

Google Inc’s first submission in support of its application for judgment notwithstanding the jury’s verdict was that, as a matter of law, Google Inc was not a publisher of the images.

Google Inc argued that to establish its liability for publication the plaintiff was required to lead evidence showing, first, Google Inc was in some degree accessory to the communication of the material complained of and second, that Google Inc had the required mental element, namely, an intention to publish the Images matter.

Judge Beach said:

"The plaintiff accepted (correctly in my view) that he had to establish that Google Inc intended to publish the material complained of. While much was made by counsel for Google Inc of the fact that there was no human intervention between the request made to the search engine and the publication of search results, and of the fact that the system was “fully automated”, the plaintiff’s point was that Google Inc intended to publish everything Google’s automated systems (which systems its employees created and allowed to operate) produced. Specifically, the plaintiff contended that Google Inc intended to publish the material complained of because while the systems were automated, those systems were the consequence of computer programs, written by human beings, which programs were doing exactly what Google Inc and its employees intended and required. On this basis, it was contended that each time the material complained of was downloaded and comprehended, there was a publication by Google Inc (the operator and owner of the relevant search engines), as intended by it. So it was submitted by the plaintiff that Google Inc was a publisher throughout the period in respect of which complaint was made...

The question of whether or not Google Inc was a publisher is a matter of mixed fact and law. In my view, it was open to the jury to find the facts in this proceeding in such a way as to entitle the jury to conclude that Google Inc was a publisher even before it had any notice from anybody acting on behalf of the plaintiff. The jury were entitled to conclude that Google Inc intended to publish the material that its automated systems produced, because that was what they were designed to do upon a search request being typed into one of Google Inc’s search products. In that sense, Google Inc is like the newsagent that sells a newspaper containing a defamatory article. While there might be no specific intention to publish defamatory material, there is a relevant intention by the newsagent to publish the newspaper for the purposes of the law of defamation...

in my view, it was open to the jury to conclude that Google Inc was a publisher – even if it did not have notice of the content of the material about which complaint was made. Google Inc’s submission to the contrary must be rejected. However, Google Inc goes further and asserts that even with notice, it is not capable of being liable as a publisher “because no proper inference about Google Inc adopting or accepting responsibility complained of can ever be drawn from Google Inc’s conduct in operating a search engine”...

This submission must also be rejected. The question is whether, after relevant notice, the failure of an entity with the power to stop publication and which fails to stop publication after a reasonable time, is capable of leading to an inference that that entity consents to the publication. Such an inference is clearly capable of being drawn in the right circumstances (including the circumstances of this case). Further, if that inference is drawn then the trier of fact is entitled (but not bound) to conclude that the relevant entity is a publisher. Google Inc’s submission on this issue must be rejected for a number of reasons, the least of which is that it understates the ways in which a person may be held liable as a publisher."

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Posted 14th November 2012 by David Jacobson in Legal, Web/Tech

April 10, 2012

Google Adwords misleading

The Full Federal Court of Australia has allowed the ACCC’s appeal in Australian Competition and Consumer Commission v Google Inc[2012] FCAFC 49. The Full Court declared that Google, by publishing four advertisements on result pages of the Google Australia website, engaged in conduct that was misleading or deceptive, or likely to mislead or deceive, in breach of section 52 of the Trade Practices Act 1974 (now replaced by the Competition and Consumer Act 2010).

The appeal related to Google's practice of selling sponsored links results for businesses and websites which were competitors to the businesses being searched for even though there was no association betwween the businesses.

The original decision was discussed here.

The Full Court also ordered Google to put in place a consumer law compliance programme and pay the ACCC's costs of the appeal.

Google is likely to appeal to the High Court.

UPDATE 28 April 2012: Google has applied for special leave to appeal to the High Court.
UPDATE 22 June 2012: High Court grants Google special leave to appeal.
UPDATE 12 February 2013: High Court appeal allowed:Google not liable

The central issue for determination on appeal was whether the primary judge erred in finding that Google did not “make” the representations contained in the four advertisements that were the subject of the appeal.

The ACCC argued that, where a publisher communicates or “passes on” advertising material, for example, where a newspaper publishes advertisements produced by the advertiser, the publisher may be said to have made the representation concurrently with the advertiser unless the surrounding circumstances displace that conclusion. Alternatively, if the publisher does not merely “pass on” the advertisement, but engages in acts to prepare, create or approve the advertisement, then the publisher makes the relevant representations.

Google submitted that its position is analogous to that of the owner of a billboard or a telephone network in that advertisements carried on in such media will readily be understood as a statement by the advertiser.

The Full Court said:

Critical to this conclusion is the fact that the sponsored link is displayed on the screen in response to the user’s query which is made by the entry of selected key words. Thus, the user asks a question of Google and obtains Google’s response. Several features of the overall process indicate that Google engages in misleading conduct.

First, the response shows, in large blue font, as part of the sponsored link, the keyword entered by the user. The advertiser’s message in black font and the URL in green, appear immediately below the keyword and as part of the response. What the user is therefore told is that the advertiser’s message and the advertiser’s URL are an answer to the user’s query about the subject matter of the keyword which includes the identification of a competitor of the advertiser. The falsity of the conduct involved in the four responses in the present case is that the advertiser’s URL misrepresents a connection between the searched term identifying the competitor and the URL of the advertiser.

The conduct is Google’s because Google is responding to the query and providing the URL. It is not merely passing on the URL as a statement made by the advertiser for what the statement is worth. Rather, Google informs the user, by its response to the query, that the content of the sponsored link is responsive to the user’s query about the subject matter of the keyword.

The most obvious example of the falsity of the response and of the fact that it is Google’s conduct, is the Harvey World Travel sponsored link. The user enters that keyword because the user is seeking information about Harvey World Travel. Instead, the user is given the URL of one of Harvey World Travel’s competitors. In this example, the user is not told merely that the advertiser has provided Google with this URL. Rather, Google tells the user that the URL provided below is the contact address for information about Harvey World Travel. The whole purpose of the user’s inquiry, to which Google responds by providing organic links and sponsored links, is to answer the user’s query. The enquiry is made of Google and it is Google’s response which is misleading.

This conclusion is reinforced by a consideration of the nature of Google’s search engine, and the AdWords program. Google’s search engine is the information retrieval system which the user employs to navigate his or her way through the web using keywords that deliver links to other locations on the web. Google supplies its advertising customers with the ability to select keywords which are expected to be used by persons making enquiries through Google’s search engine. The ability of advertisers to select “broad match” keywords enables them to trigger sponsored links through Google’s search engine based on known associations which are determined by Google’s proprietary algorithms. Although the keywords are selected by the advertiser, perhaps with input from Google, what is critical to the process is the triggering of the link by Google using its algorithms. That is a further reason to conclude that it is Google’s conduct as a principal, not merely as a conduit, which is involved in each of the four instances that form the subject matter of this appeal.

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Posted 10th April 2012 by David Jacobson in Legal

April 2, 2012

Copyright and the digital economy: Review draft terms of reference

The Attorney-General has released draft terms of reference for the Australian Law Reform Commission's review of copyright and the digital economy.

Amongst other things, it is proposed the ALRC is to consider whether further exceptions should be provided to:
• facilitate legitimate use of copyright works to create and deliver new products and services of public benefit; and
• allow legitimate non-commercial use of copyright works for uses on the internet such as social networking.

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Posted 2nd April 2012 by David Jacobson in Legal, Web/Tech

February 17, 2012

No extra fees for radio simulcasts

In Phonographic Performance Company of Australia Ltd v Commercial Radio Australia Limited [2012] FCA 93 the Federal Court of Australia decided that the existing licence which permits members of CRA to broadcast PPCA Sound Recordings in Australia encompasses within its scope the playing of such recordings in both the FM radio programs delivered to the public using the broadcasting services bands and in the same radio programs delivered simultaneously to the public via the Internet.

UPDATE 3 April 2013: Appeal upheld by Full Federal Court: broadcasting over the internet is a distinct broadcasting service from radio.

Justice Foster said: " The service which transmits the very same radio programs at essentially the same time both to the FM transmitters and beyond and to the web stream servers and beyond is the one service. On the facts before me, the members of CRA who stream their radio programs on the Internet do so only as part of a program package which also simultaneously transmits those programs via frequency modulated radio waves to the consumer’s FM receiver. In truth, the service is but one service being a service which combines various delivery methods or platforms and which delivers the same radio program using the broadcasting services band."

Radio stations will not have to pay an additional fee to simulcast over the internet.

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Posted 17th February 2012 by admin in Legal

February 2, 2012

Optus timeshifting broadcast service not in breach of copyright

In Singtel Optus Pty Ltd v National Rugby League Investments Pty Ltd (No 2) [2012] FCA 34 Justice Rares of the Federal Court of Australia decided that Optus’ TV Now service does not infringe the copyright in broadcasts of football games in competitions conducted by the Australian Football League (AFL) and National Rugby League partnership (NRL). Telstra has an exclusive licence from the AFL and NRL to exploit free to air broadcasts of live and pre-recorded AFL and NRL games on the internet and mobile telephony.

UPDATE 28 April 2012: The appeal of the NFL, AFL and Telstra to the Federal Court Full Court succeeded.

UPDATE 10 May 2012: Optus will apply for special leave to appeal to High Court

UPDATE 11 September 2012: Optus'application for special leave to appeal to High Court dismissed

Optus began offering a new service called “TV Now” in July 2011 to its private, as well as small to medium business, customers. The service gives a user the ability to record free to air television programs, including AFL and NRL games, and play them back on any one of four compatible devices, namely, PCs, Apple devices, Android devices and 3G devices.

The user can view the recording in the 30 days following the time of the original broadcast. When a user clicks “play” on his or her compatible device, Optus’ data centre streams the copy of the program in the appropriate format to that device so that the user can watch it. However, the streamed copy is not downloaded to the users’ device. And, users with Apple iPads or iPhones can watch a program selected for recording “almost live” within about two minutes of the commencement of the actual free to air broadcast. Users with other compatible devices (PCs, Android and 3G devices) can only watch a recorded program after the broadcast had finished.

Optus contended that each user of the TV Now service, rather than it, had recorded, or made the recording, and played it without any infringement of copyright. Optus relied on an exception in s 111 of the Copyright Act (the "timeshifting" exemption). In essence, the exception allows a person to make a film, or copy, or recording of a broadcast solely for his or her private and domestic use by watching or listening to the material broadcast at a time more convenient than the time when the broadcast is made. If the person does make a copy in those circumstances, then the making of the recording will not infringe copyright in the broadcast.

The parties agreed there were 7 key legal issues but the decision was based on 2 findings:

1. that the user made each recording of a broadcast by clicking on the “record” button on his or her compatible device. Justice Rares considered that this result was substantially similar to the position where a person used a video cassette recorder (VCR), digital video recorder (DVR) or similar device to copy a television broadcast. Even though Optus provided all the significant technology for making, keeping and playing the recording, he considered that in substance this was no different to a person using equipment or technology in his or her home or elsewhere to copy or record a broadcast.

2.Justice Rares decided that when the user clicked the “record” button, he or she did not infringe the rightholders’ copyright in the broadcasts of the AFL and NRL games because of s 111(1) and (2) of the Copyright Act. That was because the evidence suggested that individual users had made the recordings using the TV Now service solely for their private and domestic use by watching the recordings at a more convenient time, even if they watched these “near live” within minutes of the start of the broadcast.

The decision will be appealed.

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Posted 2nd February 2012 by admin in Legal

September 23, 2011

ACCC misleading conduct action against Google dismissed

In Australian Competition and Consumer Commission v Trading Post Australia Pty Ltd [2011] FCA 1086 in which Google Inc was the Second Respondent the Federal Court has published its decision in respect of proceedings originally instituted in 2007 against Google (background). The ACCC alleged misleading and deceptive conduct in relation to sponsored links that appeared on the Google website.

One of the claims made by ACCC related to the use of "Kloster Ford": the business names "Kloster Ford" and "Charlestown Toyota" appeared in the title of Google sponsored links to Trading Post’s website. Kloster Ford and Charlestown Toyota are Newcastle car dealerships who competed against Trading Post in automotive sales. In other words, the ACCC said that Trading Post bought those names for use to link to its site when certain automotive sales searches were performed on Google even though Trading Post had no association with those names.

The ACCC had previously settled its action against Trading Post and declarations were made about its misleading conduct. The decision therefore mostly related to Google.

The ACCC alleged that the appearance of organic search results and sponsored links was essentially the same and therefore misleading. It also complained about misleading keywords in the headlines of particular advertisements.

After considering Google's technical evidence and trade marks policy Justice Nicholas dismissed the claims against Google.

He concluded:

"I do not accept that ordinary and reasonable members of the class would be likely to be lead to believe that either top left or right side sponsored links were not advertisements or that they were no different to organic search results. This conclusion applies not only to the Kloster Ford advertisement and the Charlestown Toyota advertisement but also to top left sponsored links and right side sponsored links generally..."

"Once it is accepted that the ordinary and reasonable members of the class would have understood, as was the fact, that the Kloster Ford advertisement and the Charlestown Toyota advertisement were advertisements, then it seems to me to follow that they would be most unlikely to have understood that any information conveyed by those advertisements was endorsed or adopted by Google. They would have understood that the message conveyed was a message from the advertiser which Google was passing on for what it was worth."

UPDATE 14 October 2011: The ACCC has appealed the decision
UPDATE 10 April 2012: ACCC's appeal successful.
UPDATE 12 February 2013: Google's High Court appeal succeeds

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Posted 23rd September 2011 by admin in Legal, Web/Tech

June 14, 2011

RSA’s bank security tokens and data breach notifications

The RSA cyber attacks resulted in RSA warning its customers of the risk to RSA's SecurID two-factor authentication products, including the security tokens RSA's customers provide to their customers.

Whilst RSA argues the data breach risk was low, there is a major reputational risk.

This has lead to reports that Westpac, ANZ, NAB and CBA as well as the ATO will replace the security tokens they have issued to their customers.

It is still not clear what information has been obtained from RSA but clearly its customers are not taking chances.

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Posted 14th June 2011 by David Jacobson in Legal, Risk management
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