In this edition #14 …

August 26, 2010

Jake Goldenfein and Professor Megan Richardson discuss Paul Keating’s recent lecture on privacy law. In “The Privacy Imperative in the Information Age ‘Free For All’”, former Prime Minister Keating presented his views on the current state of privacy law in Australia.  Following this he invited the media to present their views in a seminar aptly titled ‘Invasion of Privacy – is it ever justified?’.

In “Unauthorised Sequels”, Shaun Miller examines the closely watched US case of Salinger v. Colting. The case involves the application to enjoin the publication of an unauthorized sequel to “The Catcher in the Rye”.  Mr Miller examines the central arguments and reflects on the legal landscape for unauthorized sequels in Australia.

In “Obscene, Seditious and Blasphemous Books”, Marc Trabsky reviews the “Banned Books Exhibition”. The exhibition charts the history of censorship in Australia and runs until 27 August 2010 at the Baillieu Library, University of Melbourne.

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The Privacy Imperative in the Information Age: Keating on the media, and the media on Keating.

August 26, 2010

By Jake Goldenfein and Prof. Megan Richardson

On the 4th of August 2010, former Prime Minister Paul Keating delivered a speech titled ‘The Privacy Imperative in the Information Age “Free for All”’. This was hosted by the Centre for Advanced Journalism at the University of Melbourne. Eight days later the media was invited to respond at another Centre for Advanced Journalism public seminar aptly titled ‘Invasion of Privacy – is it ever justified?’. Below is an outline of the Keating lecture and media response, as well as a brief summary of the legal reforms sought by Keating and others.

The Keating Lecture

Keating’s speech opened with a famous 19th century article by Samuel Warren and Louis Brandeis on ‘the right to privacy’ that admonished the indolent and prurient seeking of gossip, and fundamentally blamed the media for shifting public tastes; stating ‘when real personal gossip attains the dignity of print, and crowds the space available for matters of real personal interest to the community, what wonder that the ignorant and thoughtless mistake its relative importance’. (‘The Right to Privacy’  (1890) 4 Harvard Law Review 193)

In quoting this text, Keating was attempting demonstrate the media’s culpability for the normative degradation of privacy in society. He also used the Warren and Brandeis definition of privacy, being ‘to protect those persons with whose affairs the public has no legitimate concern, from being dragged into undesirable and undesired publicity…’ to preface his speech.

Keating’s speech was a disparaging characterisation of the media today, claiming ‘these organisations proclaim the importance of free speech, in the dissemination of news, but clearly are more at home in the entertainment business’. Although he acknowledged ‘the battle that Warren and Brandeis fought against the evils of gossip has been well and truly lost with the passage of time’, Keating noted the issue of privacy is clearly still in issue, ‘particularly where to draw the line between freedom of expression and any remaining right an individual has to have some control over the gathering and publication of information about personal aspects of their life.’

To emphasise that the issue is still very much alive, Keating endorsed the recommendations relevant to the media in the 2008 Australian Law Reform Commission report including:

  • changes to, but continuation of, the largely self-regulatory arrangements that are a condition for the exemption media organisations enjoy from the Privacy Act;
  • introducing a definition of ‘journalism’ in the exemption and altering the definition ‘media organisation’;
  • permitting media organisations to engage in standard setting only when also committed to independent privacy standards developed in conjunction with the Privacy Commission and the Australian Communications and Media Authority; and
  • the establishment of a general statutory cause of action for breach of privacy.

Why we Need Privacy Protection

Keating attacked the media’s response to a proposed statutory privacy action, particularly the parroted defence of ‘the public’s right to know’.

The exegesis of celebrity media’s position came from the Deputy Editor of Sydney’s Daily Telegraph when questioned over the ‘public interest’ in the publication of supposed nude pictures of Pauline Hanson. Her response was ‘that is for our readers to tell. That will be determined by the number of people that buy the paper’.

Other examples of invasion of privacy provided were the publication of photos of Lara Bingle in the shower, and reporting of then NSW Transport Minister David Campbell leaving gay haunt Ken’s of Kensington.

Statutory Cause of Action

With respect to a statutory cause of action, Keating claimed the common law provides too piecemeal and fragmented an approach for what should be a unified action. He suggests a legislative solution would remove uncertainty, give effect to Australia’s obligations under article 17 of the International Covenant on Civil and Political Rights and bring us in-step with peer jurisdictions such as the UK, New Zealand and Canada.

Media Self-regulation

Keating attacked the broadcast and print media’s self-regulation, especially in light of codes of practice that define and reprove breaches of privacy. He pointed to gaps in the transparency and independence in the investigation of complaints as well as weak enforcement mechanisms, citing that nobody has ever been expelled from the Media Entertainment and Arts Alliance for a breach of standards.

The ‘Right to Know’ coalition’s defence of self-regulation speciously claims that the media regulation framework is effective and working well as evidenced by the low number of complaints, investigations and breach findings. However, Keating opined the self-regulation is ‘more or less a set of home town arrangements for the media companies’ with dodgy funding based on circulation, meaning News Ltd is the major contributor.

Finally, Keating suggested industry leaders and profession should acknowledge that improvements are needed rather than aggressively standing behind the status quo, as well as provide guidance, education and training in defining ‘the public interest’.

For those wanting to read more of Keating a transcript of the lecture can be found on the Centre for Advanced Journalism webpage. A recording of the Keating lecture can be found here.

The Media Response

A week after Keating delivered his speech, the Centre for Advanced Journalism hosted a panel of media representatives to respond, moderated by Michael Gawenda. Invited to talk were: ABC Radio’s Virginia Trioli; Text Media Group founder and CEO Eric Beecher; and the Herald Weekly Times editor-in-chief Phil Gardner.

Virginia Trioli

Trioli spoke first, focusing her submission on explaining the conflict journalists face in relation to ‘the right to know’. She announced her support for Keating’s arguments, citing the nude Pauline Hanson photos as evidence that some publications had lost touch with what activates the public’s right to know. Trioli stated certain media outlets unfortunately struggle to comprehend the distinction between ‘the public interest’ and ‘of interest to the public’.

Trioli argued that personages submitting themselves to the media, such as Julia Gillard appearing in Women’s Weekly, should not open them up to inappropriate personal questions because the media hounds them ex ante into those compromised positions. She claimed this confusion is a ‘bind’ for the media because of its infantile prurience in establishing the distinction between the fascinating and the inappropriate.

For those reasons, Trioli supported Keating’s position on introducing a privacy cause of action. She questioned the accountability of the legal system and the amount of clarity in judicial adjudication of media action, but considered those arguments overborne by the corrosive damage invasion of privacy can inflict on the institution of journalism.

Phil Gardner

Phil Gardner followed, and unsurprisingly responded directly to Keating’s targeting of News Ltd. Gardner prefaced his defence with the fact that Herald Weekly Times produced 1000 news pages and hefty amounts of on-line content weekly, and sometimes mistakes were made. He claimed occasionally standards and ethics lapse when producing so much content, but it is neither deliberate nor related to increasing revenue.

Gardner argued that Keating approached the entire issue with ‘hypocrisy’, claiming if he still wanted to be a public figure he is not entitled to demand the media not interfere with his family. These comments referred to Keating’s privacy tirade in November 2009 when an article in the Sunday Telegraph alleged Keating’s daughter Katherine kicked one of its photographers at a social event, screaming ‘do you want me to throw you down the stairs and kill you?’

Gardner’s comments echoed then News Ltd chairman John Hartigan who stated ‘it is difficult to stomach the hypocrisy of Paul Keating… What we have now is a man calling for a new law so that people like him can use their wealth, power and privileged positions to avoid scrutiny when it suits them, while remaining happy to exploit the media for their own gain at other times’.

In response to Keating’s direct attack on News Ltd, Gardner outlined systems in place at HWT to demonstrate its awareness of the sensitivities of newsgathering. These included: a code of conduct; training for young journalists; and the upcoming appointment of an HWT readers’ ombudsman.

However, Gardner maintained that much of the privacy debate was archaic, as things had changed since the 70s, 80s and 90s. For example, he claimed voters no longer vote exclusively on policy, rather family and image are sufficiently important to allow the media to investigate those aspects of politician’s lives.

Gardner said ‘bollocks’ to Keating’s critique of self-regulation and the insinuation that the media is focused on circumventing effective governance. He claimed the attack on the funding arrangements of the press council were unfounded as industry funding is an acceptable world wide model.

On the proposed cause of action for breach of privacy, Gardner argued there are already numerous (and sufficient) legal privacy protections such as the Surveillance Devices Act, trespass laws, defamation, and breach of confidence. Further, he argued that codified privacy laws such as in the UK only protect the rich and famous. Finally, he argued ‘those who shout the most about privacy are working hardest to be in the media’.

Eric Beecher

Eric Beecher tackled Phil Gardner’s submission directly, stating that if News Ltd was truly about to engage in a brave new ethical world, ‘we can all go home’. On the chance that the situation doesn’t change, he added, he wanted to make a few points.

Beecher criticised the recurring ‘right to know’ trope as a veil on the true motivations of career advancement, profit, and circulation – all of which emanate from the endemic ‘wink and nod’ culture of large media offices. He claimed journalists and editors would not admit it in public or private because they know it’s immoral. As such, when Keating delivers a sound argument in favour of creating a breach of privacy action, the organisations engaging in such breaches defend themselves with political clout to prevent new privacy laws emerging.

While Beecher acknowledged there is an intrinsic challenge for privacy laws to curb sensational abuse while protecting the legitimate investigative role of the media, he believes eventually political frustration and public dismay about media will force governments to legislate.

Finally, Beecher argued against media self-regulation. He claimed because many large media organisations fail to operate within an ethical culture, he lacked confidence they would act in the public interest when performing regulatory functions.

Question Time

Michael Gawenda prologued the debate by noting that while Phil Gardner apparently welcomed privacy debate, unlike Fairfax, not a single News Ltd publication reported Keating’s initial lecture.

There were several interesting audience questions, with one audience member asking what protection a statutory cause of action for breach of privacy could offer beyond the existing privacy protection in other laws. The response from the panel was ‘effectively everything on Today Tonight’, however the issue warrants further explication.

The Centre for Media and Communications Law has offered a number of public seminars on the existing legal position as well as the various proposals for law reform offered by the Australian Law Reform Commission and New South Wales Law Reform Commission. (Details of the seminars can be found on the CMCL website and the latest seminar is written up in the (2010) 15 Media & Arts Law Review 264.) Recently, the Victorian Law Reform Commission joined these efforts with its own proposals for two new statutory causes of action for serious invasions of privacy (among other things): see the Commission’s Report on Surveillance in Public Places on the Victorian Law Reform Commission webpage.

It will be interesting to see what comes of the proposals but there does seem to be a heightened privacy-consciousness these days, especially vis-à-vis actions of the media. Personal experiences can make a difference here. If Keating’s polemic on privacy was possibly triggered (at least in part) by his daughter’s experience with the media at a social event, we note that Warren and Brandeis’ article on ‘the right to privacy’ is said to have been prompted by the disruption of Warren’s daughter’s wedding by the ‘yellow press’. The article has turned out to be one of the most influential pieces of legal writing on the right to privacy to date.

Jake Goldenfein is an LLB graduate and researcher at the CMCL and IPRIA’ at The University of Melbourne

Megan Richardson is a Professor of Law at The University of Melbourne.

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Unauthorised Sequels

August 26, 2010

By Shaun Miller – Partner, Marshalls & Dent Lawyers.

“The Catcher in the Rye” was written by American author J.D. Salinger in 1951.

The book has since become a huge critical and commercial success and is now considered to be a classic work of mid-20th century literature.  The book’s main character, through whom the story is told, is one Holden Caulfield – a 16 year old newly minted private boarding school drop out who embarks on 4 days wandering around New York – a journey of self-discovery, reflections and interactions with an array of characters and New York landmarks including the Natural History Museum and Central Park.

The book is written with a fresh literary “look and feel” – with unique turns of phrase, descriptions and dialogue.

Fast forward to the present day…an American author living in Sweden named Fredrick Colting (writing under the name John David California) wrote a sequel of sorts to Salinger’s famous and celebrated novel, “Catcher in the Rye”.  The sequel, called “60 Years Later: Coming Through the Rye” portrays a 76 year old Holden Caulfield (referred to as “Mr C”) – the famed protagonist of the original work – wandering the streets of New York after having escaped from a retirement home.

Salinger, who died earlier this year, had been living in recluse and was reportedly outraged that the book “60 Years Later: Coming through the Rye” brazenly stole, without Salinger’s permission, Salinger’s exact same character Holden Caulfield (along with a host of other characters from that original book) and placed them in the same location (New York) and used similar turns of phrase, descriptions and dialogue as in the original “Catcher in the Rye”.

Indeed, Salinger was so concerned that his rights had been trampled on that he brought a law suit against Fredrick Colting and his publisher alleging claims for Copyright Infringement and common law Unfair Competition. To review the trial decision Salinger v. Colting, 641 F. Supp. 2d 250 (S.D.N.Y. 2009) click here.  For the appeal, Salinger v. Colting, 607 F.3d 68 (2d Cir. N.Y. 2010) click here.

Issues from the Case

The case raises a host of issues including:

  1. Whether or not characters in books, films or even music lyrics attract the protection of copyright law;
  2. If such characters do attract copyright protection, in what circumstances will the “fair use” exceptions to infringement of copyright – such as parody or criticism and review – apply;
  3. When is a work simply derivative of an original work (and therefore more likely to breach copyright) and when is a work transformative of that original work (and therefore less likely to be in breach);
  4. How does all this fit into the ideas/expression dichotomy that is the cornerstone of copyright law.
  5. How does the overriding imperative of Freedom of Expression – especially in the context of the US Constitution – affect these issues;
  6. Can an author or publisher use the misleading and deceptive conduct sections of Part V of the Trade Practices Act (and the mirror fair trading legislation in the States and Territories) or invoke the common law action of passing off to stop an unauthorised sequel.
  7. Can an author rely on his or her moral rights in their original work to prevent an unauthorised copy;

J.D. SALINGER v FREDRIK COLTING ET AL

But first, let’s turn to Salinger’s law suit against Fredrik Colting and his publisher regarding the contested unauthorised sequel “60 Years Later: Coming Through the Rye”.

What were the Basic Arguments of Each Side?

Both sides acknowledged and agreed that (a) Salinger holds a valid copyright in the book “The Catcher in the Rye” and (b) that Colting had access to that book.

So the first issue that the Judge Deborah A. Batts sought to determine was whether or not there is a substantial similarity between the two books.

Salinger’s lawyer submitted that there were two prongs to the substantial similarity question because Salinger was pleading two separate claims for copyright infringement.  One is of the character Holden Caulfield.  The second is of the book “The Catcher in the Rye”.

Substantial Similarity Claim 1: Copyright in the Character – Holden Caufield

As to the first claim, Salinger’s lawyer said it was beyond doubt that the character Mr C in “60 Years Later” is Holden Caulfield from “Catcher in the Rye”.  The question was whether the iconic character Holden Caulfield was protectable under copyright law.  It was submitted by Salinger’s lawyer that Holden Caulfield was a sufficiently delineated character to be protected under US copyright law.  This was despite there being only a literary description of Holden Caulfield, as opposed to a graphic representation.  This was also despite the character Holden Caulfield only appearing in one work.

Substantial Similarity Claim 2: Copyright Infringement of Other Elements of the Original Work

Regarding the second claim of substantial similarity between the two books themselves, Salinger’s lawyer argued that there was not merely substantial similarity by virtue of the taking of the character, but there were numerous other elements the “60 Years Later” copied including other characters, an attempt to imitate the narrative and the tone, the style and the settings (including Central Park, the cemetery and the Museum of Natural History).  It was argued that the court should go beyond looking at the fragmented literal similarities and look at the total concept and feel of the two works.

Counterarguments – No Substantial Copying

Fredrik Colting’s lawyer argued that the character of Holden Caulfield as published initially is not sufficiently developed and delineated to attract copyright protection.  In any event, Colting’s lawyer contended that even if Holden Caulfield attracted copyright protection (which he disputed) he did not believe there was the taking of sufficient amounts of Holden Caulfield to constitute copyright infringement.

As to the question of breach of copyright in “Catcher in the Rye” itself, Colting’s lawyer submitted that no expression was taken from that book and used in “60 Years Later” i.e. there was no direct copying of the text and that “60 Years Later” has 80 characters in it, only really three of which are from “Catcher in the Rye”. There are 25 characters in “Catcher in the Rye” that do not appear in “60 Years Later”. So there was no substantial similarity between the two books themselves.

Counterarguments – Fair Use

The next issue to be looked at was whether, if “60 Years Later” did substantially copy the character Holden Caulfield and the book “Catcher in the Rye, whether that use was “fair use”.

Colting’s lawyer asserted that “60 Years Later” was written as critical commentary on the relationship between J.D. Salinger and the character he created, namely Holden Caulfield.  “60 Years Later” was an unauthorised fictional examination of the relationship between J.D Salinger and his most famous character – and that the cover of the book (both back and front) will make that clear..  It’s not a sequel.

Colting’s lawyer contended that “60 Years Later” is commentary on the original work because the original work has become an iconic representation of a disaffected youth who has certain characteristics, “60 Years Later” is an analysis of the creation, the creator of that work (i.e. Salinger) and what happens to that character many, many years later when we see the character having lived his whole life.  You start to have more understanding about what the character was and what the original book was and it changes your reading of the original work.  In short “60Years Later” is literary criticism in a fictional form.

Counterarguments – Dangers of Granting Injunctions in Copyright Cases

Colting’s council then raised the issue of the danger of granting an injunction in a copyright case – i.e. a prior restraint against the publication of a book before a full hearing, before a full exploration of all the issues  - noting that the United States Supreme Court has expressed its concern about injunctions in copyright cases and that where there is a colourable fair use defence, that a remedy of an injunction is an extraordinary remedy.  A prior restraint, it was argued, would raise very serious First Amendment issues.

In response to this, Salinger’s lawyer argued that “60 Years Later” was a sequel – pure and simple – and that the only question for the court to determine was whether that sequel was transformative or substantially similar to the original book.  It was contended that “transformative” means: to take an original work and to somehow imbue it with new meaning, message or purpose, to provide something more for the public.

It was submitted that the only way that Colting had transformed the Holden Caulfield character was to make him 76 years old instead of 16 and the only way that Colting had transformed “Catcher in the Rye” was by adding some characters.

Furthermore, it was submitted that “60 Years Later” did not constitute literary criticism or parody.

In essence, Salinger’s lawyer asserted that this was a case about Salinger’s right not to have a sequel published, and not to authorise a derivative work.  i.e. it was a case about Salinger’s right to keep “Catcher in the Rye” and Holden Caulfield frozen in time for the full term of copyright.

Trial Decision of Judge Deborah Batts in the United States District Court

Judge Deborah Batts granted Salinger the preliminary injunction essentially for the reasons that Salinger had argued for one.

In determining that there was a “substantial similarity” between the two books as well as between the character Holden Caulfield from “Catcher in the Rye” and the character Mr C from “60 Years Later” such that it was an unauthorised infringement of Salinger’s copyright, the court cited The Wind Done Gone case (Suntrust Bank v Houghton Mifflin Company 268 F. 3d 1257, 1266 (11th Circuit, 2001) where it was found that “substantial similarity” exists where “an average lay observer would recognise the alleged copy as having been appropriated fro the copyrighted work”.  The court also cited the case of Castle Rock Entertainment v Carol Publishing Group 150 f. 3d 132, 137 (2nd Circuit, 1998) where it was found that under the “ordinary observer” test, two works are substantially similar where the ordinary observer, unless he set out to detect the disparities, would be disposed to overlook them, and regard the aesthetic appeal of the two works as the same.

The District Court then addressed Colting and his publisher’s claim that their novel “60 Years Later” and its protagonist Mr C constitute fair use of Salinger’s copyrighted work.

The court noted that at the constitutional level, while the “Copyright Clause and the First Amendment [are] intuitively in conflict, [they] were drafted to work together to prevent censorship” such that “the balance between the First Amendment and copyright is preserved, in part, by the idea/expression dichotomy and the doctrine of fair use”.

In the United States, the doctrine of fair use was codified in section 107 of the 1976 Copyright Act, which called for a four-factor test:

  1. the purpose and character of the use, including whether such use is of a commercial nature or is for non-profit educational purposes;
  2. the nature of the copyrighted work;
  3. the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and
  4. the effect of the use upon the potential market for or value of the copyrighted work.

The court weighed up these four factors in the aggregate and concluded that because Salinger had established a prima facie case of copyright infringement, irreparable harm from that infringement is presumed – so the court preliminarily enjoined Colting and his publisher from manufacturing, promoting, selling, or otherwise disseminating any copy of “60 Years Later” in or to the United States.

Appeal of Decision

Lawyers for Fredrik Colting and his distributor filed an appeal on 23 July 2009 with the Second Circuit Court of Appeals arguing that the injunction barring publication of Colting’s “60 Years Later: Coming Through the Rye” is an “impermissible prior restraint and an unwarranted extension” of copyright protection.

Where the case is up to

A three-judge panel of the US 2nd Circuit Court of Appeals heard arguments in early September 2009 against the injunction.

On 30 April 2010, the appeals court sent the case back to the lower court to determine whether Salinger’s trust will suffer irreparable harm from the publication of Colting’s book.  But in its ruling, the appeals court made clear that it expected Salinger’s trust to prevail.

“Most of the matters relevant to Salinger’s likelihood of success on the merits are either undisputed or readily established in his favor,” the court ruled.

Australian Law

This all raises the question as to whether there is any basis under Australian copyright law or other laws, to allow an author of an original work of fiction to restrain such a book being re-written, for example, in a different time or place but with the same character or characters, or simply restrain a character being recycled in another work.

Where and how does the law balance the rights of the author to maintain control over their fictional characters and the rights of other writer’s to create new works using those characters and therefore contribute to the overall literary culture for the public to enjoy?  Or if existing characters are cordoned off, will the so-called fan author be forced to devise their own characters, thereby enlarging the literary catalogue?

This also raises the question of the need to give authors the economic incentive to create their fictional works in the first place by according those authors copyright in their works – not only enabling the author to prevent the direct verbatim copying of the text of their works, but also the right to write a sequel or prequel, and the right to adapt the work into another medium such as a film.

The issue of character appropriation also highlights the ideas/expression dichotomy.  While there is no copyright in broad-brush generic characters such as star-crossed lovers or evil villains, at what point (if any) – moving along the continuum – do characters become so well defined and originally crafted that they should attract copyright protection.

It is fair to say that under Australian copyright law, “characters” do not receive separate discrete copyright protection.  A literary, non-graphic character can only be a literary work in itself, or a component of a literary work.

Nevertheless, it may be argued that if a new author takes a pre-existing character’s name, described appearance, personal traits and borrows (or steals) from the original character development, reviewing the character’s history and even refers to earlier important plot incidents which shaped the character – it may be argued that if all of those things appear in a sequel, then the author of that sequel has taken a “substantial part” of the original work by appropriating the character pursuant to section section 14 (1) (a) of the Australian Copyright Act.

As we know, when assessing whether a “substantial part” of an original work has been appropriated, courts in Australia will look at the quality or “value” of what has been taken much more so than the quantity of what has been taken.

The test that is often cited is Justice Peterson’s in University of London Press Ltd v University Tutorial “rough practical test” – namely, what is worth copying is prima facie worth protecting”.

But a character can never really be copied in the same way that copying text verbatim can be.  A character can only be re-crafted by the appropriator, who must choose their own collection of words to regenerate the character.

A test which Australian courts would seem likely to adopt was outlined in Zeccola v Universal City Studios where Justice Gray said (at first instance) that the question of substantial similarity “ultimately comes down to the subjective impression of the judge who makes the comparison” between the original work and the appropriated work.

But the possible danger of that test is that judges then become literary and artistic critics, which is probably not what judges are employed to do!

Australian Copyright Law – Defences to Infringement

If it can be established that a literary work has been substantially reproduced (or communicated to the public) by the appropriation of a character, the next issue that arises is whether any defences are available to the infringer.

Under the Australian Copyright Act, possible defences would be fair dealing for the purpose of “criticism or review” and also possibly fair dealing for the purpose of “parody or satire”

Other Breaches of the Law

It also needs to be pointed out that unauthorised sequels may fall foul of other areas of the law.

These include “misleading and deceptive conduct” under section 52 of the Trade Practices Act 1974 (Cth) and its State-based equivalent Fair Trading Acts.  Also, under section 53 (d) of the Trade Practices Act, a corporation (which would be the publisher) shall not represent that it has a sponsorship, approval or affiliation it does not have.

There is also the common law action of passing off.

It could also be argued that the unauthorised sequel breaches the moral rights of the original author.

Conclusion

Perhaps I’ll leave the last word to Holden Caulfield himself.  While Holden Caulfield was trying to think of a profession that he would enjoy, he concluded that although “lawyers are alright” he would not want to be one because “even if you did go around saving guys’ lives…how would you know you weren’t being a phoney?  The trouble is, you wouldn’t”.

That’s a wise observation indeed from a mere fictional character!!!

Shaun Miller is a Partner at Marshalls & Dent Lawyers.  This article is based on a seminar paper that the author presented at a seminar on unauthorized sequels at the Intellectual Property Research Institute of Australia (IPRIA) at the University of Melbourne on 8 October 2009

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Obscene, Seditious and Blasphemous Books

August 26, 2010

By Marc Trabsky

Review of the Banned Books Exhibition, Leigh Scott Gallery, First and Ground Floor, Baillieu Library, University of Melbourne, 7 June to 27 August 2010.

The Banned Books Exhibition at the University of Melbourne charts the history of censorship in Australia from its modern incarnations in the early part of the twentieth century to the present day.

The display of a shrink-wrapped copy of Bret Easton Ellis’ American Psycho and a cardboard cut-out of Philip Nitschke’s and Fiona Stewart’s banned book, The Peaceful Pill Handbook reminds us that censorship is not of a bygone era. That in Australia, censorship of obscene, seditious and blasphemous books is far from over.

This exhibition not only displays a collection of banned books and magazines from the early part of the twentieth century – surprising viewers by the volume of literature that has been banned at some point in Australia – but also challenging artworks by local and international artists, as well as essays from leading academics. The most remarkable aspects of this exhibition are the sections on the Bill Henson controversy and the sections on sedition that feature amongst other artefacts the recent banning in Australia of jihadist literature.

Certainly the exhibition as a whole counters the belief that we have been liberated from the censorship of literature in the twentieth century, but it is these specific sections that implore us to question how censorship still operates today. In particular, the exhibition draws connections between the Government’s proposed plan to filter the Internet and the ‘old regime’ of twentieth century censorship.

This exhibition will thereby appeal to anyone with an interest in the history of censorship in Australia and particularly to academics, lawyers and artists.

Marc Trabsky is an MPhil Candidate in the Department of Gender and Culture Studies at The University of Sydney and a Research Assistant for the Centre for Media and Communications Law at The University of Melbourne.

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In this edition #13…

August 12, 2010

Janice Luck and Peiwen Chen provide a round up of High Court IP Cases for the first half of 2010. There were two trade mark cases decided – EJ Gallo v Lion Nation (the Barefoot Radler case) and Health World v Shin-Sun Australia (the Inner Health Plus case). Ms Luck and Ms Chen deliver an in depth analysis of these important cases and reflect on the implications.

Rebecca Mouy and Jake Goldenfein reflect on a recent seminar titled “Who Owns the News?” With NewsCorp’s move to a payment model for access to online content, the question of who really does own the news has suddenly become “big news” for Australian law.

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High Court round up – IP cases in the first half of 2010

August 12, 2010

By Janice Luck and Peiwen Chen

The High Court handed down two decisions on trade mark issues in the first half of 2010:

  • E. & J. Gallo Winery v Lion Nathan Australia Pty Limited [2010] HCA 15.
  • Health World Limited v Shin-Sun Australia Pty Ltd [2010] HCA 13; and

Case 1: E. & J. Gallo Winery v Lion Nathan Australia Pty Limited [2010] HCA 15

On 19 May 2010 the High Court upheld an appeal by California-based wine producer E & J Gallo Winery (Gallo) against the removal of its BAREFOOT trade mark from the Trade Marks Register for non-use. French CJ, Gummow, Crennan and Bell JJ (the joint judges) delivered a joint judgment. Heydon J delivered a separate judgment on the evidence adduced to establish authorised use, holding the evidence was sufficient. On the remaining issues, Heydon J stated that he agreed with the substance of the joint judges’ reasoning.

Background

Gallos’ BAREFOOT trade mark had been registered in Australia since 9 March 1999 in class 33 in respect of wines (the BAREFOOT registered trade mark).

During 2006 and 2007, Lion Nathan Australia Pty Limited (Lion Nathan) developed what was referred to as a concept beer containing lemon and lime flavours. This concept beer was intended to be less bitter than traditional beers and was targeted at non-beer drinkers.  In January 2008 Lion Nathan began selling this beer under a trade mark treated for the purposes of the litigation as being BAREFOOT RADLER.

Gallo commenced proceedings against Lion Nathan in the Federal Court alleging that Lion Nathan’s use of the BAREFOOT RADLER trade mark infringed its BAREFOOT registered trade mark pursuant to section 120(2) of the Trade Marks Act 1995 (Cth) (the Act). Lion Nathan counter-claimed against Gallo arguing that Gallo’s BAREFOOT trade mark had not been used during the three year period from 7 May 2004 to 8 May 2007 (the statutory period) and should therefore be removed from the Register in accordance with section 92(4)(b) of the Act.

The trial judge decided against Gallo on both matters holding that Lion Nathan had not infringed Gallo’s registered trade mark and that Gallo’s registered trade mark should be removed from the Register for non-use.

Gallo appealed to the Full Federal Court which held that Lion Nathan had infringed Gallo’s registered trade mark but also agreed with the trial judge that Gallo’s registered trade mark should be removed from the Register for non-use. Gallo appealed the Full Federal Court’s decision on non-use to the High Court.

The High Court refused Lion Nathan’s application for special leave to cross-appeal the Full Federal Court’s finding that Lion Nathan had infringed the BAREFOOT registered trade mark pursuant to section 120(2) of the Act and the finding that the effective date of removal from the Register of Gallo’s BAREFOOT registered trade mark should be the date of judgment.

What was the use of the BAREFOOT mark?

Between 9 March 1999 and 17 January 2005 the registered owner of the BAREFOOT registered trade mark was Michael Houlihan (Houlihan) who had licensed the mark to Grape Links Inc trading as Barefoot Cellars (Barefoot Cellars). Grape Links Inc was sold to Gallo and pursuant to this sale the BAREFOOT registered trade mark was assigned to Gallo in January 2005.

On 14 February 2001, 60 cases of wine bearing the BAREFOOT trade mark were shipped by Barefoot Cellars to a German distributor who had purchased the wine. Some of this wine was subsequently sold to a Victorian liquor wholesaler, Beach Avenue Wholesalers Pty Ltd (Beach Avenue), who imported the wine into Australia in July 2002. Beach Avenue offered 144 bottles of this wine for sale in Australia during the statutory period. Fifteen bottles were sold after 7 May 2004 but prior to the transfer of the BAREFOOT registered trade mark to Gallo and another 26 were sold after that transfer but before 8 May 2007. Some 18 bottles were given away.

However, there was no evidence that Gallo, Barefoot Cellars or Houlihan knew that the wine was being offered for sale or sold in Australia under the BAREFOOT trade mark.

The High Court Decision – the principal issue

In order to defeat Lion Nathan’s counter claim to remove the BAREFOOT trade mark registration for non-use, sections 92 and 100 of the Act required Gallo to establish use in good faith in Australia during the statutory period of the BAREFOOT trade mark by the registered owner of the trade mark or an authorised user, that is, a person using the trade mark under the control of the owner of the trade mark in accordance with section 8 of the Act.

By virtue of section 7(3) of the Act, an authorised use of a trade mark by an authorised user is taken to be a use of the trade mark by the owner of the trade mark. The only acts considered by the joint judges were the offer for sale and selling by Beach Avenue of the bottles of wine bearing the BAREFOOT trade mark. The joint judges recognised that these acts constituted a use of the BAREFOOT trade mark in Australia.

Was there “use” by the registered owner or an authorised user?

The issue thus became whether that use was use by the registered owner or an authorised user. This in turn led to a consideration of the ambit of the High Court decision in Estex Clothing Manufacturers Pty Ltd v Ellis and Goldstein Ltd (1967) 116 CLR 254 (the Estex Case) where it was held on page 271

“[W]hen an overseas manufacturer projects into the course of trade in this country, by means of sales to Australian retail houses, goods bearing his mark and the goods, bearing his mark, are displayed or offered for sale or sold in this country, the use of the mark is that of the manufacturer.”

However, neither Gallo nor Houlihan nor Barefoot Cellars had knowingly projected the BAREFOOT wine into the course of trade in Australia because none of them had been involved in the BAREFOOT wine being imported into and sold in Australia.

The joint judges held that there was no suggestion in the Estex Case that what was sufficient in that case was necessary in every case. Earlier in their judgment in the Gallo Case the joint judges had stated that “use” for the purpose of the non-use removal provisions of the Act must be understood in the context of the definition of a trade mark as a sign used to distinguish the goods of one person from the goods of others and that this definition encompassed the orthodox understanding that one function of a trade mark is to indicate the origin of the goods to which it is applied.

Thus the joint judges went on to hold that the capacity of a trade mark to distinguish the registered owner’s goods does not depend on whether the owner knowingly projects the goods into the Australian market but rather depends on the goods being in the course of trade in Australia. In paragraph 52 the joint judges enunciated the following principle:

“An overseas manufacturer who has registered a trade mark in Australia and who himself (or through an authorised user) places the trade mark on goods which are then sold to a trader overseas can be said to be a user of the trade mark when those same goods, to which the trade mark is affixed, are in the course of trade, that is, are offered for sale and sold in Australia.  This is because the trade mark remains the trade mark of the registered owner (through an authorised user if there is one) whilst the goods are in the course of trade before they are bought for consumption.”

Thus, provided Barefoot Cellars was an authorised user, use of the BAREFOOT trade mark by the registered owner was established. The joint judges went on to hold that on the evidence Gallo had established that Barefoot Cellars used the BAREFOOT registered trade mark under the control of Houlihan whilst he was the registered owner of the trade mark.  If followed that Barefoot Cellars was an authorised user pursuant to section 8 of the Act.

The High Court Decision – the subsidiary issues

Use in good faith

Lion Nathan’s contention that the use of the BAREFOOT trade mark was not “in good faith” as required by the non-use removal provisions of the Act was rejected.  The joint judges held that in all the circumstances the use of the BAREFOOT trade mark was genuine and sufficient to establish the requisite use in good faith. However, the joint judges expressly said in paragraph 64,

“On the facts here, it is not necessary to decide whether a single use of a registered trade mark in good faith would have been sufficient to resist removal.” (citation omitted)

What trade mark was used?

The front label on the bottles of the BAREFOOT wine sold in Australia is reproduced below.

Lion Nathan argued that this was use of a trade mark consisting of the word BAREFOOT in combination with the device of a foot and not use of the registered trade mark. The joint judges referred to section 7(1) of the Act which provides that the Registrar or a court may decide that a person has used a trade mark if it is established that the person has used the trade mark with additions or alterations that do not substantially affect the identity of the trade mark.

The joint judges held that the device is an addition to the registered trade mark that does not substantially affect its identity.  This view appears to be based on the fact that the device is an illustration of the word. It accordingly followed the joint judges held that the use of the BAREFOOT registered trade mark with the device constitutes use of the registered trade mark in accordance with section 7(1).

The High Court Decision – the conclusion

The joint judges thus considered that Gallo had established the requisite use of the BAREFOOT registered trade mark during the statutory period with the consequence that Lion Nathan’s counter claim for removal of the BAREFOOT registered trade mark for non-use failed.

Implications

The decision of the joint judges on the principal issue is a welcome one. The bottles of the BAREFOOT wine had been sold to the German distributor without any limitation as to their destination. As the joint judges said in paragraph 51:

“A registered owner who has registered a trade mark under the provisions of the Trade Marks Act can be taken, in general terms, to have an intention to use the trade mark on goods in Australia. It is a commonplace of contemporary international trade that prior to consumption goods may be in the course of trade across national boundaries.”

It will be interesting to see how the reasoning of the joint judges is applied in determining use of a trade mark for the purposes of determining ownership of a trade mark in Australia for the purposes of sections 27 and 58 of the Act.

It is important, however, to note that the joint judges declined to decide the vexed question of whether a person in the position of Beach Avenue also uses the registered trade mark. In paragraph 53 the joint judges said:

“It is not necessary to decide whether by importation and sale Beach Avenue has also used the mark (as was found by the Full Court) because the only relevant question is whether the registered owner used the mark.” (citations omitted)

In relation to the subsidiary issue of “What trade mark was used?” it is interesting that the joint judges referred to section 7(1) of the Act rather than the almost identical provisions in section 100(3)(a) of the Act dealing specifically with non-use removal proceedings. It is also interesting that the joint judges treated the word BAREFOOT and the device of the foot as constituting a single combination mark and not two separate trade marks.  But perhaps most interesting are the following statements made by the joint judges on this issue in paragraph 69 without any express reference to substantially identical or deceptively similar trade marks:

“The monopoly given by a registration of the word BAREFOOT alone is wide enough to include the word together with a device which does not substantially affect the identity of the trade mark in the word alone. So much is recognised by the terms of s 7(1), which speak of additions or alterations which “do not substantially affect the identity of the trade mark”. Except for a situation of honest concurrent use, another trader is likely to be precluded from registering the device alone while the registered trade mark remains on the Register.”

CASE 2: Health World Limited v Shin-Sun Australia Pty Ltd [2010] HCA 13

On 21 April 2010, Health World Limited (Health World) succeeded to establish that it was ‘aggrieved’ within the meaning of sections 88(1) and 92(1) of the Trade Marks Act 1995 (Cth) (the Act). The High Court found that Health World had the requisite standing to challenge Shin-Sun Australian Pty Ltd’s (Shin-Sun) HEALTHPLUS trade mark given that the two companies were rivals in relation to the goods to which the mark applied.

The matter was remitted to the Full Federal Court for determination of the remaining issues.

It should be noted that the 2006 amendments to the Act have removed the requirement in section 92 that the applicant for removal of a mark be a person aggrieved.

Background

Both Health World and Shin-Sun were involved in the manufacture and supply of health products.  Health World began selling a probiotic powder called ‘Inner Health’ in 1991. Another similar line of product in tablet form called ‘Inner Health Plus’ was subsequently launched in 2001. In September 2001, Health World applied to register INNER HEALTHPLUS as a trade mark.

Shin-sun marketed and sold a range for products derived from bees, their wax and shark cartilage under the name of ‘HealthPlus’. On 7 May 2001, Shin-Sun applied for registration of HEALTHPLUS. Health World opposed that application, but following an earlier decision of the Federal Court , Shin-Sun’s application for HEALTHPLUS was registered.

Health World sought rectification of the HEALTHPLUS trade mark pursuant to section 88 on the basis Shin-Sun had no intention of using the mark in Australia and that it had allowed the trade mark to become deceptive or confusing.  It also contended rectification pursuant to section 92(1).

The High Court Decision

The High Court found the Full Federal Court erred in adopting the exhaustive test for standing from the case of Kraft v Gaines (1996) 65 FCR 104, which included the requirement that a rival have a desire, or intention to use the mark to qualify as a ‘person aggrieved’.

Instead, the majority of the court preferred a liberal construction of ‘aggrieved’ adopted in “Daiquiri Rum” Trade Mark [1969] RPC 600 (“Daiquiri Rum”) where Lord Pearce stipulated no requirement that the application for revocation desire or intends to use or could use the mark.

French CJ, Gummow, Heydon and Bell JJ emphasised that the Register of Trade Marks must have ‘integrity’ and should be maintained as ‘an accurate record of marks’.  However, this function must be balanced with the need to prevent ‘busybodies’ from making invalid applications for rectification and thus eroding the security of the Register. In this light the High Court concluded that the authorities favoured a liberal construction of ‘aggrieved’.

Hence the test for a ‘person aggrieved’ depended on whether the parties were trade rivals in respect of the goods with registered marks.

As Health World and Shin-Sun were rivals in selling health supplements, Health World was therefore a ‘person aggrieved’ for the purposes of sections 88 and 92(1) of the Act.

Crennan J concurred with the majority but differed in opinion with respect to the test enunciated by Lord Pearce in “Daiquiri Rum”.  Her Honour held that an ‘aggrieved person’ must be ‘affected’ by the erroneously registered trade mark.

Implications

Trade mark owners have improved standing and therefore better opportunities to challenge intellectual property registrations that are hindering their businesses.

On the flip side, owners of marks may now be at greater risk of having their intellectual property registrations and possibly administrative decisions favourable to them, being challenged.

Janice Luck is Senior Lecturer at the University of Melbourne Law School

Peiwen Chen is recent LLB graduate of the University of Melbourne Law School

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Who Owns the News?

August 12, 2010

By Rebecca Mouy and Jake Goldenfein

News Corporation recently announced that it was about to start charging for online access to its news. It says the future of old media in the digital age is that consumers will pay for online news content in a similar way as for hard copy ‘newspapers’ – and it seems to be far from alone in its plans. But is this a sound approach in legal and business terms?

On 8 July, IPRIA in association with the CMCL and Melbourne Business School (MBS) presented a seminar entitled ‘Who Owns the News’ chaired by Sam Ricketson. Mark Davison and Stephen King (respectively of the Monash Law Faculty and Faculty of Business and Economics) presented on legal and economic perspectives of the future of ‘the news’, and discussant Kwanghui Lim (from the MBS) offered a brief recap of each of the presentations along with some suggested business solutions available to news publishers. Speakers’ slides as well as the podcast for the seminar is now available here so the details will not be canvassed in depth here.

Ownership rights over news

Mark Davison outlined the legal framework for news ‘ownership’ in Australia, concluding there is little copyright protection available for news, especially in the wake of the High Court decision in IceTV Pty Limited v Nine Network Australia Pty Limited [2009] HCA 14 and its application of the Federal Court’s decision in Telstra Corporation Limited v Phone Directories Company Pty Ltd [2010] FCA 44 (see Michael Crawford’s article in an earlier edition of Fortnightly Review for analysis of this case). However, he argued that in the current climate Australia should not follow the US approach of ‘hot-news’ laws or the European database protection in an effort to protect ‘news’.

The ‘hot-news’ doctrine in the US provides a quasi property right in “breaking news” and posits that such news can be misappropriated, eg by other news services. Davison argued that the hot news tort followed in various US States (including New York) relies on vague criteria leading to substantial uncertainty. The European Union database protection laws, on the other hand, have provoked a great deal of discussion on the distinction between ‘collecting’ and ‘creating’ a database. After grappling with this issue for sometime, in 2005 an EC Commission report on database protection stated the net benefit of the law was unproven.

Given the unsuccessful legislative attempts to protect news abroad and the current state of flux in Australia, Davison suggests that the best course of action is not to rush hastily into legislative reform and in the meantime consider whether exclusive rights over information are desirable.

Can the iPad do for news what the iPod did for music?

A vital question facing current news services is how to survive in the age of digital publication and distribution. Economist Stephen King examined the drastic changes the Internet has effected upon the business model for news media organisations.

King discussed the changes digital distribution has brought to news production, mostly in relation to ‘convergence’. He raised the topic of news aggregators such as Google News, which allow users to search by topic and access articles from multiple sources. This gives users an effective tool for sidestepping on-line news providers who limit access to subscribers, and raised the ire of incumbent media outlets such as News Corporation. These aggregators demonstrate the quantity of professional and amateur content produced on-line, and liberate users from relying on established sources of information.

The potential pitfalls of such services are that consumers become more capable of choosing the news sources that support or reinforce individual prejudices. However, once the pretence that official news services provide more ‘objective’ information is jettisoned, it is difficult to maintain that access to more information is not beneficial to consumers. The more raw the source, arguably the less adulterated the information. Personal biases may be more prevalent, but articles can eschew the political or editorial line of an established media outlet. Arguably, numerous amateur sources provide a clearer picture than a single incumbent news service.

The net effect of the Internet upon news production, in King’s view, is thus a benefit to the consumer through increased access. Competition ultimately drives the cost consumers pay for news to nothing. King proposed that in future, consumers might only pay for ancillary services or specialist commentary (perhaps something along the lines of The Economist) rather than factual news.

In this context, he referenced the position of Rupert Murdoch that the ipad will save the newspaper. However he pointed out that this raises the question of whether a specific interaction between a device and content can provide an experience a user is willing to pay for. Arguably, the comparison between the ipad and news with the ipod and music is flawed.

Prior to the ipod and itunes, obtaining music digitally was predominantly illegal, and users knew it. Itunes subsequently provided a service that adequately competed with piracy so that the financial detriment of sating one’s conscience was in-step with user expectations. While the ipad will offer attractive paid news services through specific subscription ‘apps’, there is no moral problem in obtaining free news from other services (also accessible form the ipad). Further, findings demonstrate that paid subscriptions or walls on online news are generally unsuccessful in raising revenue unless very niche. This leaves the difficult conundrum of what kind of business model may succeed for news publishers, and a discussion of the role of public broadcasters.

In discussion, it was suggested that public broadcasters (such as the BBC and ABC) are capable of providing quality journalism with the advantage of government endowment rather than relying on traditional revenue streams such as advertising. However, in response King argued there is little justification for investing taxpayer dollars in a service that is essentially equivalent to services provided by commercial broadcasters. He suggested it also raises questions of editorial independence, especially in reference to investigative journalism. However it was noted the independence of certain commercial publishers is equally questionable, and government endowments continue to produce quality investigative journalism.

Where to from here?

Kwanghui Lim suggested the following business options for news producers.

Close down: Lim suggested that the market is saturated and the only way forward for some newspapers will be to close down. He cited statistics from the Unites States that 42% of people say that they would not miss their newspaper much, and would find it easy to access their news in other ways.

Build complimentary services: This approach requires news producers to further develop current sources of revenue, namely advertising. Lim emphasised that in the current atmosphere, the majority of revenue is made through advertising and not subscriptions.

Fight back: Here news producers would fight against the challenge of the Internet by erecting pay walls or calling for subscriptions. Only a small number of publications have managed to do this successfully, including The Wall Street Journal, The Financial Times and The Economist.

Diversify: News producers could expand to become ‘media supergiants’ following the example of News Corporation. This would allow the substantial benefit of cross-marketing.

Reconfigure: follow example of the radio to create a new market for itself, for example recasting as a local newspaper.

For more from Kwang have a look at his post on the Core Economics website. There is also a good discussion of the issues on ipwars.com.

Concluding thoughts

The seminar provided excellent food for thought. As shifts occur in the market for news production, there is no doubt that legal and economic questions will be raised. What the seminar did not provide is answers – for the simple reason that there are no clear answers yet. Nobody knows which business model might be the most successful or which new technologies will shape the changes to come. If no business model emerges as the prominent or successful way to provide news online we will eventually face the question of whether copyright law is flexible enough to deal with the continuously changing conditions of online media.

Historically the price of news has always shaped the tone of content. When the first cheap newspapers emerged in the early 19th century, the consumer’s predisposition for ideological discussions, commentary on principles, and articles with political flavour were replaced by a developing interest in information and current events. With competition driving the cost to zero, this may equally drive professionally produced content away from in-depth investigation and commentary. As such, business models have been postulated where current events and information are free services, while niche commentary attracts subscription fees. However it is difficult to avoid the trend of competition pushing prices to nil.

Several audience members referenced the maxim that ‘good journalism has to be paid for’. While clearly there is a case for professional journalism, arguably the Internet has also provided a habitat for digital communities dedicated to exposing truths and bringing incumbent powers to account. While the form of content may be changing and the influence of established media dwindling, writers will always write and the modern obsession with sharing information will only grow.

Rebecca Mouy is an LLB candidate at the University of Melbourne.

Jake Goldenfein is an LLB graduate from the University of Melbourne.

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