E-commerce and the Law

Bond University

Semester 113

Today’s session

• Jamie White – About me

• Pod Legal – About us

• Context of today’s session

• Overview of Intellectual Property (IP)

• Securing IP Rights

• Doing Business Online

• Most Common Mistakes When Doing Business Online

• Online Risk Management

• Question Time

Jamie White: Who Am I?

• Former Tennis Professional (1989-2000)

• Bond Law Graduate (2005)

• Intellectual Property/Technology Lawyer

• Registered Trade Marks Attorney

• Solicitor of High Court of Australia

• Solicitor Director/Co-Owner, Pod Legal

Pod Legal: What We Do

• Intellectual Property Law

• Internet Law

• Technology Law

• Privacy Law

• Franchising Law

• Advertising and Marketing Law

• Commercial Law

Our Points of Difference

• Personal Service: delivered with enthusiasm and

passion.

• Leaders: We stay at the forefront of our industry.

• Transparency: we charge on a fixed-fee basis, deliver

value for money solutions and stick to our word, no

matter what.

We call this the ‘Pod Experience’

Context of today’s session

• Electronic commerce

• Social media

• Publication of material online

• Online communications

• Online advertising and marketing

• Doing any business online

Intellectual Property: Overview

What is Intellectual Property?

• Represents the property of your mind or intellect.

• In business, this means your proprietary

knowledge – a valuable component of success in

business today.

• This is often the “edge” which sets successful

companies apart from competitors.

• As the marketplace becomes increasingly

competitive, protecting your intellectual property

is essential.

Intellectual Property (continued)

Why is IP important to business?

Every business will have some form of intellectual property.

Examples:

• a unique product or design;

• manufacturing process;

• innovative idea;

• a distinctive name or logo; and

• original documents.

Intellectual Property (continued)

Why is IP important?

• Businesses are becoming increasingly aggressive in gaining market share.

• Businesses with a competitive edge stand out from the rest.

• Building effective strategies around your IP will give a major, sustainable advantage.

• Successful businesses place their IP alongside other assets on the balance sheet.

Intellectual Property (continued)

Protection of IP

• The most common types of IP are copyright,

trademarks, patents, designs and trade secrets.

• Today’s focus will be on copyright and trade marks.

• IP laws enable owners, inventors, and creators to

protect their intellectual property from unauthorised use.

• IP is an asset that can be bought, sold or licensed.

• What does an IP Lawyer typically do?

Copyright

Protects the original expression of ideas, not the ideas themselves.

Copyright automatically protects your original works of art and literature, music, films, sound recording, broadcasts and computer programs from copying and certain other uses.

Not registrable in Australia (what about the U.S.?)

Does not protect against the independent creation of similar works.

Legal position (re: employees and contractors).

Use of copyright notices.

Copyright (cont)

Typical Business Copyright

Examples:

• Business manuals and policies;

• Images, photographs, artwork (E.g. PodToons);

• Advertising copy, promotional literature, jingles;

• Template agreements, precedents;

• Websites/website content;

• Computer code and documentation; and

• Plans.

Trade Marks

What is a trade mark?

A trade mark may be a word, phrase, letter, number, scent, shape of an object, logo, picture, symbol, colour, aspect of packaging (get-up) or any combination of these.

A trade mark is used to distinguish the goods and services of one trader from those of other traders.

Trade Marks Act 1995 (Cth)

Trade Marks (cont)

A trade mark cannot be:

A sign which other traders are likely to wish to use in conjunction with their similar goods and services;

A geographical name or common surname;

Scandalous or its use contrary to law;

Likely to deceive or cause confusion; or

Substantially identical or deceptively similar to a prior trade mark application or registration in relation to the same, similar or closely related goods and services (unless prior use of the trade mark can be shown).

Trade Marks (cont)

What is trade mark registration?

Trade mark registration grants its owner the legal right to exclusively use or control the use of the trade mark for the goods or services for which it was registered.

A registered trade mark can be protected against third party misuse or infringement.

Only a registered trade mark can benefit from protection under the Trade Marks Act 1995 (Cth).

The Value of IP

• Identify and record your IP;

• Protect and defend;

• Commercialise and add value to your IP;

• Valuation of IP;

• Balance sheet benefits; and

• Mergers/acquisitions/IPOs.

• See Business ‘Briefing Series, 20 issues on intellectual property’ (IP Aust/Institute of Chartered Accountants)

Securing Intellectual Property Rights

Trade Mark Applications

Should prospective trade marks be searched before

filing an application?

A comprehensive search of a prospective trade mark

should be conducted prior to filing a trade mark

application. This may avoid substantial expenditure being

wasted on an unsuccessful application.

Trade Mark Applications (cont)

A Trade Mark Search should be conducted to:

• discover any prior registered trade marks that may be

infringed by your proposed trade mark application; • discover whether any prior registrations or applications

may prevent the registration of your proposed trade mark;

• discover whether the proposed trade mark is likely to be successfully registered in Australia; and

• assess the likelihood of any third party common law claims.

Trade Mark Applications

The registration procedure

Step 1:

A trade mark application is lodged with IP Australia, the

responsible entity for the administration of trade marks in

Australia.

Trade Mark Applications (cont)

The registration procedure (cont)

Step 2:

• Once lodged, a Priority Date & Application Number are

allocated to the trade mark application.

• The Priority Date is that date the trade mark is taken to be registered from, once the registration process has been completed.

Trade Mark Applications (cont)

The registration procedure (cont)

Step 3:

• The application is then examined by an IP Australia

Officer (the Examiner) who may raise objection if the proposed trade mark is non-distinctive, substantially identical or deceptively similar to a prior registered trade mark, or is a prohibited trade mark.

• If the Examiner raises an objection, an adverse report will be issued. Opportunity will be given to you to respond to the report and alter the application as may be necessary.

Trade Mark Applications (cont)

The registration procedure (cont)

Step 4:

• If there are no difficulties with the trade mark, or once

the difficulties have been resolved, the trade mark will

be accepted for registration.

Trade Mark Applications (cont)

The registration procedure (cont)

Step 5:

• Upon acceptance for registration, the trade mark is

advertised in the Official Journal of Trade Marks. From

the day of publication, a three month opposition period

commences whereby members of the public can

oppose the registration of the mark on various grounds.

Trade Mark Applications (cont)

The registration procedure (cont)

Step 6:

• Assuming no opposition is made during that period, the

trade mark will be entered on to the trade mark register for a period of ten years upon payment of the registration fee.

• Should opposition be made, opportunity is again given to respond in defence of the trade mark, at a Hearing with a Registrar.

Trade Mark Applications (cont)

Use of the TM and ® symbols • You may use the ™ symbol prior to having your trade

mark registered in Australia. By doing so, it indicates that you intend to use the trade mark in association with the goods or services to which it appears.

• You may use the ® symbol prior to after your trade mark

is registered. When using the ® symbol, all representations that you make in relation to the trade mark must be true.

Trade Mark Applications (cont)

Completing a Trade Mark Application

• Applicant name; • Applicant address; • Address for service; • Representation of trade mark; • Specification of class/es; and • Class description/s.

Trade Mark Applications (cont)

Let’s have a crack! In pairs:

• Create a brand. • Create a product/service. • Complete a trade mark application.

• Applicant name, applicant address, address for service, representation of trade mark, specification of class/es and class description/s.

Doing Business Online

Trends

• A clear shift toward Internet based systems of e-

commerce…failure to complying with changing legal

rules can be fatal to business.

• Tendency to overlook legal issues in an electronic

environment.

• Consequence: legal risk.

Website Content

Four sources of website content:

1. Original material;

2. Assigned material (legally acquired);

3. Licensed material (consent); and

4. Stolen material (no consent).

Website Content

Areas of law relevant to online business include:

• Consumer protection laws • Privacy Act • Spam Act • Copyright Act • Trade Marks Act • Contract law • Common law

Website Content

Competition and Consumer Act

• The object of the Competition and Consumer Act is to

promote competition and fair trading and provide for consumer protection.

• The most common breaches of the Competition and

Consumer Act relate to conduct that is misleading or deceptive, or capable of misleading or deceiving.

Website Content

Privacy Act

• Website users have the right to know:

• What information is being collected about them; • How that information will be used; • Who that information will be disclosed to; • How to verify the accuracy of that information; and • How to access that information.

• Website users must be able to request that their

personal information is no longer collected or distributed.

Website Content

Spam

• Governed by the Spam Act 2003. • A person must not send, or cause to be sent, a

commercial electronic message that; • has an Australian link; and • is not a designated commercial message.

• Spam may comprise a single commercial electronic message.

Website Content

Spam (cont)

• Significant penalties apply:

• 2006: 5.5 million dollars (email) • 2009: 15.75 million dollars (SMS)

• The risk is real!

Website Content

Copyright

• Copyright is often infringed via the unauthorised use of

text and images. • However, third parties may be liable too:

• Cooper’s Case (MP3’s) • AFACT v iiNet (movie and music piracy)

Website Content

Copyright (con’t)

• Ownership of copyright

• The author of a work will be the first owner of

copyright in that work.

• Any exceptions?

Website Content

Copyright (cont)

• Copyright in works can only be transferred via written

assignment. • Verbal agreement to assign is not enough. • Consider ownership of photographs, logo design and

website.

Website Content

Trade Marks Act

Trade mark infringement takes place when one trader uses the trade mark of another trader creating the likelihood of confusion in the market place.

Website Content

Trade Marks Act (cont)

Examples of possible trade mark infringement:

• The display of a trade mark on a website linking to another website, falsely leading the website user to believe that an affiliation or association exists will be trade mark infringement

• Domain names • Google AdWords • Meta-tags • Unauthorised display of logos

Website Content

Contract Law

Example: • The offer of software for sale on a website

• The specific terms of use in relation to the software must be displayed and agreed to prior to the sale, or prior to opening the software package (shrink-wrap or click-wrap agreements).

Website Content

Passing Off

• Passing off is where one trader falsely passes off as

having an association with another trader.

• Usually used in relation to unregistered trade marks. • Usually asserted in conjunction with provisions of the

Competition and Consumer Act.

Case Study

Patchett v SPATA (UK)

• Facts: • SPATA (a trade org) made representations on its

website about the financial stability of its members. • SPATA suggested on its website that an additional

information pack should be considered. • Mr Patchett relied on the displayed information and

contracted with a member pool builder. • Pool builder became insolvent. • Mr Patchett brought an action in negligence against

SPATA.

• Outcome?

Case Study (cont)

Patchett v SPATA (UK)

• Fortunately for SPATA, the Web site also included a

suggestion that users of the Web site should consider the contents of an additional information pack.

• The Court held that this operated as a disclaimer against

the liability that would otherwise have arisen. • Warning!!

The Most Commonly Made Mistakes When Doing

Business Online

The Facts

• 39 per cent of businesses now have an online

presence.

• Tendency to overlook legal issues in the online

environment.

• Failure to comply with changing legal rules could

be fatal to your business.

Mistake 1:

Copyright Infringement

Mistake 1: Copyright infringement

• What is copyright?

– Copyright protects original expressions of ideas and

not the ideas themselves.

• What is copyright infringement?

– Copyright infringement takes place where another party does an act which infringes the exclusive rights of a copyright owner.

Mistake 1: Copyright infringement

• Examples of copyright infringement:

– Unauthorised reproduction of text and

images.

– Unauthorised reproduction of website legal

documents!

• Solution: Use your own material or obtain

a licence to use another person’s material.

Mistake 2:

Trade Mark Infringement

Mistake 2: Trade Marks

• What is a trade mark?

– Sign, shape, symbol, label, letter, word, slogan, scent,

sound, colour, aspect of packaging or a combination

of any of these.

• What is trade mark infringement?

– Where a person uses a trade mark that is

substantially identical with, or deceptively similar to, a

trade mark owned by another person.

Mistake 2: Trade Marks

• Examples of trade mark infringement:

– Unauthorised display of third party logos.

– Unauthorised use of a trade mark in a domain name or Google Adwords campaign.

• Solution: Obtain consent to use a third party trade mark.

• eBook: http://www.podlegal.com.au/downloads/ebook-trademarks.pdf

Mistake 3:

Deceptive Trade Practices

Mistake 3: Deceptive Trade Practices

• Consumer protection laws such as the

Competition and Consumer Act.

• Examples of deceptive trade practices:

– False testimonials.

– Leading consumers to believe that an

association or affiliation with another trader

exists when it doesn’t.

• Solution: Don’t mislead or deceive!

Mistake 4:

Breach of Privacy

Mistake 4: Breach of Privacy

• When collecting information about a person, that

person has a right to know:

– that the information is being collected;

– how the information will be stored;

– how the information will be used; and

– under what circumstances the information may be

disclosed.

Mistake 4: Breach of Privacy

• Solution: Prepare and implement a Privacy

Policy that is specific to your business practices.

• Article: http://www.podlegal.com.au/article-

importance-of-privacy-strategy.php

Mistake 5: Use of a Competitor’s Trade

Mark in your Google AdWords Campaign.

Mistake 5: Google AdWords

• What are Google AdWords?

– It’s a form of pay per click (PPC) advertising.

• Using a competitor’s trade mark in your

Google AdWords campaign may amount

to:

– misleading or deceptive conduct;

– trade mark infringement; and/or

– passing off.

Mistake 5: Google AdWords

• Solution: Do not use a competitor’s trade

mark in your pay per click advertising

campaigns.

• Article: http://www.podlegal.com.au/article-

tm-google-adwords.php

Mistake 6:

Violation of Spam Laws

Mistake 6: Violation of Spam Laws

• What is spam? – An electronic message that contains an invitation to

do business and that has been sent without the consent of a recipient.

• Big penalties apply:

– $5.5m in 2006 (213m emails) • Use of address harvesting software and no

recipient consent.

– $15m in 2009 (re SMS) • No recipient consent.

Mistake 6: Violation of Spam Laws

• How to comply with the Spam Act:

1. Obtain recipient consent prior to sending;

2. Identify your business as the sender; and

3. Provide a functional unsubscribe facility.

• Solution: Comply with the Spam Act.

• Article: http://www.podlegal.com.au/article-

spam.php

Mistake 7:

Overlooking Legal Aspects of Social Media

Mistake 7: Social Media

• Social media is just another medium for

publishing information and communications.

• Legal rules also apply to conduct relating to social media.

• Examples of the hidden costs of social media:

– Online defamation via Facebook (comments about a Policeman resulted in fines).

– Journalist’s employment terminated for offensive tweets during Logies (re Bindy Irwin).

Mistake 7: Social Media

• Solution: Don’t overlook legal issues associated with social media.

• Articles:

– http://www.podlegal.com.au/article-social-media-twits.php

– http://www.podlegal.com.au/article-defamation-online.php

– http://www.podlegal.com.au/article-facebook-promotions.php

Overall Solutions

• Assess and modify your conduct (if required).

• Display legal documentation:

– Terms of Use (website and Facebook page)

– Privacy Policy

– Spam Statement

– Purchase / Shipping Terms

– Refund / Cancellation Policy

– Upload Terms

Overall Solutions

• The benefits of legal documentation:

– Those engaging with you to do business online are made aware of laws and policy regarding your website and/or Facebook page.

– Disputes resolved efficiently and favourably.

– Liability associated with your website and/or Facebook page will be limited.

Take Action Now

• To reduce legal risk associated with your online

business practices, you should:

– consult an Internet / IT Lawyer (not a Property or Family

Lawyer) to review your online business practices;

– ensure that you display legal documentation, specific to

your online business practices; and

– not assume that all will be ok because you are doing

business in the online environment.

Take Action Now

• Article: http://www.podlegal.com.au/article-online-business-risk.php

• eBook: http://www.podlegal.com.au/downloads/ebook-your-website.pdf

Online Risk Management

Online Risk Management

Legal documents for use when doing business online:

• Terms of Use

• Privacy Policy

• Purchase Terms

• Upload Terms

• Membership Terms

• Refund Policy

• Facebook Terms of Use

• Spam Statement (best practice)

• See http://www.podlegal.com.au/store.php

Case Studies

Let’s pick on some random website owners.

• What legal documents do they display?

• Have they applied to register their trade marks?

• Are they exposed to legal risk?

• What now?

Question Time

Some past questions:

• What’s it like to be a trainee lawyer?

• To specialise or not specialise?

• Expectations of a young lawyer?

• Big firm or small firm?

• What are the working hours like?

• Traits of a good lawyer?

• Remuneration?

• The road to partnership?

Contact Details

• Email: jamie@podlegal.com.au

• Phone: 1800 POD LEGAL (1800 763 534)

• Mobile: 0404 019 400

• Web: podlegal.com.au

• Slides: slideshare.net/podlegal

• Facebook: facebook.com/podlegal

• Twitter: twitter.com/podlegal