Doing Business in Australia: Chapter 21 - Intellectual Property

Patents

An Australian patent gives the owner a legal right to prevent third parties from exploiting the patented invention in Australia. To obtain patent protection for an invention, a patent application must be filed in Australia. The invention must be new and inventive (when compared with what is already known) and useful. The Patents Act 1990 (Cth) provides for the filing, granting and enforcing of patent rights.

Standard patents have a life of 20 years from the date of application, subject to payment of renewal fees. An extension of up to 5 years can be granted for pharmaceutical patents. IP Australia regulates the grant of patents in Australia, including carrying out pre-grant examinations and adjudicating in pre-grant oppositions.

Australia is a party to the Patent Cooperation Treaty (PCT) which allows for a single PCT application to be used to file a patent application in a number of countries. However, Australian patent applications filed from a PCT must still undergo the same Australian examination processes as a standard patent application filed directly in Australia.

Trade marks

Trade marks can be used by the owner as a marketing tool and enable brand protection, particularly if registered. The owner of a trade mark that is used or intended to be used in Australia may apply to IP Australia to register the trade mark under the Trade Marks Act 1995 (Cth). Registration is available for trade marks in respect of goods and/or services. Trade marks are registered for use in one or more ‘classes’ of goods and/or services, and the application must specify what goods and/or services are to be covered. To qualify for registration, a trade mark must be capable of distinguishing the applicant’s goods and/or services from those of other persons. An Australian trade mark is registered for an initial 10-year period and is renewable (subject to payment of renewal fees) for additional 10 year periods thereafter, but third parties may apply to have a registration removed for long periods of non-use.

Although registration of a trade mark is not compulsory, an unregistered trade mark is more difficult to protect and enforce unless a substantial reputation has been built up in the mark. Advantages of registration include the fact that registration provides the proprietor with a statutory right throughout Australia to take action against unauthorised users or infringers of the trade mark without the need to prove reputation.

Australia is a party to the Madrid Protocol relating to international registration of trade marks. Australian trade mark applicants can therefore file a single international application in a number of countries around the world based on their Australian application.

While not an IP right as such, businesses trading in Australia should consider registering domain names ending in ‘.au’ that relate to their trade marks and business names, if they are able to satisfy the .au eligibility requirements.

Businesses must also ensure that they register any business names of entities through which they trade in Australia, where those names are different to the entity’s corporate name.

Copyright and moral rights

Australian copyright law encourages businesses to develop new material by offering protection to original, creative works. Under the Copyright Act 1968 (Cth), copyright protection for original artistic, literary, dramatic, musical and other works, sound recordings and cinematographic films is automatic (if qualifying criteria are satisfied). In Australia, it is not necessary (or possible) to ‘register’ copyright.

The range of materials protected by copyright is diverse and can include, for example computer programs, graphs, videos, broadcasts, training manuals, price lists and product brochures. The duration of copyright protection varies depending on the type of material being protected. Generally, copyright protection in literary, dramatic, musical and artistic works subsists for the life of the author plus 70 years. 

The Copyright Act 1968 (Cth) also gives individual authors of most copyright works and subject matter certain 'moral rights' in relation to their work. Moral rights include the right to be identified as the creator of a work, to not have authorship falsely attributed and to prevent derogatory treatment of a work. Moral rights cannot be assigned, but consents can be given by the authors to not being attributed as author, and to treatment of the copyright material that may otherwise be derogatory. Moral rights generally continue in force until copyright ceases to subsist in the underlying work or subject matter.

Registered designs

Industrial designs may be protected against copying under the Designs Act 2003 (Cth), which provides protection for the overall appearance of a product, including its shape, configuration, pattern and ornamentation, provided the design is new and distinctive (based on designs previously used in Australia or published in the world). Design registration does not protect how a product works. Protection lasts 10 years, provided renewal fees are paid.

IP Australia will conduct a formalities check on a new design application prior to registration. Enforcement may occur only after the issue of a certificate of examination, upon request – registration alone does not give an enforceable right.

Any copyright in a design is generally lost if the design is embodied in a product and ‘industrially applied’, or if the design is registered under the Designs Act 2003 (Cth).

Plant breeder’s rights

The Plant Breeder’s Rights Act 1994 (Cth) protects new plant varieties for up to 25 years for trees and vines, and 20 years for other plant types. It does not exclude the possibility of patent protection.

Circuit layouts

The Circuit Layouts Act 1989 (Cth) provides copyright-type protection for the original layout of an integrated circuit. Protection is automatic and lasts for 10 years from first commercial exploitation, if this occurs within 10 years from creation.

Confidentiality and trade secrets

Confidential information or trade secrets, such as a secret technology or process, may also be commercially valuable.

Secrecy as a form of protection may be chosen because, for example, the technology is not patentable, or publication is undesirable (as by filing a patent application, subject matter is made public, even if the application does not proceed to grant).

Secrecy could potentially extend protection beyond the life of a patent.

Protection is via strategies for keeping the information secret, supplemented by contractual and equitable obligations of confidence. As hacking and other security attacks become more common, it is important that strong internal processes and technical systems are developed and kept regularly up to date to ensure confidentiality. Business should also ensure that employees with confidential information or trade secrets understand and comply with their confidentiality obligations.

Some decisions of IP Australia in relation to the registration of IP rights, for example final decisions in opposition proceedings, can be appealed to the Federal Court of Australia.

Australian IP rights can be assigned, encumbered and licensed. Exclusive, sole and non-exclusive licences can be granted. Specialist advice should be taken before entering into an IP licence, to properly understand the licence being granted and ensure it gives the rights the licensee wants. For instance, in Australia, only completely exclusive patent licensees (who have been granted a licence to the exclusion of all others) can commence patent infringement proceedings.

Care must be taken before disclosing valuable IP to others. Without a non-disclosure or confidentiality agreement in place, the ability to obtain certain valid IP rights like patents and designs may be lost by disclosing unprotected inventions and designs to others. Ideally, applications to register IP rights should be made to IP Australia before they are disclosed to third parties.

The launch of products and services in Australia carries with it the risk of infringing the Australian IP rights of third parties. Conducting ‘clearance’ or ‘freedom to operate’ searches at an early stage in launch plans is recommended, as pre-existing local Australian IP rights may stand in the way of using your preferred brand, design or exploiting your invention.

In order to deal commercially with Australian IP (and to enforce IP), it is important to know who owns the IP. IP can be owned by individual persons and by companies. Sometimes IP rights are owned outright, sometimes there are multiple co-owners. IP rights may also be the subject of registered or unregistered security interests, or be subject to third party licences or encumbrances. It is sometimes complex to work out who owns a particular IP right and requires consideration of issues such as whether the IP right was generated in the course of employment or whether a third party consultant was involved.

Co-owners of IP can have different rights and limitations on their respective ability to use, exploit and enforce the IP, depending on the type of IP. Joint ventures, pursuant to which IP rights will be generated, require particularly careful drafting to deal with ownership of IP that is jointly created, and how the joint venture may use IP owned by the joint venture parties.

IP is a type of personal property. Accordingly, encumbrances over Australian IP are subject to the Personal Property Securities Act 2009 (Cth), and must be registered on the Personal Property Securities Register to avoid losing priority to other security interests.

IP rights are typically enforced by litigation in the Federal Court of Australia.

Subject to meeting certain threshold requirements, urgent interlocutory injunctions can be obtained to restrain infringing conduct pending final proceedings. Once you become aware of an actual or threatened infringement of your IP rights in Australia it is very important not to delay obtaining and acting on legal advice, because urgent relief is not available where there has been undue delay.

Remedies for infringement of IP rights include:

• damages or an account of the profits made by the infringer (you cannot get both);
• injunctions (interim and permanent);
• declarations of infringement; and/or
• orders that infringing goods be delivered up for destruction.

In litigation proceedings, written pleading documents set out the scope of the infringement (as alleged by the rightsholder) and any defences (relied upon by the alleged infringer). It is common for an alleged infringer to defend infringement proceedings by filing a written cross-claim seeking to invalidate the IP right in issue. The infringement claim, defence and any cross-claim for invalidity are typically heard together at trial, with these issues of liability being bifurcated from the question of any remedies. Questions of any remedies are typically dealt as a subsequent stage in the proceeding if required.

Proceedings are case-managed and heard by a single judge at first instance (with no jury).

The trial will usually involve any witnesses who have given a written affidavit appearing to give oral evidence and be cross-examined. Witnesses may be lay people, for instance giving evidence on commercial matters, or independent technical experts giving evidence to help the Court understand the relevant IP rights and associated issues of infringement and validity. If multiple expert witnesses are involved in the case, with overlapping areas of expertise, they may be required to produce a joint report prior to the commencement of the trial and, at trial, be cross-examined together in what is known as an ‘expert hot tub’. At the end of a trial, the judge will typically reserve judgment and deliver a written decision at a later date, after careful consideration of the evidence and submissions presented.

After judgment, the parties have a short period of time (usually less than one month) to decide whether to appeal the decision to the Full Federal Court (usually a panel of 3 judges, again with no jury).