Google Books, fair use and fair dealing

Posted by Nick Liau and Paul Kallenbach

Since the inception of the Google Books project in 2004, Google has scanned and digitised over 30 million books.  Google Books enables users to search for text within digitised books.  Users' search results return short extracts of books together with title and other bibliographical details.  Google's search engine can thus be employed to perform complex analyses of the Google Books database, for instance, by enabling users to search for how frequently certain words or phrases are used across time.  Users are not, however, able to view or download the full content of the books contained within the Google Books database.

Many of the books scanned during the project are protected by copyright.  Google did not seek the permission of all copyright owners before scanning those copyright works and incorporating them into the Google Books database. 

In The Authors Guild & Ors v Google, a number of publishers and authors sued Google for copyright infringement, asserting that Google's scanning and digitisation of books constituted a breach of copyright.  However, on 14 November, the United States District Court dismissed this action, finding that Google had not breached copyright, on the basis that Google's use fell within the 'fair use' defence under section 107 of the US Copyright Act.

The 'fair use' defence in the US is a broad-based defence to copyright infringement.  Whether a particular use is 'fair use' is assessed on a case-by-case basis; US case law tells us that, in general terms, a finding of fair use is more likely where:

·                the use of the material was educational, as opposed to commercial;

·                the original work had already been published;

·                only a small amount of the work was reproduced; and

·                the alleged infringer's use of the work is unlikely to affect the market or value of the original work.

In the Google Books case, the US District Court held that Google's reproduction of books did not infringe copyright on the basis of 'fair use' because:

·                Google Books is not a tool which can be used to read books – instead, it 'adds value to the original' due to the new search and analytical methods it makes available;

·                the proportion of each book which could be viewed by users was limited; and

·                the service was likely to enhance the sales of books by showing users small extracts of books, encouraging them to buy the original to read the whole text.

Australia's Copyright Act 1968 (Cth) lacks any equivalent broad-based 'fair use' exception.  Rather, the Australian Copyright Act sets out a number of narrowly defined 'fair dealing' defences, which include use of a copyright work for the purpose of news reporting, criticism or review, parody and satire, and study or research.

While, on its face, the 'study or research' fair dealing exception (in section 40 of the Australian Copyright Act) might appear to cover Google's activities in this case, this exception has been interpreted narrowly by Australian courts.  That is, it is not enough that the copied materials will ultimately be used for study or research purposes.  Rather, the party who is doing the copying must be the same party doing the study or research.  Thus, while a student's use of quotes obtained from digitised content stored on an online platform may well fall within the fair dealing exception, the platform's digitisation and communication of the content itself may not meet the requirement of being for the purposes of study or research.

This is a threshold issue under Australian copyright law – it simply does not matter how fair or reasonable the dealing may be, if the dealing does not fall within one of the defined 'fair dealing' (or other) exceptions under the Copyright Act, it will constitute copyright infringement. 

As we have previously discussed on this blog, there is ongoing debate in Australia as to whether it should follow the US and adopt a broad-based fair dealing exception.  The Google Books decision neatly illustrates the practical ramifications of the divergence between US and Australian copyright law in the area of exceptions to copyright infringement. 

As has been widely reported, Australia is currently involved in negotiations with eleven other countries, including the US, over the Trans Pacific Partnership (TPP) trade agreement. The TPP includes a large number of clauses devoted to intellectual property issues.  The negotiations are being conducted behind closed doors, but a recent draft of the agreement has been leaked via WikiLeaks.  The most recent available clause dealing with limitations and exceptions to copyright infringement is not prescriptive on the issue, which suggests that a broad-based fair use exception would not be inconsistent with the TPP (or at least with the current draft of the TPP).

The Winnebago appeal: why you should act promptly against persons trading off your reputation

Posted by Nicole Reid and Paul Kallenbach

Last year, we wrote about the Federal Court decision concerning the use by an Australian company of the name 'Winnebago' and the 'W' logo for its motor homes, without any association with or permission from the well-known US company that started using the branding first, Winnebago Industries Inc (Winnebago).

Since then, Knott Investments Pty Ltd (Knott) has appealed against the court's orders permanently restraining it from using the Winnebago name and logo in relation to motor homes on the basis that it had engaged in passing off and misleading or deceptive conduct. Although Knott was largely unsuccessful in its appeal, it was able to secure a reduction in the extent of the relief awarded to Winnebago. Knott is now entitled to continue to use the Winnebago branding, subject to certain conditions.

Estoppel, acquiescence and delay

On appeal, Knott argued that Winnebago's failure to commence litigation in relation to Knott's use between 1985 (when Winnebago first learned of Knott's use of Winnebago's branding in Australia) and 2010 was a barrier to Winnebago now securing relief. The Full Federal Court found that Winnebago's conduct and the terms of the settlement agreement entered into by the parties in 1992 were not sufficient to give rise to a reasonable belief that Winnebago had accepted Knott's use of the Winnebago branding in Australia. Although the terms of the agreement were uncertain, Knott continued to use the Winnebago branding at its own risk and without any assurance that Winnebago would not enforce its rights in the brand against Knott in the future.

However, as discussed below, the fact that Winnebago had delayed in taking any action against Knott was relevant to the Court's findings on the appropriate relief.

Knott's Australian trade mark

Knott also appealed against the primary judge's decision to cancel its registration in Australia of the 'Winnebago' logo. This element of the appeal failed. The Court found that the primary judge had been correct in finding that use of the mark was contrary to law because it amounted to passing off, given Winnebago's reputation in Australia.

Knott also failed in its argument that the primary judge's discretion should have been exercised in favour of Knott, on the basis that it was Winnebago's inaction that caused any deception or confusion in the minds of the public. The Court found that Knott had also contributed to the deception and confusion, by deliberately adopting the Winnebago name and taking certain steps to associate itself in the minds of the public with the US brand. Therefore the decision to cancel Knott's trade mark was appropriate.

Relief

The Court pointed out that, since 1978, Knott had built up a substantial business in Australia without the interference of Winnebago. Although it is likely that Knott was, to some extent, assisted by the growing reputation of Winnebago's own vehicles around the world, the Court also stated that it would be unjust to ignore the contribution made by Knott itself in building up goodwill in the Winnebago brand in Australia.

Consequently, the Court held that Knott should be entitled to continue to use the Winnebago branding, as long as relief could be fashioned that would protect the public from being deceived about any connection between Knott's vehicles and Winnebago, and protect Winnebago's own trade reputation.

The Court set aside the primary judge's order restraining Knott from selling motor homes under the Winnebago branding. Instead, it ordered that Knott be required to use a disclaimer in its advertising and on its vehicles stating that the vehicles are 'not manufactured by, or by anyone having any association with, Winnebago of the United States'. Such a disclaimer must be used clearly and prominently so as to protect members of the public from being misled. The Court did not, however, agree with Winnebago that the disclaimer must be of equal prominence to the Winnebago name itself, as that would not properly take into account the entitlement of Knott to use the name in light of its own contribution to its Australian reputation.

The Court also ordered that Knott be required to ensure that each person who bought or hired one of its vehicles signs a form stating that he or she has been notified of the disclaimer. Although recognising that such an order would be 'novel', the court found that it was appropriate in order to ensure that, to the extent possible, members of the public would not be deceived about the trade origin of Knott's vehicles.

The extent of the damages to which Winnebago is entitled, if any, will be the subject of a further hearing.

As we said in our earlier article, this case illustrates some of the difficulties for overseas companies in preventing Australian businesses from trading off their reputations if the overseas company has not taken action to carry out business in Australia itself. The significant reduction by the Full Federal Court in the relief awarded to Winnebago reinforces the practical difficulties caused by waiting a long time before taking action against an Australian infringer that has been given time to build up its own separate goodwill - and legal rights - in the overseas company's brand.