Jurassic Park's dinosaur wrangler validly sacked for 'grossly offensive and disgusting' Facebook comments

Posted by Rory Jolley and Michael Tehan

The Fair Work Commission has again this week confirmed that employers may validly sack employees for injudicious use of social media use – whether at work or not.   The message to employees is clear: you need to think carefully before making comments on social media relating to your employment.

Cameron Little had been employed with Credit Corp Group Ltd (Credit Corp) for over three years when he chose to use his Facebook account to criticise an organisation, Christians Against Poverty (CAP), with which his employer had professional dealings. Mr Little did not identify himself on Facebook as an employee of Credit Corp; rather he held himself out as a 'Dinosaur Wrangler' working for 'Jurassic Park'.

Credit Corp's business involved the collection of consumer debt that had been written off by the original lender.   CAP was a third party organisation which assisted its clients with their debt obligations (and dealt with Credit Corp in this context).

On 27 June 2013, while on annual leave, Mr Little posted on the CAP Facebook page:

For reals bro, you should put a little more of funding into educating consumers on how the world works rather than just weaselling them out of debt, blah blah blah, give a man a fish/teach a man to fish.

He also posted:

No thanks, just take my advice and try to educate people about things like 'interest' and 'liability' rather than just weasel them out of contracts. #simple

CAP was able to identify Mr Little as an employee of Credit Corp.  Despite Mr Little's listed occupation, he had, some six days previously, posted the following on Facebook:

On behalf of all the staff at The Credit Corp Group I would like to welcome our newest victim of butt rape, Jack Hoye. I'm looking Forward to sexually harassing you behind the stationary cupboard big boy.

Not surprisingly, CAP alerted the business as to the circumstances, and Mr Little's employment was terminated shortly afterwards.   Mr Little subsequently lodged an unfair dismissal application.   In defending himself, Mr Little stated (amongst other things) that he thought his Facebook page was private.   He conceded, however, that other employees of Credit Corp were among his Facebook friends.

In finding that the dismissal was not unfair, Deputy President Peter Sams noted that Credit Corp had policies dealing with and prohibiting the kind of conduct engaged in by Mr Little.  He indicated, however, that it would not have mattered if the situation was otherwise.   He stated that written polices were hardly necessary for an employee like Mr Little to recognise that his comments about CAP were likely to damage his employer's reputation, and that the 'deeply offensive' sexual comments made about the new employee were 'grossly offensive and disgusting'.

Deputy President Sams also found that the fact that Mr Little made the Facebook comments in his own time was of no consequence, as it was not when the comments were made that was important, but the effect and impact of those comments on the employer and on other employees.  He stated that, whilst Mr Little was perfectly entitled to hold and express personal views, he could not do so in a manner which adversely affected his employer's reputation and viability.

Finally, Deputy President Sams stated that he had trouble accepting that Mr Little believed his Facebook page was private.   In any event, he said, the maintenance of the page's privacy settings were Mr Little's responsibility.   This follows from the clear warning delivered by a Full Bench of the Fair Work Commission in last year's Linfox case when rejecting an appeal against a finding that a dismissal for certain offensive Facebook comments was unfair. In that case, the Full Bench stated:

It is apparent ... that the findings of the Commissioner as to the Applicant’s understanding about the use of Facebook were an important part of the circumstances taken into account in concluding that the dismissal was unfair. It is also apparent that, with increased use and understanding about Facebook in the community and the adoption by more employers of social networking policies, some of these factors may be given less weight in future cases.

This case is one more in a growing body of case law developed by the Fair Work Commission relating to the discipline of employees in relation to their use of social media.  It is now beyond doubt that discipline may be appropriate where comments made online are sufficiently injurious to an employer.  Of course, it would be better if such comments are not made at all.  To minimise this risk so far as possible, an employer should have in place a good social media policy, and ensure that its staff are properly trained.  Should anything untoward then occur, the employer will be well placed to appropriately deal with the situation.

Enforcing IP rights globally - evidentiary challenges

Posted by Matt Davies and Paul Kallenbach

The recent decision of the Australian High Court in Aristocrat Technologies Australia Pty Ltd v Global Gaming Supplies Pty Ltd [2013] HCA 21(Aristocrat) serves as an intriguing illustration of the evidentiary challenges confronting those seeking to enforce their intellectual property rights in a global marketplace.

The somewhat complex facts involved the manufacture and refurbishment of pokies machines in Australia by the respondent (Global) which were sold to purchasers located principally in South America.  The applicant (Aristocrat Tech) alleged that infringing copies of its computer programs (constituting the games and the artwork displayed on the gaming machines) were contained within the refurbished machines. 

Interestingly, of the 54 impugned export transactions identified by Aristocrat Tech, which involved some 618 pokies machines, there was no evidence identifying precisely which components in each machine were allegedly infringing. This was the case even following the execution of search orders in respect of Global's premises.

In an attempt to overcome this evidentiary hurdle, Aristocrat Tech tendered a number of business communications, including 6 email chains between Global and certain international purchasers. These emails were described on appeal as 'essential' to the primary judge's reasoning process and His Honour's conclusion that, although their content did not reveal an offer to act in a manner constituting an infringement of the Copyright Act, it did indicate a 'willingness to assist the "serial counterfeiters" in South America in carrying out their actions'.

On appeal to the Full Federal Court, Global argued, and the Full Court held, that use of the emails to demonstrate the credit of the witnesses and the existence of a joint venture which involved the production and sale of infringing pokies machines amounted to tendency evidence.  This finding was made notwithstanding the absence of the term 'tendency' in the primary judge's written decision.

Section 97 of the Evidence Act 1995 (Cth) creates a general rule excluding the use of tendency evidence with exceptions when evidence is considered by the court to be of 'significant probative value' and provided that strict notice requirements are complied with.  As Aristocrat Tech did not recognise that the evidence it adduced was tendency evidence, the notice requirements were ignored and consequently, on appeal to the Full Court, the evidence was ruled to be inadmissible.

The importance of this case is underscored by the High Court's decision to refuse special leave yet still publish reasons for its decision (something it is not required to do).  In finding the decision made by the Full Court to have been reasonably open, the joint judgement of the High Court stated: 'it would be difficult to find a clearer indication of the use of evidence as indicative of a tendency'.

Aristocrat provides a reminder of the strict requirements accompanying the use of tendency evidence, and that the assessment of whether evidence is being adduced to establish a tendency will be a matter of substance over form.  It is also highlights the practical evidentiary hurdles facing those seeking to enforce their intellectual property rights globally.

Apotex v Sanofi-Aventis continued: High Court upholds patentability of methods of medical treatment - but finds no infringement

Posted by Nicole Reid and Paul Kallenbach


Image courtest of opensourceway

The High Court has handed down its decision in the litigation between Sanofi-Aventis and Apotex. The case concerns Apotex's proposal to sell a generic version of Sanofi-Aventis' leflunomide drug, ARAVA®, for which Apotex obtained registration on the Australian Register of Therapeutic Goods (ARTG).

 

The background to this case is set out in our post on the first instance decision.   In brief, Sanofi-Aventis had a patent for the compound leflunomide, which expired in 2004.   It also obtained a secondary patent that claims a method of preventing or treating psoriasis using leflunomide (Patent), and its infringement proceedings against Apotex relied on that Patent.  Leflunomide is used in Australia to treat psoriatic arthritis and rheumatoid arthritis, but not psoriasis alone, and these were the indications for which Apotex's generic version was approved.   However, psoriasis and psoriatic arthritis are now understood to be related disorders, and almost all patients with psoriatic arthritis will have, or are likely to develop, psoriasis.   The administration of leflunomide will treat both disorders.

 

In the first instance proceeding, Apotex raised a number of invalidity challenges against the Patent in addition to asserting non-infringement.   However, Apotex only asked the High Court to consider:

• whether the Patent was invalid on the basis that it was not a 'manner of manufacture' within the meaning of section 18(1) of the Patents Act 1990 (Cth), because it was a method of medical treatment; and
• if the Patent was valid, whether Apotex had infringed the Patent.

 

Manner of manufacture

 

A majority of the High Court held that the invention the subject of the Patent was a manner of manufacture, upholding the view of the Full Federal Court (the majority of which had regarded this position as 'representing orthodoxy in Australian patent law').

 

In separate judgments, Chief Justice French, and Justices Crennan and Kiefel, reviewed the history and earlier judicial interpretation of the 'manner of manufacture' requirement, and held that methods of medical treatment were patentable manners of manufacture.   Chief Justice French found that, despite statements by some courts that methods of medical treatment were not patentable, the judicial authority evidenced no 'clear and consistent foundation' for their exclusion.

 

Justices Crennan and Kiefel (with whom Justice Gageler largely agreed) listed a number of reasons for their view, including, 'critically', the lack of a distinction on economic or ethical grounds between product claims and combined product/method claims (which are patentable), and method claims.

 

The majority of the Court applied the test that, in order to be a manner of manufacture, the invention not be 'essentially non-economic', and pointed to the economic interest in ensuring that individuals are fit and healthy.   It was, however, noted by the Court that methods of medical treatment that are do not constitute use of a pharmaceutical product (for example, procedures used by medical staff in physically treating patients) may still fall outside the scope of what is patentable on the basis of this test.

 

In dissent, Justice Hayne held that a method of prevention or treatment of human disease is not a manner of manufacture, on the basis it does not have its own 'economic utility'.   His Honour interpreted previous authority as requiring that, in order for a method to be patentable, the method itself must have economic utility (as distinct from the outcome of applying that method having economic utility).   This sets a higher bar than the 'essentially non-economic' test applied by the rest of the Court.   In Justice Hayne's view, the effect of using a medical treatment on an individual is personal to that individual, and can only indirectly be said to have an economic effect, by enabling that individual to make a more valuable contribution to economic activity.

 

Infringement

 

The Full Federal Court had held that Apotex had infringed the Patent under section 117 of the Patents Act, which deals with indirect infringement.   Section 117 provides that the supply of a product to a person: 

• for any use to which the supplier has reason to believe the person will put the product; or
• in accordance with any instructions for use of the product, or inducements to use the product included in advertising,

will also infringe a patent if that use of the product by the person would infringe the patent.

 

Apotex's product information document, as approved under the Therapeutic Goods Act 1989 (Cth), stated that its drug was to be used for the treatment of rheumatoid arthritis and psoriatic arthritis, and expressly stated that its use to treat 'psoriasis that is not associated with manifestations of arthritic disease' was not indicated.   Despite this, the Full Federal Court held that Apotex's supply would be infringement under section 117 because it would treat any psoriasis that the patient had, even if it was not administered for that purpose, and almost every person who has psoriatic arthritis will also have or develop psoriasis.   The Full Federal Court also found that Apotex had reason to believe that its generic leflunomide product would be used to treat psoriasis, even though this was not listed as an indication.

 

The High Court overturned this decision on infringement.   It held that the Patent would not be infringed by a person who administered Apotex's leflunomide product for the purposes of treating a condition other than psoriasis, and section 117 could not render Apotex liable for contributory infringement where there was no primary infringement.   The High Court also placed weight on the fact that Apotex's product was registered on the ARTG only for the indicated uses (namely, psoriatic and rheumatoid arthritis).  In that context, it could not be said that Apotex was either instructing or inducing people to use its product in accordance with the patented method, or that it had reason to believe that they would do so.

 

This decision is valuable because it is the first High Court decision confirming that methods of medical treatment are patentable manners of manufacture, in the face of some lingering doubts from earlier case law.  Even though the Patent was upheld, however, the two decisions of the lower courts finding infringement were overturned.  The High Court gave Sanofi-Aventis' secondary patent a narrower scope of operation, meaning that generic pharmaceutical manufacturers may be able to circumvent method patents by drafting their product information documents to specifically exclude the patented use.

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.

The vexed issue of 'orphan' copyright works

Posted by Genevieve Watt and Paul Kallenbach

The application of copyright law to works for which the rights holder (or holders) cannot be found (so-called 'orphan works') is a question that has recently been under consideration in several jurisdictions. Given the ease with which works can be de-identified when reproduced or transmitted using digital means, this is not surprising.

In many jurisdictions, orphan works have been in a state of limbo in which it is not possible to obtain permission to legally use them, nor to work out whether copyright may in fact have expired.   Those who may wish to use orphan works are, for this reason, usually left to adopt a 'risk management' approach of weighing up the benefit of using the works against the risk of a potential infringement action.

Privacy Commissioner's draft APP guidelines - white papers

Posted by Paul Kallenbach

The Privacy Commissioner has released the first two tranches of draft guidelines on the new Australian Privacy Principles (APPs) for consultation purposes.  The new APPs come into effect on 12 March next year.

Minter Ellison's Privacy team has produced white papers on each of these draft guidelines, which analyse them in detail, highlighting issues or concerns raised by them, and outlining what will happen next.

You can download our white paper on the first tranche of draft APP guidelines here, and on the second tranche here.