Intellectual Property & Technology: 2023 Year in Review
Our Intellectual Property & Technology Team reflects on the year and the industry trends in 2023. The Team also looks forward as to what the next 12 months may have in store.
“The next 12 months should bring some new challenging legal issues to be tackled by businesses driven by intellectual property and/or technology. These legal issues will be influenced by societal and legal trends towards greater privacy and consumer protections, as well as the technological advances in generative AI. Businesses that inform themselves and tackle these challenges head-on will be better placed to adapt and take advantage of them.”
Tim Clark – Partner
It was a busy year for intellectual property enforcement, with the High Court of Australia delivering a highly anticipated judgement on the factors for trade mark infringement, while the Federal Court of Australia considered a number of cases that have the potential to influence how intellectual property is protected in Australia in 2024 and beyond. Towards the end of 2023, the Commonwealth Government announced its intention to establish a reference group to engage with stakeholders on the copyright issues raised by the use of artificial intelligence (AI).
The High Court’s long-anticipated decision on the utility of a trade mark’s reputation in infringement proceedings
In Self Care IP Holdings Pty Ltd v Allergan Australia Pty Ltd, the High Court of Australia held that reputation of a trade mark should not be taken into account when assessing whether the trade mark was infringed, except where expressly required by the Trade Marks Act 1995 (Cth). The Court’s decision has several potentially wide-ranging ramifications for brand owners. For example, a party may not be able to avoid infringing the rights of a third party simply by using its own well-known trade mark in conjunction with a sign that infringes the third party’s trade mark, because the reputation of the well-known mark should not be taken into account in determining infringement. On the other hand, it may become easier for owners of well-known trade marks to enforce their rights against alleged infringers because the level of fame (or notoriety) achieved by the owner’s trade mark may not be taken into account, in the marketplace except in very specific circumstances.
The lessons from various Federal Court trade mark decisions
Several Federal Court of Australia decisions in 2023 were of particular interest. In Seven Network (Operations) Limited v 7-Eleven Inc., the Court highlighted the importance of continuous, relevant use of a trade mark by an owner to protect its registration. The isolated use of a trade mark in a domain name, or on a small website banner is unlikely to suffice to demonstrate evidence of use of a trade mark. Trade mark owners should document, as much as possible, the degree to which they use (or license the use of) their trade marks.
The Pokémon Company International, Inc. of Nintendo (TPCI) ended 2022 by obtaining an interlocutory injunction against Pokemon Pty Ltd (PPL) to restrain PPL from distributing a range of Pokémon-inspired Non-Fungible Tokens without TPCI’s permission. This highlighted the need for intellectual property owners to actively monitor the broad marketplace for potential infringements and to take action quickly to prevent or minimise the damage caused by infringement.
In February 2023, the Federal Court decided Brick Lane Brewing Co Pty Ltd v Torquay Beverage Co Pty Ltd. The Court’s decision demonstrated the difficulties in enforcing unregistered trade marks and, as noted in our insight here, is a timely reminder of the importance of registering trade marks for new brands.
As detailed in our insight article here, although the subject of an appeal, the Federal Court’s decision in Cantarella Bros Pty Ltd v Lavazza Australia Pty Ltd is important for several reasons. The Court held that a party using a trade mark that combines several elements into one could infringe another party’s registered trade marks if one of the elements is held to be a standalone trade mark that conflicts with the other party’s registered trade mark. The Court also held that a trade mark comprising a foreign word may not be inherently adapted to distinguish the goods for which the trade mark is registered if that foreign word has been received into the “common heritage” of Australian English and has a commonly understood and shared meaning by a significant proportion of the Australian public.
Addressing the intellectual property challenges of artificial intelligence
AI has become very prominent over the last 12 months, with the rise of the use of ChatGPT and alternative products. The increasing use of AI has challenged lawmakers both in Australia and overseas in relation to intellectual property ownership and enforcement.
Early in December, the Government announced the establishment of a “copyright and artificial intelligence (AI)” reference group to engage with stakeholders regarding the copyright issues raised by AI, including the material used to train AI models, transparency of inputs and outputs, the use of AI to create “imitative works” and whether and when AI-generated works should receive copyright protection. The reference group will be administered by the Attorney-General’s Department and more information about the reference group is expected to be released in early 2024.
Unfair contract terms
This year saw significant changes to the Unfair Contract Terms regime under the Australian Consumer Law protecting “small businesses”. From 9 November 2023 onwards, parties seeking to enforce new and renewed standard form contracts that include “unfair contract terms” are now at risk of attracting significant penalties, the maximum being in excess of $50 million per contravention.
The scope of businesses to which the unfair contract terms regime applies is significantly expanded so that a business employing less than 100 people or with an annual turnover of less than $10 million may be regarded as being a “small business”.
Given the common use of standard form contracts in the IT sector, it is important that business give increased attention to reviewing contracts for unfair contract terms.
2023 was a significant year for the development of generative AI with several companies like OpenAI and Google for example introducing updated AI models with a significant jump in capabilities.
Following widespread adoption of AI by businesses, several jurisdiction around the world have introduced legislation to govern the use of AI, one such recent example being the EU. The Australian government has indicated that it too is working on legislation regulating AI. We expect to learn more next year.
Privacy and Data Security
In February 2023, as outlined here in further detail, the Attorney-General’s Department released its comprehensive review report into Australia’s Privacy Act 1988 (Cth). The review report outlined 116 proposals to amend the Privacy Act, including proposals to broaden the definition of “personal information”, the introduction of a new “fair and reasonable” test for the collection, use and disclosure of personal information, tightening the timeframe for notifying data breaches, and allowing individuals to object to the collection, use and disclosure of personal information.
In September, the Government issued its response. After considering the Report and public submissions in response to the Report, the Government indicated that it ‘agreed’ or ‘agreed-in-principle’ with 106 of the 116 proposals, providing a clear indicating of its intention to pursue stronger privacy protection regulation. Going forward into next year, we anticipate draft legislation being developed focusing on the 38 proposals the government has agreed with, with simultaneous further consultation with stakeholders in regards to the 68 proposals the government agrees with in principle. To read more about what proposals the government agrees with and what may be expected in upcoming legislative reforms, the first of which the government has indicated can be expected in 2024, please see our insights article on the topic.
In November, the Government also announced its 2022-2030 Cyber Strategy. Under the new Strategy, the Government intends to implement six “Shields” to help protect Australians from cyber attacks. As explored in further detail in our insight here, the Government has set out an intention to introduce a no-fault, no-liability ransomware reporting obligation, as well as changes to key pieces of legislation to improve the cyber resilience of Australia’s critical infrastructure.
The Adelaide team was pleased to announce the admission of Laura Coppola, Lawyer in the Adelaide Office. The Melbourne team was pleased to announce the admission of JD Hohmann, Lawyer, and celebrated the promotions of Jamin Li to Senior Associate and Craig Subocz to Partner.
We are grateful for the recognition we received from our clients and peers:
The Best Lawyers in Australia
In the 2024 edition of The Best Lawyers in Australia, 54 of Piper Alderman’s lawyers are recognised across 43 legal areas including the following from our Intellectual Property & Technology team:
- Tim Clark – Privacy and Data Security Law
- Tim O’Callaghan – Intellectual Property Law
- Craig Subocz – One to Watch: Information Technology Law & Intellectual Property Law
In the 2023 rankings for Doyle’s Guide, Tim O’Callaghan was recognised in the area of Intellectual Property / Technology, Media & Telecommunications in South Australia.
The Legal 500 Asia Pacific
In the 2023 edition of The Legal 500 Asia Pacific, Piper Alderman was recognised across 12 areas of law including Data Protection and Intellectual Property, with the following individuals recommended:
- Tim Clark – Recommended for Data Protection and Intellectual Property
- Tim O’Callaghan – Recommended for Intellectual Property
- Craig Subocz– Recommended for Data Protection
- Eilish Gigney – Recommended for Intellectual Property
The team was delighted to receive positive feedback from clients and contacts during the research process for the legal directories, including the following testimonials from the Legal 500 Asia Pacific Australia, 2023 edition:
‘Tim Clark and Jamin Li are very attentive and responsive to urgent needs. They have a unique ability to understand commercial drivers for a business and take a practical response to resolving issues.’
‘Clear, straight, fast and detailed advice.’
‘The level of service from initial introduction, briefing conversations through to provision of the services I requested was highly professional. The people I dealt with, especially Craig Subocz, were highly knowledgeable and skilled in their areas.’
‘Brings together the best mix of skills, expertise and experience to address the needs of the client. Very professional in every aspect of their work, responsive and timeliness of delivery is a strength when compared to other companies. This practice attracts very talented people.’
‘Tim O’Callaghan is highly personable and responsive. He brings a fresh perspective in delivery of services in the brand protection space.’
The Intellectual Property & Technology team provided several bespoke seminars throughout 2023 on intellectual property issues for clients, both in-person and online. Additionally, the team published a number of timely insights while partaking in client and industry facing events, sponsorships and partnerships.