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[ insert obligatory Clash of the Titans headline, although this is more a David v Goliath story… ]

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Are these logos deceptively similar?

I was asked for a comment yesterday about a story that the Rugby Leage team the Gold Coast Titans have opposed the registration of a trademark by the Canterbury Titans, an under-14s Rugby Union team.

A quick search of the ATMOSS register shows that there are quite a few organisations using a name in the form ”<description> Titans”. I suggested that the word 'Titans' in this context is fairly generic, and that I couldn't see a high likelihood of confusion.

What makes this strange is that the Gold Coast team don't appear to mind people using their likeness:

We encourage lots of junior clubs to use the Titans name and colours . . . but we can't allow a business to register a trademark that is so similar to ours.

I see some generic similarity, in that both logos use the word 'titans' and both have a stylised helmet in the name. Beyond that, I'm not sure that Gold Coast have such a strong claim. What do you think?

Compare the image of the US Stone Oak Titans, which certainly seems very similar to the Gold Coast titans:

I'm not convinced that a Rugby fan is going to be confused by two teams, from two different codes, with two widely differing financial and skill bases, sharing the same fairly generic team name. If that's true, should the Gold Coast Titans have a legally enforceable right to prevent the U14 team from using the name 'Titans'?

[ Reposted from the EFA site. ]

ContestedFooty.com, an AFL commentary blog run by some university students in Melbourne, has received a Cease & Desist letter from the AFL. The AFL allege that the blog infringes their intellectual property rights – both the trademarks and the copyright in the AFL and team logos and names.

This appears to be another example of Australia's trademark laws being used to stifle legitimate commentary and critique. There certainly does not appear to be any source of confusion as to whether the bloggers are officially sanctioned by the AFL or the teams in question. The bloggers are not trading off the AFL's reputation, or representing some false connection with the league. Certainly the trademarks do not appear to be used as trademarks; the marks are plastered on the guernseys of the players – it's hard to show a picture of an AFL player without also showing the marks.

As for the copyright claims, these seem even weaker. We do have fair dealing for criticism and review and for the reporting of news, defences which the bloggers would seem to fit within without trouble. The bloggers say that their photos are original and that they're not reusing unlicensed photos.

If the AFL's demands are respected, this imposes a substantial chilling effect on speech. At its limits, it means that all commentary on AFL must either (a) not refer to specific teams or show pictures of players; or (b) negotiate (and pay for) a licence from the AFL – presumably also opening the possibility that the AFL will dictate the terms or even content of the commentary.

Luckily, sport plays a much bigger role in the Australian psyche than that. It is likely that the claims being made by the AFL are somewhat inflated at best. We hope that the operators of ContestedFooty.com are able to respond to the AFL and continue providing valuable critical commentary.

This cautionary tale, however, shows the importance of reasonable intellectual property laws. Nobody wants a situation where fans are unable to talk about their favourite sports, but our current laws encourage trademark owners to make these sorts of claims. Unfortunately, when made against bloggers and students, contesting these claims often becomes prohibitively expensive. I believe that both copyright and trademark law need to be simplified to provide clear space for this type of commentary, allowing bloggers and others to stand up for their rights.

Today I attended a briefing session on ACTA hosted by the Australian Department of Foreign Affairs and Trade (DFAT). I felt it was a good meeting, and I really got the sense that DFAT were interested in public participation. There was a good deal of frustration on both sides of the fence – participants expressed serious concerns about the lack of transparency in the negotiating process, and DFAT consistently repeated that they were bound by confidentiality agreements and could not divulge details of the draft text of the agreement. Participants in the Tokyo round of negotiations agreed that the full text of the agreement will only be made available after negotiations have been concluded and the text finalised. Understandably, there were a number of members of the audience who were hesitant to accept any of DFAT's assurances as to the content of the agreement without access to the negotiation documents.

Overall, whilst I think that the process is far too secretive, DFAT appear to have gone a long way to make available what they can, and they seem genuinely interested in hearing from interested parties in Australia. Unfortunately, input will be limited (blind) until negotiations are complete and the text finalised, but DFAT assures us that they are considering the issues thoroughly and there will be genuine opportunity to debate whether or not to sign at the end of the process.

The big points I would take away from the meeting are:

• Negotiations will go 'well into 2009';
• The Commonwealth Government is not seeking to drive domestic changes through ACTA. Overall, there do not appear to be any great changes to Australia's enforcement regime – it appears to be more focused on affecting other states;
• The Government intends to limit the effect of any treaty to trademark infringement and commercial scale copyright infringement;
• However, statutory damages for copyright infringement are on the table;
• Next meeting, in December, will consider internet distribution;
• Camcording is likely to be criminalised;
• There's still time to make relevant submissions to DFAT – indeed, they release a substantial amount of information once they receive the draft proposals before every negotiation round;
• DFAT has a copy of the Cutler report.

When pressed about the secretive process, Dr Nicholas Rodgers from DFAT noted that “the procedure is not an unusual one in trade negotiations, although it is more generally applied to free trade agreements and sub-multilateral groups.” I asked Dr Rodgers what the justifications could be for keeping the negotiations confidential in an intellectual property agreement, as opposed to a trade agreement. Dr Rodgers responded that Australia was not an original proponent of the process, and did not support the secretive manner in which negotiations are taking place. However, Dr Rodgers noted that in order for Australia to 'be in the tent' – to be involved in the negotiations – we had to abide by the ground rules set down for initial participation. The rules allow for a limited consultative group to be established, but DFAT do not like to make text available to some interest groups and not the wider Australian population. This, at least, we can be thankful for, given that rights owners typically dominate these smaller focus groups in other countries.

It seems that DFAT are genuinely interested in hearing submissions from the public, and have tried, within the bounds of the confidentiality agreement, to seek input from the public about the negotiations. Dr Rodgers repeatedly stressed that, without disclosing the draft text, we could ascertain the boundaries of the agreement by 'reading between the lines' of the calls for comments posted on the DFAT website in preparation of each round. Proposed draft text is circulated to DFAT several weeks before the negotiation rounds, and DFAT appear to make a thorough effort to extract the contentious issues in their calls for submissions. It seems, then, that the list of issues so far released by DFAT would appear to cover the main points of the agreement.

Dr Rodgers told us that he expected negotiations to continue 'well into 2009', although he did expect that each of the draft proposals would have been tabled and discussed at least once by the end of 2008. There are still proposals that DFAT has not seen. Once the text is finalised, DFAT will hold comprehensive public discussions, giving opportunity for public and parliamentary comment on the text of the agreement before Australia signs. It was repeatedly stressed that Australia was not bound to sign – we negotiate 'without prejudice' – and that the decision whether to sign or not will not be made until after the text has been released. It was noted from the floor, however, that it is sometimes extremely difficult for parties who have been heavily involved in the negotiation process to refrain from signing after negotiations have been concluded, which implies that public consultation after negotiation will be too late to be effective.

This brings us to a consideration of the substance of the agreement. Peter Treyde, from the Attorney-General's Department, insisted that Australia was “not seeking to drive domestic changes” through the ACTA process. Dr Rodgers insisted that it was not the intent of the government to include copyright infringement which is not on a commercial scale – explicitly saying that there will be no ipod searches at the border. The treaty is geared to be 'TRIPS Plus', and as Australia is already 'TRIPS Plus', DFAT and AGD are not considering many substantial changes to our domestic law. The point of the treaty, from Australia's perspective, would be to seek adoption by our neighbours of the same type of enforcement regime that we have. Representatives from Customs and the Australian Federal Police agreed that Australia's enforcement and border protection measures are effective, and that there was no real need to change; rather, they would influence the discussions in order to endorse the measures we already have. There was some mention of increased data sharing between enforcement agencies.

Dr Rodgers outlined the three rounds of negotiation that have already taken place. The first round considered extending customs application for suspension scheme beyond that required by TRIPS, and DFAT considered that TRIPS is 'broadly appropriate' in this regard. Ex officio customs searches – without notification from the rights holder – have been raised, and the point was made that Customs already has such a right in certain circumstances. There was a particular focus on targeting materials exported from Australia, or in-transit. TRIPS requires focus on the prevention of imports, but Australian Customs has some powers that go beyond TRIPS. The aim of the first round appeared to be strengthening border measures to reduce international trade in infringing material, and DFAT seemed to suggest that Australian Customs currently already does a good job in this regard ('Customs currently intercepts hundreds of thousands of pirated items each year').

The second round, in Washington, considered pre-established or statutory damages for infringement. Proponents are seeking a statutory formula or presumption for both the calculation of damages and for an account of profits. There was significant discussion on this point, as Australia does not currently prescribe statutory damages for copyright infringement. Dr Rodgers noted that statutory damages “are indeed controversial measures in the United States”, and that despite the fact that Australia is a small country, we may have allies in other countries and have more influence than we could expect in negotiations with the US. Mr Treyde noted that the practice in the US has led US copyright owners to threaten 'housewives' with highly inflated statutory damages in order to force settlements, and noted that the “US has that in its legislation, but as far as that issue has been discussed, there is certainly no agreement as to whether or not that is the way to go. For Australia, it would cause problems at a fundamental level as to the powers of the judiciary to assess and award damages, and it would be difficult to carve out IP” from the general scheme for damages.

When pressed on whether statutory damages would be in the final text of the agreement, we were told, rather ominously, that “given that the main countries that do the drafting are the US and Japan, it would be informative to look at the legislation from those countries.”

Dr Rodgers said that the issue of statutory damages is one of the key issues that DFAT are interested in hearing submissions on. He noted that DFAT considered that Australia's proceeds of crime provisions are an important tool of deterrence “and quite an apt one”. This is hopefully an indication that Australia will oppose the inclusions of statutory damages in the negotiation process.

This is probably the most significant piece of information to come out of the meeting today. It appears likely that the US will seek to have other countries adopt statutory damages regimes. We have seen these used in the US to provide extremely inflated damage awards against routine copyright infringement. The idea is obviously to discourage infringement, but it hasn't been effective at doing this, and merely results in manifestly unjust damage awards against those individuals copyright owners decide to target. DFAT appear yet to make up their mind whether they will oppose such measures in ACTA, and this would seem to be an important point on which submissions should be lodged.

The third round, held earlier this month in Tokyo, discussed criminal measures applied to copyright 'piracy' and trademark counterfeiting. Dr Rodgers informed us that DFAT considers Australia's criminal measures to be sufficient, and that there is not likely to be substantial change to these. He did note, however, that there is pressure to introduce criminal sanctions for recording of performances at public events, and in particular, the recording of films – 'camcording'. Any such criminalisation would be limited to profit making or commercial scale infringement.

Peter Coroneos, from the Internet Industry Association, asked whether there would be an effort to redefine the meaning of the notoriously loose 'commercial scale' provision in Australia's Copyright Act – specifically, whether we would be criminalising file-sharing. Peter Treyde responded that “there isn't a proposed draft text on these provisions. But I think that the main drafters seem to be that the agreement should be TRIPS plus. Australia's legislation is pretty much TRIPS plus already (as a result of AUSFTA). There is not really any suggestion that we should change this.” The Attorney-General's Department seed 'largely comfortable' with the negotiations so far on this point, as 'Australia already has those standards'. As for whether ACTA would be used to drive change in local laws, Mr Treyde noted that the Australian Government's position is that it is “not keen to adopt any measures which require substantial change” to our existing laws.

The representative from the Australian Federal Police noted that confiscation of proceeds of crimes was an important disincentive for commercial scale infringement, and that existing legislation is just about adequate. Where proceedings under the Australian Copyright Act are started by indictment, proceeds of crime can be confiscated, but not where proceedings are commenced summarily. He also noted that the Trade Mark Act was currently being reviewed to see whether offences could be brought up to the standard required for proceeds of crimes legislation to have effect.

The next negotiation round is scheduled for the first week of December in Brussels, and will address internet distribution and IT issues, enforcement best practice, international cooperation, institutional issues and opening provisions (including, importantly, the definition of 'counterfeiting'). DFAT noted that they will again seek comment on relevant issues once they have access to the proposals being put forward.

I asked whether in the next round, when internet distribution is addressed, Australia is considering making any changes to intermediary liability, or requirements for ISPs to implement graduated responses, filtering, or mandatory disclosure of subscriber information? Dr Rodgers responded that the text has not yet been released, and that we won't know until it is. We were to be “guided by our general approach to negotiations in considering our current regimes being broadly suitable.” Apparently, this is an indication that we won't be seeing wholesale changes, but it remains a very vague commitment. Mr Treyde added that Australian measures were currently approximately appropriate, and that it would be 'interesting' to see what draft text will be presented, but we'll have to wait and see.

Finally, on a personal note, a representative from the Australian Copyright Council pointedly reminded me why I continue to volunteer for Electronic Frontiers Australia. She raised the point that consumer and users are extremely under-represented at public discussions such as this one. We looked around the room, and when participants were asked to raise their hands if they claimed to represent individual users or consumers, to the best that I could see, I was suddenly alone in the room. These international trade agreements have a great potential to alter the copyright balance, affecting the way that individuals engage with copyright expression in all their activities – not just consuming, but learning, researching, remixing, sharing, critiquing and reshaping. It is extremely important that we continue to work to ensure that users and reusers of copyright expression have a voice at the international level.

Edit: I didn't mention that there was a lot of discussion about the scope of the ACTA as it applies to patents. DFAT attempted to reassure audience members that ACTA would be limited to trademark and copyright infringement, and that the border control and criminal measures discussed so far contained no reference to patent infringement. With regards to pharmaceuticals, DFAT and the AGD noted that the purpose of the border control measures were to catch 'counterfeit' pharmaceuticals – used, in this sense, to mean infringing trademarks – and not generics or patent infringing drugs. There was also significant concern from the agricultural lobby that ACTA would have spillover effects on importers of patented seed crops, and DFAT stressed that they had not seen and did not expect to see any patent issues in the negotiation. At the next meeting the preliminary provisions will be discussed, and it is expected that they will limit 'counterfeiting' to trademark and copyright infringement.

NCSoft and Cryptic Studios are the creators of a popular Massively Multiplayer Online Role Playing Game (MMORPG) in which players create superheroes and do battle with the forces of evil. Marvel are publishers of comic books, one of the two production houses credited with creating, or at least resurrecting, the superhero genre.

Marvel alleged that NCSoft had “created, marketed, distributed and provided a host environment for a game that ‘brings the world of comic books alive,’ not by the creation of new or original characters but, instead, by directly, contributorily and vicariously infringing upon Marvel copyrights and trademarks.”¹⁾ Marvel pointed to the character creation process in City of Heroes, which allows players to design their own superheroes, and, with some work, replicate to some extent the likeness of well known protagonists of Marvel’s comic books. Marvel alleged that the flexibility in the character creation system empowers users to infringe their valuable copyrights and trademarks.

The claim is alarming. For years, children have role-played with the characters that form their popular culture. Content producers have used advertising and merchandising so extensively that it is difficult for a child not to be immersed in a world populated by representations of these characters. These same companies encourage children to buy licensed merchandise in order to role-play with their favourite characters. For years children have played not only with that merchandise, but also with home-crafted representations – drawings, paintings, a handmade cape or costume, the possibilities are only limited by imagination. This sort of play is either a symptom of, or fuel for, the popularity of the characters depicted, and is encouraged by the production companies. However, once this role-playing moved into the digital environment, Marvel brought suit for copyright infringement.

It would be unthinkable for a production company to sue children for dressing up as their favourite comic book character and playing in the park. A shift in context to a digital environment is little different conceptually. If Marvel were successful, the ability to role-play online would have been removed to a large extent. It is difficult to reconcile how Marvel can on the one hand bombard children with images and merchandise of their characters, in the hopes of encouraging them to play with those characters, and on the other hand, bring suit to restrict those same children from playing with those characters in an unlicensed setting.

The case was settled out of court in the United States in December 2005. The terms of the settlement were not disclosed, but no changes to NCSoft’s City of Heroes character generation process are to be made. Whilst this may be a win for NCSoft in this case, the fact remains that a similar case brought under Australian law may be significantly more difficult to defend.

Superhero comics, and potentially the superheroes themselves, are original artistic works for the purposes of Part III of the Copyright Act. Liability for primary copyright infringement will occur when a player of a game can be shown to reproduce the characters, or the characters as a substantial part of the comics, in a material form, or to communicate a substantial part of the characters or comics to the public.²⁾ ‘Material form’ includes “any form (whether visible or not) of storage of the work or adaptation, or a substantial part of the work or adaptation, (whether or not the work or adaptation, or a substantial part of the work or adaptation, can be reproduced)”.³⁾ This broad definition will cover the creation of a character in a game, as will the definition of ‘communicate to the public’ in a multi-player game (to “make available online or electronically transmit”).⁴⁾

In determining whether the characters have been reproduced, the Court will look for objective similarity between the in-game character and the original superhero, and the establishment of a causal link between the original work and the in-game character.⁵⁾ Where the two characters are objectively similar, a causal connection may be inferred by the popularity and level of exposure of the original, even if the person is copying subconsciously.⁶⁾
Where only some features of the character have been reproduced, the plaintiff will need to show that those features are substantial. The question of substantiality with respect to Part III works is determined primarily by reference to the original features that have been reproduced. Determining whether a substantial part has been reproduced will again be determined by the qualitative value of the part taken, but the emphasis is on the originality of the reproduced portions. Reproduction of a large quantity of unoriginal features is unlikely to constitute reproduction of a substantial part,⁷⁾ but reproduction of a small portion of original material which resulted from a high degree of skill and labour is likely to be substantial.⁸⁾

Given the recent restrictive approach taken by the Federal Court in relation to substantiality in Part IV subject-matter,⁹⁾ the features of a superhero are likely to constitute an important part, or a highlight, of the artistic or literary work of a comic book. Unless the court takes into account the type of use made of the player character, it is likely that they will be seen to infringe copyright in the original superheroes. Australian players will not be able to rely on a fair dealing exception to infringement.¹⁰⁾ The logical conclusion is that the players will be liable to the original owner. However, owners of copyright are understandably reluctant to sue their fans for copyright infringement. It is much less embarrassing and more convenient to achieve the same result by suing the producers of the game for secondary liability.

Secondary liability for copyright infringement in Australia arises when a person ‘authorises’ the doing of any act comprised in the copyright.¹¹⁾ Section 36(1A) tells us that, when determining whether a person has ‘authorised’ the doing of any such act, the matters that must be taken into account include:

(a) the extent (if any) of the person’s power to prevent the doing of the act concerned;

(b) the nature of any relationship existing between the person and the person who did the act concerned;

(c) whether the person took any other reasonable steps to prevent or avoid the doing of the act, including whether the person complied with any relevant industry codes of practice.

The meaning of ‘authorisation’ was recently considered in the Federal Court by Wilcox J in Universal v Sharman.¹²⁾ This case dealt with authorisation of infringement in sound recordings, but the relevant provisions in the Copyright Act for Part III works are worded identically. His honour considered the relevant authorities and extracted some guiding principles. ‘Authorise’ is to be construed according to its dictionary meaning of “sanction, approve, countenance”.¹³⁾ Authorisation does not have to be a positive step: “inactivity or indifference, exhibited by acts of commission or omission, may reach such a degree as to support an inference of authorisation or permission”.¹⁴⁾ Mere provision of the means of infringement is not enough.¹⁵⁾ Mere inactivity without knowledge will not be enough.¹⁶⁾ Mere knowledge is not enough.¹⁷⁾ An implied general permission or invitation does not require specific knowledge.¹⁸⁾
In Universal v Sharman, Sharman Networks was found to have authorised the mass infringement of copyright in sound recordings by providing the software for the Kazaa peer-to-peer filesharing network. The two most important factors considered were that (1) Sharman provided the facilities for infringement; and (2) Sharman had knowledge that Kazaa was being used predominantly to share copyright works.¹⁹⁾ Wilcox J did not accept that there was a large proportion of legal filesharing traffic.²⁰⁾ It wasn’t important that Sharman did not have actual knowledge of infringing acts, merely that it knew that a major proportion of traffic must be infringing.²¹⁾

Next, Sharman had a financial interest in increasing filesharing, because of increased advertising revenue. Because most filesharing is infringing, Sharman therefore had a financial interest in high rates of infringement.²²⁾ Sharman did nothing effective to curb the illicit filesharing on their networks.(Ibid 99.)) Sharman ran some campaigns which implicitly promoted illicit filesharing.²³⁾ Critically, Wilcox J found that Sharman could exercise some degree of control over its users.²⁴⁾

In Universal v Cooper,²⁵⁾ Cooper operated a website where other parties could post hyperlinks directing users to remote websites where infringing sound recordings could be downloaded. The Federal Court found that Cooper had knowledge of the infringing material, his website facilitated the infringement of copyright, and he had power to exercise some control over the links, but did not do so.²⁶⁾ Accordingly, Cooper had authorised the infringement of copyright in the sound recordings, notwithstanding that none of the infringing material was hosted under his control, or that the links to the websites hosting the infringing material were placed on his website by other users.

Although the decisions in Universal v Sharman and Universal v Cooper were confined very tightly to the facts of the cases, we are able to see how the same principles could be applied to find a computer game manufacturer liable for secondary copyright infringement. NCSoft provides the means of infringement, could be shown to know of the infringement (depending on how prevalent it is), and have the power to stop such infringement (MMORPGs are much more tightly controlled than distributed filesharing networks). It is also possible that NCSoft could be shown to engage in tacit promotions of infringement in their advertising materials.

The fact that NCSoft’s game obviously has many non-infringing players may be the crucial point in any such litigation. In this case, the game developer could probably successfully argue that it should not be held responsible for the infringing behaviour of a small number of its players.

NCSoft in this case may be able to escape secondary liability in Australia. However, we must consider whether this is the approach we want to take when we are shaping our digital environments. Are we certain that we only want people to be able to role-play with their favourite media icons in spaces which have been licensed by the appropriate publishers? If a provider of a virtual world made a space (like a park) where players could express themselves as they wanted, should they be liable when a significant portion of those players express themselves in ways that draw on copyright portions of their popular culture?
The disadvantages to such an approach are significant. Primarily, only people who have the ability to pay pop-culture creators have the opportunity to play – at least in the offline world, merchandisers cannot (completely) stop children from using their imagination or someone else’s toys to role-play. Next, we lose a great potential for creative re-expression – the environment must be controlled by the owner or a licensee, meaning that the potential for expression is limited to their ideas of ‘safe’ playing with iconic characters. We also lose the ability for players to mix genres and media – Marvel characters will be segregated not only from DC Comic superheroes, but also dinosaurs, spacemen, and Walt Disney characters. The qualitative value of play is reduced because it is confined to the boundaries of corporate merchandisers.

The better solution is to exempt this type of play from copyright infringement, either by determining that it does not reproduce a substantial part of the original works, or that it should be excused as a fair dealing or fair use of material. Unfortunately, current Australian law does not support such an approach.