Australian Business Law: Copyright, Contracts, and Consumer Protection

Posted on Sep 8, 2024 in Law & Jurisprudence

LAW Study Notes

Copyright

Copyright protects text, images, and other forms of expression, such as computer programs, films, television programs, and music, from unauthorized copying.

Copyright in Australia is regulated by the Copyright Act 1968 (Cth).

Requirements for Copyright Protection

1. The creation is a work of subject matter other than works.
2. The creation is original.
3. The creation is expressed in a material form.

Requirement 1: The Creation Is a Work of Subject Matter Other Than Works

4 Types of Works:

• Literary works
• Musical works
• Dramatic works
• Artistic works

The Act also extends subject matter other than works:

• Sound recordings
• Films
• Television and sound broadcasts
• Published editions

Mirror Newspapers Ltd v Queensland Newspapers Pty Ltd [1982] Qd R 305

The court decided that a list of winning bingo numbers was a ‘literary work’ within the meaning of the Copyright Act.

Requirement 2: The Creation Is Original

The creation must be the result of the creator’s own skill and effort rather than copied from another source. A minimal degree of creativity is required.

Desktop Marketing Systems Pty Ltd v Telstra Corporation Ltd (2002) FCR 491; [2002] FCAFC 112

Desktop Marketing Systems Pty Ltd (DMS) used data from Telstra’s telephone directories to create searchable directories on CD-ROMs. The CD-ROMs replicated the layout of Telstra’s directories. The court decided that the telephone directories were protected by copyright as original literary works, even though the level of creativity was minimal. The originality requirement was satisfied by Telstra’s effort and expense in compiling the data. DMS was found to have infringed Telstra’s copyright.

Requirement 3: The Creation Is Expressed in a Material Form

Copyright does not protect an idea; it only protects the expression of the idea. Facts, information, methods, and systems are not protected by copyright unless they are expressed in a material form.

Donoghue v Allied Newspapers [1938] Ch 106

Donoghue, a jockey, was interviewed by a journalist. The interviews were written up by the journalist and published in a series of newspaper stories. Five years later, the journalist wanted to use material from the newspaper stories in a book to be published by Allied Newspapers. Donoghue opposed the use of the material and claimed ownership of copyright in the interviews. The court decided that copyright in the interviews was owned not by Donoghue but by the original newspaper (as the journalist’s employer at the time). The ideas in the interviews may have been Donoghue’s, but it was the journalist who first expressed them in material form.

If all 3 above requirements are met, the creation is automatically protected by the Copyright Act upon being expressed in material form.

What Is Protection?

Exclusive Rights of the Copyright Owner

The owner of copyright in a protected work has the exclusive right:

• In the case of literary, dramatic, or musical work:
  • To reproduce the work in a material form
  • To publish the work
  • To perform the work in public
  • To communicate the work to the public
  • To make an adaptation of the work
• In the case of an artistic work:
  • To reproduce the work in a material form
  • To publish the work
  • To communicate the work to the public
• In the case of a literary work (other than a computer program) or a musical or dramatic work:
  • To enter into a commercial rental arrangement in respect of the work reproduced in a sound recording
• In the case of a computer program:
  • To enter into a commercial rental arrangement in respect of the program

If another person exercises any of these exclusive rights without the owner’s permission, they infringe the owner’s copyright.

Rank Film Production Ltd v Dodds [1983] 2 NSWLR 553

Dodds, the owner of a motel, played movies on a video recorder that could be watched by guests on the television sets in their rooms. The court decided that ‘public’ includes a portion of the public, no matter how small. Dodds had caused the films to be ‘seen in public’ and had therefore infringed the copyright owned by Rank Film.

Moral Rights

The non-transferable rights of a creator to insist that they be identified as the creator, to prevent false attribution of creatorship, and to prevent derogatory treatment of the creation.

Moral rights include the following:

• The right of attribution of authorship: The creator can insist that they be identified as the creator of the work. For example, when a painter sells a painting, they retain the right to insist they are the creator.
• The right not to have authorship falsely attributed: The creator can prevent others from being falsely identified as the creator.
• The right of integrity: The creator can object to, and in some instances prevent, derogatory treatment of the work in a way that will prejudicially affect their honor and reputation. For example, a sculptor can object to their sculpture being unreasonably modified by the new owner.

Snow v Eaton Shopping Center Ltd (1982) 70 CPR (2d) 105

Snow, a sculptor, created a display of 60 geese for the Eaton’s Shopping Center. The store subsequently decided to put red bows on the geese. Snow successfully obtained an injunction preventing the store from doing so on the grounds that it was an infringement of his right to integrity: he had the right to prevent an unreasonable modification of the work.

Duration of Protection

Ownership of copyright is protected for a fixed period, after which the creation enters the public domain, and others can copy it without penalty.

Ownership of Copyright

Ownership of copyright is a separate issue from ownership of the physical item.

• Literary, artistic, musical, and dramatic works
  • The person who creates the work is generally the owner of the copyright. Exceptions may apply if:
    • The creator is an employee rather than an independent contractor.
    • The original work was created as part of the duties that the person is employed to carry out.
• Films, sound recordings, broadcasts, and published editions
  • Copyright in a sound recording or film is owned by the producer unless the subject matter was made under contract for some other person, in which case that other person is the copyright owner.
• Written agreements
  • The above rules can be modified by written agreement.
• Assignments and licenses
  • A copyright owner may choose to assign copyright to another.

Trademarks

What Is a Trademark, and Which Act Governs Them?

A trademark is a distinctive ‘sign’ used to distinguish goods and services from those provided by others.

• Trademarks Act 1995 (Cth)
• Section 6 ‘sign’ can mean:
  • Letters, words, names, signatures, numerals, sounds, scents, brands, headings, labels, tickets, packaging, shapes, colors, devices

What Happens When the Trademark Is Not Actually Registered?

Where trademarks are unregistered, the owner of the trademark could:

• Sue under the ‘Tort of passing off’
• ACL – Section 18 prohibits misleading and deceptive conduct

Patents

Definition and Governing Act

Exclusive rights for a limited period of time for the patent owner as a reward for their innovation.

• Patents Act 1990 (Cth)

Types of Patents

1. Standard – Protection lasts 20 years
   • Must be a manner of manufacture
   • Is novel
   • Involves an inventive step
   • Is useful
   • Was not a secret
2. Innovative Patent – Protection lasts 8 years
   • The difference is that it only needs to involve an innovative step, as opposed to an inventive one.

What Is the Protection Received From Having a Patent?

• Exclusive rights to take advantage of the invention or to authorize another person to exploit the innovation

Dealing with Risk

A tort is a civil wrong where a person unjustifiably interferes with the personal or property rights of another. The remedy for a tort is the payment of damages (compensation) to a person who has suffered as a result. Negligence is the most common type of tort.

Negligence

What Are the 3 Elements Needed to Prove a Claim for Negligence?

1. Duty of care (Defendant owed the plaintiff a duty of care)
2. The defendant breached the duty of care
3. Harm caused by the breach of duty of care

Negligent Misrepresentation (Misstatement)

The Key to This Specific Tort Lies in the Extra Requirements for Duty of Care. These Extra Requirements Are:

1. Advice given to the plaintiff in a business or serious nature
2. The defendant should realize that the plaintiff would rely on their advice
3. It was reasonable that the plaintiff actually relied on the advice

Shaddock & Associates Pty Ltd v Parramatta City Council

Making a Contract

Offeror: The person who makes the offer
Offeree: The person who receives the offer
Promisor: The person who makes the promise
Promisee: The person to whom the promise is made

Elements of a Contract

1. Agreement between 2 or more persons (parties)
2. Both parties must intend that their agreement be legally enforceable.
3. Both parties must pay a price or make a promise (this price or promise is called Consideration).

Element 1: Agreement

Rules for an agreement:

• There must be an offer and acceptance made by the parties.
• An offer is an expression of willingness to enter into legal relations with the other party.
  • Watch out for counter-offers.
  • Requests for information
  • Invitations to treat
  • The court determines whether an offer has been made based on what a ‘reasonable person’ would have thought in those circumstances.
• Acceptance
  • Willingness to accept the offer
  • Acceptance must be communicated

Element 2: Intention to Create Legal Relations

Traditionally at common law, the question of intention was decided on the basis of presumptions:

• Presumptions against intention where the agreement is domestic or social (Balfour v Balfour [1919])
• Presumption in favor of intention where the agreement is commercial (Rose and Frank Co v JR Crompton & Bros Ltd and Brittains Ltd [1925])

Element 3: Consideration

• Consideration is the promise that both parties are making in agreeing to the contract.
• Consideration must be sufficient but doesn’t need to be adequate, e.g., selling a car for $1.
• Consideration cannot be vague.
• Past consideration is not good consideration.
• Existing public duties are not good consideration.
• A promise to accept a lesser sum in settlement of a debt is not good consideration.

Promissory Estoppel

The principle that a promise will be legally enforceable even if the promisee has not provided consideration for the promise, as long as certain requirements are satisfied:

1. The promisor intended the promisee to rely upon a clear and unambiguous promise.
2. The promisee has, in fact, relied upon the promise by changing their circumstances, and if the promisor does not keep their promise, the promisee will suffer a material disadvantage.
3. It would be unfair for the promisor to break their promise.

Promissory estoppel can be used to prevent a party to a contract from enforcing contractual rights.

Giumelli v Giumelli (1999) 196 CLR 101; [1999] HCA 10

A son left school at 15 to work on his parents’ farm on the assumption that he would receive part of the property in return. The parents later refused to transfer the land based on disapproval of his second marriage. The son sued, and the court decided that the requirements of promissory estoppel were satisfied. The son had relied upon the promise to his detriment by not pursuing other employment opportunities, and it would be unconscionable for the parents to break their promise. The son was awarded damages as compensation.

Contract Excuses

Even if all requirements are met, a contract may not be enforced due to any of the following circumstances:

1. Lack of consent – One or both parties have not entered into the contract willingly.
   • E.g., Mistake, Duress, Undue influence, Unfair conduct, Misrepresentation
2. Lack of capacity – One of the parties lacks the legal capacity to enter into contracts.
3. Lack of legality – Either the purpose of the contract or the performance of the contract is illegal.
4. Lack of formality – The contract fails to satisfy the necessary formal requirements, such as a requirement to be in writing.

Mistake

1. Unilateral mistake – One party makes a mistake. VOIDABLE
2. Common mistake – Both parties make the same mistake. MAKES THE CONTRACT VOID
3. Mutual mistake – Both parties make a mistake, but it’s about a different aspect of the contract. MAKES THE CONTRACT VOID (The agreement part is missing).

Undue Influence

Improper use of a relationship where one party has a degree of control over the other party. For example:

• Parent and child
• Patient and lawyer
• Client and religious advisor
• Devotee and guardian
• Wards and trustee
• Beneficiaries

If there is presumed undue influence in your case, then the responsibility is on the weaker party to show the stronger party had a controlling influence over them. Then the onus of proof shifts to the stronger party, who has to show they didn’t take advantage of this controlling influence.

Johnson v Butress

Allcard v Skinner

Terms of a Contract

Need to Know:

• The difference between terms and representations
• The parol evidence rule and its exceptions
• What express terms are
• Signed and unsigned contracts
• What implied terms are and the tests for implying a term into a contract
• The difference between a condition, a warranty, and an innominate term

Terms vs. Representations

Before an innocent party can bring an action for breach of contract, it must be determined what the parties to the contract actually agreed to, i.e., what was in the contract. This requires an assessment of whether oral statements are terms or representations:

What Is a Term?

A legally binding detail or part of the contract – Express or implied terms. They can be written or oral.

What Is a Representation?

These are not legally binding – They are generally pre-contractual statements used for negotiations or to induce the person into entering the contract.

To determine if something is a term or a representation, we use the reasonable person test.

Parol Evidence Rule

Where it is assumed that all the terms of the contract are contained in one written document.

Hence, the court won’t take into account evidence of any other terms/agreements.

Exceptions to the Parol Evidence Rule:

• To clear up ambiguous language
• Where the extra statement is a collateral contract
• To show custom or usage in particular industries

Discharge of Contracts + Remedies

A contract may be discharged (brought to an end) by:

1. Frustration
2. Performance
3. Breach of contract
4. Mutual agreement
5. Operation of law
6. A term of the contract

Remedies Available for a Breach of Contract

• Equitable remedies – Rescission, restitution, specific performance, injunction
• Damages

Discharge by Frustration

A contract will be terminated as a result of frustration if the following 4 requirements are satisfied:

1. A supervening event that made performance impossible or so different from what the parties contemplated in entering the contract that it would be unfair to enforce it
2. None of the parties were responsible for the event
3. There were no terms that provided for alternative arrangements
4. It would be unjust or unfair to compel the parties to complete the contract

Consumer Protection

Prior to 2010, consumer transactions were regulated by a combination of state government and commonwealth legislation (i.e., Trade Practices Act 1974). In 2010, the Australian Consumer Law (ACL) was introduced as the single national law for consumer transactions, and it is administered by the ACCC.

Look into Section 18 of this Act.

Misleading and Deceptive Conduct

What Does Section 18 of the ACL Actually State?

Section 18 states that a person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.

This section is meant to include consumers and competitors.

Examples include:

• Silence
• Advertising puffs
• Exaggerations
• Professional advice
• Statements of opinion

The test associated with the ACL is “the most unsuspecting, modest member of the community”. This objective test has a much lower threshold than others.

The Requirements to Show for Misleading and Deceptive Conduct

1. The conduct has actually occurred.
2. That this conduct was in trade or commerce.

Making a Contract (Agency or Employment for Exam)

Agent – Person who has permission to enter into a contract with a 3rd party on behalf of a principal

Employee – Possesses a contract OF service

Independent Contractor – Possesses a contract FOR services

Agency

Relationship created in 4 ways:

1. Express agreement
2. Implied agreement, e.g., managers in companies have implied authority based on their role
3. Necessity or operation of law (problem question in slides)
4. Ratification

Types of Agency

• Universal agent – Unlimited authority
• General agents – Broad powers, limited by role in business
• Special agents – Specific authority

Scope of Authority

• Express Actual Authority – Written in words what the agent is allowed to do
• Implied Actual Authority – Customary authority – based on their role in the business
  • Incidental authority
• Apparent (Ostensible) Authority (The 3rd party relied on the ‘holding out’ to enter the contract). It’s a circumstance where the principal may be bound by the actions of the agent, even if they have not been given authority.
  • The principal ‘holds out’ the agent as having authority.
  • The third party wasn’t aware the agent had no authority.

Employees vs. Independent Contractors

The law distinguishes between the two. How does the court decide if there is an employment relationship? What did the court say about the significance of the degree of control? What is the ‘multi-indicia’ test?