Who controls the copyright in your online posts, really?

In a recent article we looked at how important it is for artists and content creators to ensure they have a written, signed contract for any licence agreement. A recent New York case highlights the strict licensing terms on social media platforms and the trade-off between exposure for your content, against control of your works.

Sinclair v Mashable – what happened?

Stephanie Sinclair is a renowned photographer whose portfolio includes works featured in The New York Times, Time Magazine and National Geographic. Like many creators, Sinclair uses Instagram as a platform to share her works.

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Do you understand what you’re agreeing to when you upload content?

Sinclair uploaded one of her photographs (an image of a mother and child in Guatemala) to her Instagram account. She was then contacted by digital media and news website, Mashable, offering $50 in exchange for a licence to use the photograph for a story on female photographers. Sinclair declined the offer.

Undeterred by the refusal, Mashable went ahead and used it anyway, taking advantage of Instagram’s API to embed her post of the photo in their website. Mashable didn’t make a copy of the photo – just linked back to the photo on Instagram – but the overall effect was the same. When Mashable refused to remove the embedded post, Sinclair commenced proceedings for copyright infringement.

A not-so picture perfect judgment

On face value, it might seem fairly straightforward that by using Sinclair’s copyright work without her permission, Mashable had infringed her copyright.

However, in this case, the devil was in the details – specifically, in Instagram’s Terms of Service (TOS).

Judge Kimba Woods found that by creating an Instagram account, Sinclair had agreed to Instagram’s TOS. These TOS included a term granting Instagram a “non-exclusive, fully paid and royalty-free, transferable, sub-licensable, worldwide licence to the Content.”

The judge determined that when Sinclair posted the photo to her public Instagram profile, she had “granted Instagram the right to sublicence the photograph, and Instagram validly exercised that right by granting Mashable a sublicense to embed and display the Photograph on their website.”

Even though Sinclair had refused to license the photo directly, Mashable could still validly obtain a sub-license from Instagram to embed the photo.

Private v public

Sinclair argued that Instagram’s TOS were unfair. Users must decide between either:

  • choosing to have a private profile and losing out on the advantages of sharing their works on the biggest photo sharing platform in the world, or
  • choosing to have a public profile in exchange for surrendering rights in their uploaded content to Instagram.

In her judgment, Judge Woods acknowledged the difficulty of this position, but determined that Instagram’s TOS were binding:

“Instagram’s dominance of photograph- and video-sharing social media, coupled with the expansive transfer of rights that Instagram demands from its users, means that [Sinclair]’s dilemma is a real one… But by posting the photograph to her public Instagram account, Plaintiff made her choice. This court cannot release her from the agreement she made.”

What does this mean for you?

As an artist or content creator, it is likely that you will rely on social media as a major platform for sharing your work. And while it is incredibly important to share your work with the public, there is another very important thing to consider; and it’s also one of the most ignored – the fine print.

The terms and conditions for online platforms, including Instagram, often contain broad terms applying to any content you upload – including the right to sub-license to third-party websites.

Sinclair’s case serves as a great reminder that when signing up to any online sharing platform, it is always worth taking the time to understand the terms you are agreeing to. You may not be able to negotiate the terms, but you can choose which works you share and make sure you retain practical control over valuable content.

Author: Blake Motbey, Associate

Licensing your copyright? Get it in writing!

As an artist or content creator, licensing your artworks and content can be one of your most important and rewarding streams of income. As well as getting your work out there, ensuring that you are paid appropriately and your works are protected arejust as important.

Make sure your licence contracts are in writing.

Unfortunately, many artists and creators often make unwritten or informal arrangements when licensing their copyrighted works to others.  Whether this is based on the assumption that it’s unnecessary to enter into a contract, that it’s safer to work under an informal agreement, or simply trusting that the licensee will do the right thing, operating without expressly written terms can pose significant risks for artists and creators .

The recent case of Hardingham v RP Data Pty Ltd demonstrates just how easily issues can arise from informal or unwritten copyright licencing arrangements – especially if your works are being uploaded to third party websites.

Hardingham v RP Data – what was the issue?

Mr Hardingham is a professional photographer who provided photographs and floorplans to real estate agencies to be used in marketing campaigns for the agencies’ listed properties, including for listings on realestate.com.au, which had standard terms for agents. These terms include a broad licence of uploaded content.

However, these photographs and floorplans were then reproduced and uploaded by a third-party company, RP Data, under a separate sub-licensing agreement with realestate.com.au.

Mr Hardingham commenced court proceedings claiming that RP Data had infringed his copyright in his images and floorplans.

Well if Hardingham didn’t license the works to RP Data, they shouldn’t be able to use his works, right?

Unfortunately for Mr Hardingham, this was not the case.

While it may have been his initial intentions that the licence granted to the agencies was for house marketing purposes only, and that no sub-licence could be granted, the court took a different view.

As there was no formal written contract between Hardingham or his company and the agencies, the court relied on evidence surrounding the context and the commercial arrangements between each of the parties. The court said that these factors meant that realestate.com.au had a licence, and was able to grant a sub-licence to RP Data. This right was either:

  • inferred from the conduct of the parties’, or
  • implied into the agreements in order to give business efficacy to the agreements.

The lack of any formal or written licensing agreement between Mr Hardingham and the agencies was a crucial factor that allowed for the legal sub-licence of the works.

Get on the same page – literally!

Without a formal licensing agreement, you are putting yourself at the risk of your works or content being used or reproduced without your permission. As a result, you can incur significant financial loss by missing out on important licensing fees you would otherwise have negotiated for.

So, if you are an artist, creative or content creator and are planning to license your copyright works to others, you should always make sure you have the crucial terms of your licence arrangement set out in a written, signed contract.

If you’d like to put together a standard licence for your works, contact us.

Author: Blake Motbey, Associate

Time to review your IP arrangements

In February this year, the Federal Parliament passed the Treasury Laws Amendment (2018 Measures No. 5) Bill 2018 (Act), repealing the intellectual property exemptions under section 51(3) of the Competition & Consumer Act 2010 (Cth) (CCA).

The repeal is set to come into effect on 13 September 2019.

What’s section 51(3)?

Section 51(3) covered contractual terms in licences and assignments of patents, designs, copyright and EL rights, and specified agreements in relation to trade marks.

Do your IP contracts need review?

The section provided a limited exemption for IP rightsholders, to allow them to make arrangements that would otherwise be prohibited under the CCA. So, for example, a generally anti-competitive term, or a cartel provision, which met the requirements of section 51(3), would be permitted.

The background of the section was the perceived conflict between the monopoly rights of IP rightsholders, and the competition provisions under the CCA, meaning that IP rights needed this exemption.

What’s the background to the changes?

Section 51(3) has had a life under the microscope, with consistent review and advocation for its repeal for quite some time. It was reviewed in the Hilmer Report, as well as in a number of subsequent competition reviews.

More recently, the Productivity Commission’s Inquiry into Intellectual Property Arrangements, released in late 2016, considered the balance between access to ideas and products, and the encouragement of innovation and investment.

The report recommended the repeal of section 51(3) on the basis that IP rights did not have significant competition implications, and issues only arose where there were few substitutes or where IP rights aggregation could create market power.

The Commission considered that there would be increasing benefits to repeal, especially in the pharmaceutical and communications markets, as the level of licensing and cross-licensing rises in the future.

 Where does this issue arise?

There have been very few cases where section 51(3) has been considered – in fact the ACCC stated in its 2016 submission to the Productivity Commission that it was not aware of any cases where section 51(3) had been used successfully as a defence.

That said, it’s anecdotally clear that IP rightsholders have relied on knowing that section 51(3) was there, in structuring agreements, and there are several situations where regulators and courts have considered a tension between IP rights and competition regulation. These include:

  • Exclusive dealing – such as where rightsholders impose restrictions on distributors about their permitted suppliers or customers. For example, in Transfield v Arlo [(1979) 144 CLR 83 at 108, the Court considered whether Transfield was obliged to sell exclusively promote and sell Arlo’s steel pole. Wilson J was of the view that if a contract clause requiring a licensee to use its ‘best endeavours’ to sell a patented product meant that the licensee could not sell competing products, it would have been protected by section 51(3).
  • Geo-blocking – where rightsholders impose geographical restrictions on the basis of consumer nationality or location. The EU recently regulated geo-blocking with Regulation 2018/302. The European Commission subsequently found that clothing company, Guess, violated the regulation by restricting authorised retailers from selling cross-border to consumers within the EU single Market, allowing them to maintain artificially high retail prices.
  • Assignments-back – In the US, Pilkington Glass was found to have built up a dominant position in the glass manufacturing market by requiring licensees to assign back improvements to Pilkington’s processes. Consequently, the court prohibited Pilkington from imposing territorial and use limitations on their US licensees, allowing them instead to manufacture and sublicence anywhere in the world, free of charge, using the technology in the licences.

What will happen when the repeal comes into effect?

When the repeal takes effect this September it will operate retrospectively, meaning p

We can anticipate that with this change, the ACCC will have an increased focus on IP-heavy arrangements and compliance activities to ensure businesses understand their new obligations under the CCA.

The ACCC has stated that they are in the process of writing guidelines to assist businesses in complying with the repeal, but while we wait for these, we can expect that agreements including the following aspects will be of interest:

  • Exclusive arrangements, territory restrictions, geo-blocking and assignments-back, as mentioned above;
  • Licences that impose quantity restrictions on the licensees, split licensees’ rights by reference to customers, or involve bid-rigging;
  • Bundling and third-line forcing, where the licensee has to accept other products from the licensor or a third party;
  • Patent pooling arrangements – these are agreements where companies with related patents cross-license them to each other and agree on the terms of licence agreements to parties outside the pool; and
  • Clauses that provide for a first mover advantage or “pay for delay”, where one party pays the other to agree not to commercialise a product or move into a market.

Now is the time to review

With the commencement date fast approaching there is still a window of time to ensure that your existing IP arrangements will comply with the repeal.

If you have any concerns or questions about the potential impact of the repeal on your IP licensing, assignment or distribution arrangements, please contact us.

Author: Blake Motbey, Paralegal.

Highlights of 2018 and areas to watch in 2019

2018 came and went in a flash. France celebrated glory in the FIFA World Cup in Russia; Banksy sold his ‘Girl With Balloon’ painting for $1.86 million before the artwork shredded itself seconds after the gavel dropped; and the online world was captivated by the World Record Egg. And as we say goodbye to summer and settle into the working year, why not take the chance to reminisce on some of the more important developments of 2018, and look forward to those that 2019 has in store?

Looking back on 2018

  • New obligations were enforced under the European Union General Data Protection Regulation (the GDPR). While the GDPR is an EU regulation, the obligations have a wide reach, applying to all Australian businesses who have an establishment in the EU, offer goods & services to the EU, or monitor the behaviour of individuals in the EU.
  • As part of the government’s safe harbour and insolvency reforms, we saw the introduction of the ipso facto insolvency reforms by way of the Treasury Laws Amendment (2017 Enterprise Incentives No.2) Act 2017. The reforms apply to contracts entered into on or after 1 July 2018, affecting the ability of contracting parties to exercise termination, enforcement or other rights that are triggered by a company restructuring or insolvency.
  • The European Parliament voted in favour of introducing the controversial EU Copyright Directive, a legislation designed to better meet the needs of copyright protection in the internet age. The proposed directive caused significant global debate around the detrimental effects of Articles 11 (the Link Tax) and 13 (the Meme Ban), headlined as the ‘death of the Internet’.
  • The ACCC highlighted its hard stance against franchises attempting to contract out of their obligations under the Franchising Code of Conduct and the Competition and Consumer Act. The ACCC’s case against Husqvarna Australia highlighted the importance of all companies that appoint dealers, distributors, licensees or similar, to confirm whether their contracts are in fact franchise agreements.
  • A Victorian Supreme Court cast some doubt over the enforceability of contractual provisions that attempt to limit the period in which parties can claim for misleading or deceptive conduct. This arose in the case of Brighton Australia Pty Ltd v Multiplex Constructions Pty Ltd [2018] VSC 246, where the court considered the enforceability of a contractual provision requiring claims (including for misleading or deceptive conduct) to be made within 7 days.Justice Riordan, deciding in contradiction to a number of NSW decisions, ruled in favour of the “no exclusion principle”, stating that allowing the enforceability of such time limitations on claims would be against the public policy underpinning the provisions of the Australian Consumer Law (ACL).

Some areas to watch in 2019

  • Discussions over the EU Copyright Directive continue, with negotiators for the European Parliament aiming to finalise the directive shortly. However, negotiations have broken down, with the three-way discussion between Council, Parliament and member states  derailed over the exact wording over Article 11 and Article 13. Consequently, the “trialogue” discussion that was set to take place on  23 January was cancelled. With upcoming EU elections in May, there likelihood of any closure on this matter in the near future is low, with a final vote likely to take place under the next parliament.
  • The Telecommunications and Other Legislation Amendment (Assistance and Access) Act 2018, commonly referred to as the AA Bill, was passed in December of last year. The Bill’s aim is to compel various companies, especially those in communications industries, to assist Australian security and law enforcement agencies by allowing access to encrypted communications they believe may contain plans for illegal or terrorist activity. The implications of the Bill will be an interesting area to watch throughout the year, with a number of people, especially those within the tech and start-up communities expressing their concerns.
  • On 10 December 2018, the ACCC released its Digital Platforms Inquiry Preliminary Report. The ACCC’s report is founded on questioning the role and accountability of the global digital platforms (such as Facebook and Google) in the supply of advertising, news and journalism in Australia. The final report addressing these issues will be due on 3 June of this year.
  • There has been some debate globally and in Australia regarding the “hipster antitrust” laws, questioning the standards of competition law. The current foundation of competition law in Australia is focused on consumer welfare. However, concerns have been raised that this standard is too narrow and does not allow for prosecution of some types of conduct that some commentators believe competition law should cover.While this debate is likely to continue throughout the year, ACCC Chairman Rod Sims has reinforced Australia’s consumer welfare position, expressing their opposition to the introduction of broader interest considerations of public policy into competition law enforcement.

Author: Blake Motbey, Paralegal.

EU Copyright Directive – what’s all the fuss about?

Earlier last month the European Parliament voted in favour of the EU Copyright Directive (known more formally as ‘Directive on Copyright in the Digital Single Market’), proposed legislation designed to better meet the needs of copyright protection in the Internet age.

The directive is an attempt at amending the imbalances between the large digital corporations and the content creators who use these platforms to share their work. The aim is to implement a more rigorous process for protecting works against copyright infringement, while also providing a more efficient way to distribute earnings to rightsholders and reduce the ‘value gap’ between creatives and the big players in the tech world.

With piracy and the misuse of copyright being one of the ubiquitous consequences of the digital era, updating copyright protection laws would be something to get behind and celebrate, right?

Well…

While those in the creative industries, such as publishers, music labels, and individual creatives have thrown their support behind the Directive, many others, especially those in Silicon Valley, are rallying in strong opposition of the proposed laws; extreme opposers even heralding the “death of the Internet” as we know it.

Two specific articles of the directive find themselves at the heart of the polarising debate, namely, Articles 11 and 13.

Article 11

Article 11, aptly nicknamed ‘the Link Tax’, is designed to allow publishers of news content to request online platforms and news aggregators to obtain licences before they are able to share any of their publications. The obvious players finding themselves in the cross-hairs of this article are the larger platforms such as Google and Facebook. However, while individual and non-commercial use has been exempted from the law, there is concern the article will have broader implications, especially on smaller websites who wish to publish snippets and links to articles and who may be unable to afford the required fees.


Will this be the end of the Internet as we know it?

Article 13

Article 13, dubbed the “upload filter”, is the more controversial of the two.

The article is aimed at holding platforms that host user-generated content (such as YouTube) liable for any misuse of copyright that may result from any material uploaded by their users. Essentially, it means these platforms can be sued directly by rightsholders for infringement.

While the current method of policing the misuse of copyright is by responding to complaints by rightsholders, and removing any infringing content accordingly, the directive will require these platforms to take “effective and proportionate” measures to prevent unauthorised works from being uploaded.

“But YouTube has over 300 hours’ worth of video content uploaded every hour. How could they possibly find and stop all the infringing content from being uploaded?” you ask. It is exactly this practicality of complying with Article 13 that has proved one of the more contentious points of the debate.

It is argued that the only possible way to implement this process of prevention is by using automatic filtering technology capable of scanning through every single piece of content and stopping any content it recognises as copyrighted material in its tracks. Easy enough, right?

While it might not be a significant burden for the giants of the tech world, like Google, YouTube, and Facebook, who have the finances to develop and implement such technologies, its effect on smaller platforms appears to be more problematic; with some contending it will hinder the growth of digital platforms in the EU which will be unable to cope with the article’s requirements.

Just as concerning is just how efficient such filtering technology can be. It has been queried how the technology will be able to recognise and distinguish copyright infringement from other authorised or legal uses of copyright, such as parody or satire. This worry has given the article another common nickname: the “Meme Ban.”

For those not familiar, memes are often created by using still images (commonly taken from copyrighted works such as photographs, films, or television shows) and layering text over the top for comedic effect or expression of an idea. While they are most often created without the author’s consent for use of an image, they are still currently considered legal under EU law. Accordingly, there are serious concerns that if the filtering technology required by Article 13 is unable to distinguish legal use from infringement, content such as memes will mistakenly be flagged as infringement.

So, while memes may not be technically banned as the nickname suggests, they may likely still be flagged and killed off amongst the other infringing uploaded content.

What happens next?

The proposed legislation still faces one more round of voting in January 2019 before it will receive final approval. Many believe that, after the successful vote last month, it is very unlikely the legislation will be defeated in the new year.

What remains to be seen is in fact, however, is just much of a disruptive impact the directive will have on the Internet both in the EU and around the world.

Author: Blake Motbey, Paralegal.

My business idea is being copied – what can I do?

You’ve put time and thought into a great idea, invested in R&D, brought your idea to market – and now you find a competitor marketing the same idea.  What can you do?


How can you protect your idea?

The different aspects of intellectual property can help to an extent, but the issue of copying a concept can become complex.

Copyright protects the original material expression of an idea, rather than the idea itself. Unless your competitor copied your original artwork, wording or code, copyright won’t assist – for example, if you have had an idea for a scheduling program, and a competitor saw your idea and released a scheduling program which doesn’t use any of the original coding or graphical elements of your program, you won’t be able to make a copyright claim.

What about trade marks? Have you applied for trade mark protection of your product’s distinctive name? If the competitor used your name or a substantially similar name to promote similar products, you can make a claim based on your registered trade mark.

Patents protect inventions. They must be new to the market. If you think that your idea may be patentable, consult a patent attorney – but you must keep your idea confidential until the patent application is filed. If you have publicised it yourself, it may no longer be patentable. You can use confidentiality agreements where you need third parties to develop your invention. Also, take practical steps to protect confidentiality – limit distribution and keep information in secure files.

The law of passing off and consumer protection law can help where the competitor is making their offering look like it is, or is associated with, yours. For example, your competitor might be marketing compatible goods which have the look and feel of your brand, or suggesting that they are your authorised distributor or licensee.

If none of these will help in your specific situation, there are still practical steps you can take:

– make sure that you have all the relevant variations of your domain name so that there is no chance that an unscrupulous competitor can pick up similar names to direct traffic to their own website;

– make sure you have your domains set to auto-renew, or diarise renewal dates, so that you don’t accidentally drop your domain and have it picked up by your competitor;

– ensure that your website security is strong so that you reduce the risk of losing customers if your website is offline;

– make sure you are actively marketing on all relevant social media channels;

– if you are using a name or logo that is distinctive, apply for a trade mark, including in relevant overseas markets you plan to expand to;

– once you have your trade mark, ensure you diarise renewal dates;

– keep a record of your marketing activities, including promotions, press releases and media coverage, in case you need to demonstrate your reputation in the market in future years; and

– ensure that your concepts are kept confidential, including using effective confidentiality agreements, until they are ready for release.

If you have any questions about how to protect your ideas, contact us.

Copyright, commissions, collaboration and the Olive Cotton Award controversy

The recent controversy about the winning entry for the 2017 Olive Cotton Award is interesting in terms of the requirements of this photography portraiture prize, but also a helpful illustration of how copyright ownership can become complicated in the areas of commissions and collaboration.

Justine Varga entered a fascinating work, “Maternal Line”, which had been inspired by the sight of her grandmother seated at the kitchen table testing pens by scribbling.

She asked her grandmother to scribble directly onto a piece of film, and then handprinted the result in the darkroom. The result is a moving artwork described by the judges as “a very complex photographic portrait”.

There has been plenty of discussion about whether the result of Varga’s process was a portrait or a photograph.

However it also prompts discussion of some frequently misunderstood areas of copyright, as this article, quoting North Sullivan, former president of the Australian Commercial and Media Photographers association, and Professor Kimberlee Weatherall of the University of Sydney law school, highlights. Sullivan and Weatherall have both queried whether the copyright in the artwork is owned by Varga or her grandmother.

Collaboration

The general rule in relation to collaboration, where parties jointly create a copyright work, is that the authors own the copyright jointly.

In order to qualify as a joint author, a person must have contributed more than ideas or suggestions, because copyright applies to the expression in material form, not to the idea.

Dictation, though, is different from suggestion. The scribe who takes down dictation is not the copyright owner. This has the corollary that where one person has seen a copyright work and dictates it, copyright can be infringed even though the scribe has never seen the copyright work.

The question raised in this situation is whether Varga’s process involved a collaboration with her grandmother, or whether her grandmother was the sole author.

Importantly, joint authors cannot deal with their copyright without the consent of the other authors. Where two parties to a commercial transaction are jointly contributing to a copyright work, it’s worthwhile considering whether to agree that each party can commercialise the work without the other party’s permission, or whether they want to act jointly throughout the life of the copyright.

Commissions

The laws relating to copyright in commissions differ between jurisdictions, and it’s important to understand the Australian rules for local situations.

When you commission a copyright work – as, in this situation, Varga may have done by asking her grandmother to scribble on the film – you do not automatically own the copyright.

There are some exceptions.

Photos commissioned for private or domestic purposes, such as wedding photos or a family portrait, under a paid arrangement, are an exception to this general rule. However, it’s open to the photographer to retain copyright by agreement, so the person commissioning the photograph needs to check the photographer’s terms and conditions.

The situation is also different for copyright works commissioned by the Crown, or created in the course of employment.

In other situations – whether it’s marketing material, website content, a logo, or photographs for your business – you need a written assignment agreement from the author if you want to own the copyright. You should also consider appropriate treatment of moral rights.

There are also compromise options. If your key requirement is to be able to use the commissioned work freely, a broad licence from the author may be adequate for your situation.

If you would like us to review your terms and conditions in relation to copyright ownership and licensing, contact us.

Productivity Commission releases draft IP report

The Productivity Commission released its draft report on Australia’s intellectual property system on 29 April 2016.

The Commission has been asked to consider whether current arrangements appropriately balance access to ideas and products, and encouragement of innovation, investment and creative works.

Key recommendations Continue reading Productivity Commission releases draft IP report