What is passing off?  Revlon’s Mitchum Clinical deodorant v Unilever's Rexona and Dove deodorants

To put simply, passing off is where there is a misrepresentation that a business’ goods or services are those of another business.  Under an action for passing off, protection is given to those who have developed goodwill or reputation.  For a claim of passing off to be successful, the claimant has to prove that a misrepresentation has been made by another in the course of trade to actual or prospective customer that injures and causes damage the claimant's business, goodwill or reputation.  The misrepresentation can be one that relates to the likeness of a product or the trade name of a service provider.

On 19 August 2014, Gleeson J of the Federal Court of Australia (FCA) handed down the latest judgement in this area of law - Unilever Australia Ltd v Revlon Australia Pty Ltd (No 2) [2014] FCA 875.  You can read the full judgment on the FCA’s website. 

The parties involved, being Unilever and Revlon, are competitors in the supply of deodorant products.  Unilever's deodorants are branded Rexona and Dove, where as Revlon's deodorant is branded Mitchum Clinical.  The initial action was by Unilever, who claimed that Revlon breached the Australian Consumer Law in terms of the representations Revlon made in advertising and on the packaging of Revlon’s deodorant.  In response to Unilever’s claim, Revlon counter-claimed that Unilever breached the Australian Consumer Law in the same way, and in addition, engaged in passing off.  Revlon wanted to obtain an injunction so as to restrain Unilever from selling or marketing Rexona clinical protection products in Revlon’s new packaging.

In his judgement, Gleeson J explained why Revlon was unsuccessful in restraining Unilever in the use of the particular packaging.  In essence, it was determined that it would be unlikely that a reasonable consumer would confuse the packaging of the two competing brands.  It other words, Revlon failed to demonstrate that Revlon’s packaging had become so distinctive that in the minds of the potential customer that Revlon had acquired trade reputation associated with it.

This is an interesting case to read, with important lessons to be learnt.  In matters relating to consumer protection, for lawyers acting for SMEs and large corporations alike, it is worth remembering that, in addition to proving deception or that confusion has been caused, actual proof of damage is required to succeed in an action for passing off.  

This post first appeared on CPD Interactive's "Legal Natter's Blog".

On 31 July 2014, ASIC released Report 402 that outlines enforcement outcomes it has achieved during the period 1 January 2014 to 30 June 2014.  As Australia’s corporate, markets and financial services regulator, ASIC has the role of identifying and dealing with those who break the law.  ASIC does this through their detect-understand-respond approach:

• Detect misconduct or the risk of misconduct by gathering intelligence
• Understand by analysing the intelligence
• Respond to misconduct or the risk of misconduct using regulatory tools such as enforcement action

In the first half of the 2014 calendar year, ASIC reported that it has achieved 256 enforcement outcomes, with 83 enforcement outcomes in the “market integrity”, “corporate governance” and “financial services” areas, and 173 in the “small business compliance and deterrence” area.  In particular, ASIC has focused on the activities of credit providers.  This is because ASIC considers that the consumer credit industry has now had sufficient time to familiarise itself with its obligations under the National Consumer Credit Protection Act 2009 (Cth).  As such, if ASIC becomes aware of breaches of the law, it is now more likely to take enforcement action to address its concerns.  During the 6-month period covered by the report, ASIC has achieved a significant number of outcomes relating to consumer credit, including two criminal convictions, five infringement notices paid (totalling $71,400), six individuals permanently banned from engaging in credit activities, four individuals banned from, or giving an undertaking to refrain from, providing credit for between three and seven years, and seven Australian Credit Licences cancelled.

While ASIC will continue to take enforcement action in any area that it administers, ASIC has identified a number of enforcement areas it will be focusing on.  These are:

• Treatment of confidential information
• Auditor and liquidator standards
• Advertising of financial products
• Benchmarks (relating to, for example, LIBOR and BBSW)

You can access ASIC’s full report (Report 402) via ASIC’s website.

This post first appeared on CPD Interactive's "Legal Natter's Blog".

Thank you to Peter Frankl of Legal Practice Intelligence for interviewing me for his special report on legal knowledge management - "Bring Your Precedent Documents to Life - Just Add KM”.  

For legal advisory assistance or knowledge management solutions, just contact us for assistance.

At today's Sinch Online Legal Services Conference in Sydney, I presented on visualisation as a legal solution and explained how it is helping lawyers adapt and respond to change.  

To learn more on what I said about visualisation in law and the 3 key things that a legal practice can use visualisation technology for, read my blog on Encompass News.

My presentation was also reported here.

Only very recently, Forbes published an article on data visualisation, or “dataviz”, as they have called it.  It pointed out that progressive organisations today are using a wide array of dataviz solutions to ask better questions of their data and make better business decisions.

I asked the conference attendees this question – how is your legal practice using dataviz?  I wanted everyone to have a think about whether they have an interactive solution designed for professional audiences that can tease out connections and turn complex data into simple pictures.  I certainly hope the answer is yes, because, among other things, embracing dataviz also means creating differentiation and enhancing competitive strength.

This Friday (2 May 2014), I will be speaking at the Sinch Online Legal Services Conference 2014.  This is a full day event which will take place at the City Tattersalls Club in CBD Sydney.

The conference "will feature 25+ leading legal business & IT visionaries who will share their real-world experience about the most crucial issues affecting you and your clients".  I am delighted to speak about a topic close to my heart - visual information management.  

The reason why the practice of law is experiencing major changes is largely because of information and communications technologies are now easliy available and at very competitive prices.  Law firms need to respond to the revolution and look for new solutions that will enable them to respond fast.  A good example of this tecnology is visualisation as a legal solution (such as Encompass).  I have written about this in my earlier blog - "Five reasons to make visualisation your friend".

Read more about the Sinch conference on Legal Practice Intelligence, or you can access the conference details directly from Sinch's website.  I will share my thoughts on the conference over the coming weeks.

The Personal Property Securities Amendment (Motor Vehicles) Regulation 2014 (Cth) was registered on 1 April 2014.  It will commence in 3 months on 1 July 2014.  The new Regulation narrows the definition of motor vehicle for the purposes of the Personal Property Securities Act 2009 (Cth) (PPS Act). 

The new Regulation has a grand total of only 4 pages, which includes the cover page and the contents page.  The operative provisions consist of merely a few lines on the last page, which repeals paragraph 1.7(2)(b) of the current Regulation and substitutes the existing wording with this wording “(b) is capable of a speed of at least 10 km/h; and (ba) has one or more motors that have a total power greater than 200W” (emphasis added).

So what does this mean?  The current definition of motor vehicle provides that a motor vehicle is personal property built to be propelled wholly on land, by a motor that forms part of the property, and that either is capable of a speed of at least 10km/h, or has one or more motors that have a total power greater than 200W.  The amended definition will provide that personal property must have both of these characteristics to qualify as a motor vehicle.

And what impact will this have?  The Explanatory Statement (ES) to the new Regulation explains the impact in one succinct statement – “The narrowing of the definition reduces the number of goods that will be motor vehicles, which in turn will reduce the number of security interests which may require the making of separate registrations against the serial number of the goods involved rather than only a registration against the party granting the security interest.”

The ES also explains that the objective here is to “reduce the costs of complying with the PPS Act for small and medium equipment hire businesses whilst still maintaining the utility of the Register as a record of interests in personal property for third parties”.

Both the Regulation and the ES can be accessed here.

It is fair to say this is probably the first of a series of changes about to take place.  The PPS Act is now over 2 years old.  Last week, on 4 April 2014, the Commonwealth Attorney-General, Senator the Hon George Brandis QC, said it is timely to review the PPS Act’s effect to ensure it is meeting its objective of providing greater certainty to lenders and helping business, especially small business, to access finance.  The Government is undertaking a review into the PPS Act, and an interim report is due on 31 July 2014.  The interim report will focus on issues raised in relation to small businesses.  The final report is due on 30 January 2015.  Time will tell whether and how the review and the recommendations that follow will change Australia’s personal property securities regime.

This post first appeared on CPD Interactive's "Legal Natter's Blog".

First of all, some definitions.  Personal information is, in essence, information that identifies a person or could reasonably identify a person; data breach means unauthorised access to, or disclosure of, personal information; and serious data breach means a data breach where there is a real risk of serious harm (including reputational, economic and financial harm) to the affected individual.

We will all agree that a data breach, especially if it is serious, can severely adversely impact on the individual’s whose personal information has been compromised.  For example, the affected individual can be exposed to the risk of fraud and identity theft.  Prompt notifications will allow individuals to take action to protect themselves.

Data breach notification has been in the spot light for some years now.  Those of us who have been following Australia’s privacy reforms will recall that in its 2008 privacy report, the Australian Law Reform Commission (ALRC) noted that there was an increasing risk that the huge volume of personal information collected by government agencies and large corporations could become subject to data breaches.  At the time, the ALRC already recommended mandatory data breach reporting.

Late last week, we saw the Privacy Amendment (Privacy Alerts) Bill 2014 being re-introduced into the Federal Parliament (on 20 March 2014).  The Second Reading Speech pointed out that the re-introduction of this Bill is the next key step in the major reform of Australia's privacy laws.  The Bill provides that when a government agency or an organisation has suffered a serious data breach, it must notify the affected individuals and the Office of the Australian Information Commissioner (OAIC).

Currently, there is no requirement for agencies and organisations to notify affected individuals or the OAIC when they have suffered a data breach.  The OAIC has voluntary guidelines encouraging notification, but is concerned that many data breaches remained unreported.  It is intended that the Bill, when it becomes law, will see the long overdue measure recommended by the ALRC go live, stop the gap in Australia's privacy laws and position Australia as a global leader in privacy protection.

This post first appeared on CPD Interactive's "Legal Natter's Blog".

We can help you understand the Privacy Act (by way of privacy training, for example) and, importantly, we can provide you with a privacy policy and privacy compliance plan tailored to your needs and in compliance with the law - just contact us for assistance.

We all know that the Privacy Act is the law which regulates the handing of personal information about individuals.  But do you know that the most significant development in privacy law reform since the Privacy Act was first introduced in 1988 is about to commence?

The Privacy Amendment (Enhancing Privacy Protection) Act 2012 is a part of the privacy law reform process that began in 2004.  It introduces many significant changes to the Privacy Act which will commence shortly on 12 March 2014.  The Australian Privacy Principles (often abbreviated to the “APPs”) takes centre-stage in the reform, and they replace the National Privacy Principles and Information Privacy Principles.  Many of the APPs are different from the existing principles, including the APPs relating to use of personal information for direct marketing and cross-border disclosure of personal information.

A new mandatory Credit Reporting Code of Conduct will also take effect on 12 March.  The Code operates alongside the Privacy Act, and it regulates the exchange of information between “credit providers” and “credit reporting bodies”.  “Credit providers” and “credit reporting bodies” both have special meaning as defined by the Privacy Act.

The first step to Privacy Act compliance is to understand the APPs.  The Office of the Australian Information Commissioner (OAIC) has issued APP guidelines, and both the APPs and the APP guidelines are available on the OAIC’s website.  Sound APP knowledge is essential to lawyers regardless of which area they practice in.  This is because not only they are often required to advice clients on privacy matters, but often they themselves will also need to comply with privacy legislation.

This post first appeared on CPD Interactive's "Legal Natter's Blog".

We can help you understand the APPs (by way of privacy training, for example) and, importantly, we can provide you with a privacy policy and privacy compliance plan tailored to your needs and in compliance with the law - just contact us for assistance.

Inaugural blog post to answer frequently asked SME questions

At Legal Know-How, we work with many small and medium enterprises (SMEs) and we get asked a lot of legal and business questions. From time to time, we will answer a frequently asked SME question via this blog. You can filter our blog post by choosing "SME Q&A series" to quickly locate and read the relevant posts.

IP rights

In the past fortnight alone, we have been asked on 3 separate occasions on matters relating to intellectual property rights. Intellectual Property, or "IP", is a term that describes the application of the mind or one's intellect to create or develop something new or original. IP Australia is the Australian Government agency that administers IP rights and legislation relating to trade marks, patents, designs and plant breeder's rights. Copyright and circuit layout rights are also IP rights but they are considered "automatic rights", in that they do not need to be registered. 

Why is IP important to SMEs?

Why is IP so important? IP Australia summarised the reason very well in just 1 sentence - "IP is an important asset in today's knowledge economy and should be strategically managed." IP certainly is important to large corporations, but it is equally important to SMEs.

Copyright, trade marks and patents are probably the 3 most asked about categories of IP rights, and below is an outline on each.

Copyright
From the time an original idea is documented, it is automatically protected by copyright in Australia. This means that the copyright owner does not need to specifically apply for copyright protection. It is important to remember that copyright protects the original expression of an idea, as opposed to and distinct from the original idea itself.  

While not strictly necessary, it is wise to mark any original work with the copyright symbol ©. This could help deter others from infringing on the copyright owner's copyright. It is also wise to keep a contemporaneous and comprehensive record of the creative process. This could help prove that the copyright owner indeed is the copyright owner.

The Australian Copyright Council has a "find an answer" page that contains user-friendly information sheets about copyright. This can be a handy resource for SMEs.

Trade marks

IP Australia provides a concise definition of trade mark - "A trade mark is a way of identifying a unique product or service and it can be your most valuable marketing tool. Sometimes called a brand, your trade mark is your identity - the way you show your customers who you are." Some common categories of trade marks include a word (such as "Coca Cola"), a logo (such as QANTAS' "flying kangaroo") and a phrase (such as Nike's "just do it").

People often associate or identify a quality or a reputation with goods and services bearing a particular trade mark. A trade mark can be very valuable to a SME, and the more successful the SME, the more valuable its trade mark becomes.

Registration is not a prerequisite to use a trade mark but there are certainly benefits of registering a trade mark. A key benefit is that the registered trade mark holder has the exclusive right to use the trade mark as specified in the registration.  

Registration fees for trade marks vary and the current fees can be accessed here. The registration process can take around 8 months to complete. Once registered, the trade mark can bear to symbol ®. An unregistered trade mark or one that is being registered can bear the symbol ™.

Patent

IP Australia defines patent as "a right granted for a device, substance, method or process that you have invented that is new when compared with what is already known. A patent is legally enforceable. It gives you the exclusive right to commercially exploit your invention for the life of the patent."

The invention claimed in a standard patent has to be totally new, it cannot be an obvious thing for someone in the same industry to do (this is called satisfying the "inventive step") and it has to be able to be made or used in that industry.  

Of the 2 types of patents available, standard patents has an application process which is quite involved and also quite time consuming. For example, the examination stage alone can take from six months to several years. A registered patent does give the patent owner long-term protection and control over the invention. As an example, pharmaceutical companies often patent their inventions relating to pharmaceutical substances.

The other type of patent is an innovation patent. It is for the protection of inventions that do not satisfy the "inventive step" for standard patents. Innovation patents have to satisfy the "innovative step" instead, which means the subject matter must be different and improved from what is known before.

IP Australia states that an innovation patent is usually granted within a month of filing the complete application, so it is a relatively quick (and less expensive) way to obtain protection for a new device, substance, method or process. However, IP Australia also warns that, while there is no mandatory examination before an innovation patent is granted, it is only legally enforceable if it has been examined and certified. Accordingly, it is advisable to request that an innovation patent be examined.

Again, registration fees for patents vary and the current fees can be accessed here. 

A word of warning - do not disclose an invention or innovation before filing a patent application. If the invention or innovation has to be discussed (such as with a sponsor or an investor), only do so with a confidentiality agreement. "Going public" without a non-disclosure arrangement in place can risk a patent application being rejected.

We can help you understand your IP rights and, importantly, we can quickly provide you with a confidentiality agreement to protect your interest - just contact us for assistance.

On 28 January 2014, ASIC announced that it has released a report (REP382) outlining decisions on relief applications between June and September 2013 from provisions of the Corporations Act 2001 (Cth), National Consumer Credit Protection Act 2009 (Cth) or the National Consumer Credit Protection (Transitional and Consequential Provisions) Act 2009 (Cth). Among other things, the report contains examples of situations where ASIC has provided no-action letters.

A no-action letter states to the applicant of the letter that ASIC does not intend to take regulatory action over a particular state of affairs or a particular conduct. It is not a legal opinion and it does not constitute legal advice, and, importantly, it can be withdrawn at any time. While a no-action letter is not a guarantee that ASIC will not take regulatory action in the future, it does provide some conform and a degree of certainty that ASIC is not expecting to take regulatory action in relation to the state of affairs or conduct in question.  

ASIC's Regulatory Guide 108 (RG108) is the "go to" guide for those who wish to apply to ASIC for a no-action letter. It explains how to make an application and sets out the factors ASIC considers when dealing with a request for a no-action letter (such as the contravention was due to inadvertence and that the adverse effects on third parties are minimal).

In REP382, under the heading "credit licensing", ASIC reported that it has provided a no-action letter in relation to the potential contravention for engaging in credit activities outside credit license authorisation. ASIC also reported that it has provided a no-action letter for early debit or payment of interest charges under a credit contract. For both scenarios, ASIC explained its reasons for providing a no-action letter.

If you experienced an unintended contravention of the relevant legislation as a result of conduct that is not inconsistent with the spirit and policy of the legislation, and you wish to apply to ASIC for a no-action letter, carefully considering REP382 in conjunction with RG108 will certainly assist you in preparing your case and presenting it to ASIC.