+ IT Law Update - Autumn 2008

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Copyright protection of data bases

Compilations can be protected as literary works under s 10 of the Copyright Act 1968. However, literary works must be original in order to attract copyright protection. The term originality conjures up notions of creativity, skill and labour which must have been expended on a work. But compilations lack elements of creativity or innovation. Can they nevertheless be original?

In Desktop Marketing Systems –v- Telstra Corporation [2002] FCA FC 112 , the court concluded that the test of originality in relation to compilations does not require elements of creativity in the selection of the elements included in a compilation or in the arrangement of a compilation.

So then, what is the test for infringement of copyright in a factual compilation? In the Desktop case it was held that: (i) infringement of a factual compilation is tested by reference to the interest which copyright is intended to protect in the particular case. (In Desktop, this was found to be the labour and expense of gathering together the contact details of all the individuals in question, and not the labour and expense of arranging the details in a certain form, because there was only one way to arrange the details in the Desktop case and that was alphabetically); and (ii) Copyright in a factual compilation will only be infringed if a substantial part of the copyright work is taken.

The judges went on to say that substantiality is to be defined by reference to the originality of the part of the work taken which again depends on the skill and labour involved.

In Nine Network Australia Pty Ltd –v- Ice TV Pty Ltd [2007] FCA 1172, the Federal Court rejected a claim by Channel Nine that an electronic program guide developed by Ice TV Pty Limited infringed copyright in Channel Nine’s hard copy program schedules.

In Ice TV, Bennett J combined the two Desktop principles set out above and stated that in determining whether the defendant has taken a substantial part of a work, the impact of its copying on the interests protected by the copyright is relevant. The Court found that Ice TV Pty Limited had gathered the information for its electronic program guide using its own skill and labour and without copying substantial parts of Channel Nine’s weekly schedules.

The Court acknowledged that Ice TV took snippets of information from the aggregated guides which were the skill and labour of Channel Nine but Channel Nine failed to show that the quality of the time and title information copied by Ice TV Pty Limited was of such importance in the context of the weekly schedules that the taking of them constituted a copying of a substantial part of the weekly schedule.  

Does a successful bid on an eBay “online auction” create a binding agreement to buy and sell?

In Smithe –v- Thomas [2007] NSWSC 844, the defendant listed his Wirraway aircraft for ten days on eBay with a notation that a minimum bid of $150,000 was required. The plaintiff placed a bid in accordance with the eBay rules for $150,000 but the defendant did not want to accept that bid.

In finding for the plaintiff, the Court dismissed the notion that the presence of an auctioneer is a critical feature of an auction. His honour stated that online auctions are a species of auction and the Court noted that in accepting eBay’s terms and conditions, registered users agreed to allow eBay or its computer to automatically close the bidding at a fixed time.

In this regard, the Court accepted that clause 5.2 of the eBay user agreement indicated that the intention of the bidding process was to create a binding agreement between the buyer and the seller.

The Court’s decision will undoubtedly be welcomed by online entrepreneurs seeking to encourage consumer confidence in online purchases.

 Wine and Websites

In Arms –v- WSA Online Limited (2005) FCA 943, Arms intended to set up an online business by which customers could buy wine at cellar door prices over the internet. The business would earn income by charging a commission on each sale made through the website.

“eGate” was recommended by WSA as an appropriate system for online payments. In this case, WSA did not actually supply the “eGate” facility but had bought it from the ANZ bank which was a contractor.  But once installed, the “eGate” payment facility could not process all the transactions.   Arms sued, claiming breaches of the Trade Practices Act’s implied warranties of (i) rendering services with dure care and skill and (ii) rendering services reasonably fit for the purposes for which they were being acquired.

However, the implied warranties only apply to contracts under $40,000, and even though the contract set out a maximum price for the WSA services which was under that figure, the actual price eventually paid under the contract was significantly more than that, and the Court found that the implied warranties accordingly did not apply in this instance.

So? Well, firstly, always set out in your contract the warranties implied by law. Secondly,   before making statements about a third party service or product,  always ensure that you verify those statements or make it clear to your customer that you are merely passing on information from that third party otherwise you may be held liable for damages resulting from any inaccuracy in that information.

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