E-Commerce Update July 2005
09 August 2005- AIC releases paper on preventing spam
- EC releases FAQs on communications framework directive
- EC releases study detailing reform for Internet licensing
- ICANN releases domain name hijacking report
- Perth Federal Court issues interim injunctions under Spam Act
- Federal Court considers linking and copyright infringement
- WIPO axes phoney Commonwealth Games website
- Supreme Court on 'carrying on business' in Australia
- WIPO—selling domain names for profit not in bad faith
E-Commerce — Australia
AIC releases paper on preventing spam
On 7 July 2005, the Australian Institute of Criminology (AIC) released a paper entitled Preventing spam (paper).
The paper lists governments, law enforcement agencies, internet service providers and corporations as stakeholders who have a role in mitigating the impact of spam, and details how individuals can protect themselves against the occurrence of spam.
A copy of the paper is available from the AIC website.
E-Commerce — International
EC releases FAQs on communications framework directive
On 14 July 2005, the European Commission (EC) released Electronic communications: the Article 7 procedure and the role of the Commission — Frequently Asked Questions (report).
The report articulates the operation of Article 7 of the Electronic Communications Framework Directive ((2002/21/EC) (Article 7), which acts as the EC’s primary method of electronic communications regulation.
Under Article 7, national regulatory authorities (NRAs) and industry must analyse their national markets for electronic communications and suggest regulatory measures to rectify market failures. These findings and proposals must then be reported to the EC as well as other national authorities.
The EC assesses each proposal by appointing a case team of officials to analyse the proposal and request any additional information from the relevant NRA required to conduct the assessment. The assessment must be completed within one month, after which time the commission may make comments. If the EC expresses serious doubts about the compatibility of the notified measure with community law, the investigation period is extended by two months, after which the EC may withdraw its serious doubts, make comments or exercise its power of veto, in which case the NRA must withdraw its proposal.
Further detail is available at the EC website.
EC releases study detailing reform for Internet licensing
On 7 July 2005, the European Commission (EC) released a study entitled Music copyright: Study on a community initiative on the cross-border collective management of copyright (study) on how music copyright is licensed for internet use.
The study highlights a need for attractive content for online exploitation in order to enhance growth of legitimate online content services. The study proposes the creation of a Europe-wide copyrights clearance system, and suggests a series of principles required to establish such a system.
Services targeted in the study include internet services such as simulcasting, webcasting, streaming and downloading, all of which can be accessed throughout Europe.
Further details and a copy of the study are available at the EC website.
Domain names
ICANN releases domain name hijacking report
On 12 July 2005, the Internet Corporation for Assigned Names and Numbers (ICANN) released a report entitled Domain Name Hijacking: Incidents, Threats, Risks, and Remedial Actions (report).
Domain hijackings involve the wrongful taking of control of a domain name from the owner and are often intentional acts posing serious risks to registrants, registrars, resellers, registries and end users.
The report was prepared by ICANN’s Security and Stability Advisory Committee to outline the risks and threats commonly associated with domain hijacking.
The report also makes a number of recommendations as to how registrars and registries might best protect domain names.
A copy of the report can be downloaded from the ICANN website.
Cases
Perth Federal Court issues interim injunctions under Spam Act
On 20 July 2005, the Federal Court of Australia in Perth issued interim injunctions against Clarity1 Pty Ltd (Clarity1) and its managing director, Mr Wayne Mansfield, following allegations by the Australian Communications and Media Authority (ACMA) that Clarity1, under the direction of Mr Mansfield, sent up to 56 million commercial emails within 12 months of the commencement of the Spam Act 2003 (Act).
Justice Nicholson made the orders under the Act after the ACMA requested that injunctions be imposed.
The interim injunctions mean that Clarity1 may not send commercial emails with an Australian link (as that term is defined in the Act) to any electronic address unless the prior consent of the recipient is obtained under the Act, or the sending of the email is otherwise permitted by the Act.
Further detail is available from the ACMA website.
Federal Court considers linking and copyright infringement
On 14 July 2005, the Federal Court of Australia (court) delivered its decision in Universal Music Australian v Cooper.
The court held that Stephen Cooper, the owner and operator of MP3s4FREE website (Website) and E-Talk Communications, the internet service provider (ISP) that hosted the website and other entities (E-Talk) had authorised breaches of copyright by users of the Website.
In the proceedings, the plaintiffs alleged that by clicking on a hyperlink on the Website, users were led to a other websites from which they could access music files and music in MP3 format.
The court found that although merely providing a link to copyrighted material was not an infringement, Mr Cooper had sufficient control over the Website and could have prevented the infringements by removing, or overseeing the insertion of, the hyperlinks.
The court also held that E-Talk, as the Website’s ISP, could have taken the Website down upon learning of the copyright infringements.
For further details, see the article by Freehills Senior Associate Campbell Thompson discussing the decision here.
A copy of the decision is available from the Federal Court website.
WIPO axes phoney Commonwealth Games website
On 16 June 2005, the World Intellectual Property Organisation Arbitration and Media Centre delivered its decision in Melbourne 2006 Commonwealth Games Corporation v B & M Group Of Companies Pty Ltd.
The Melbourne 2006 Commonwealth Games Corporation (complainant) is the owner of numerous trademarks in Australia and domain names associated with the Melbourne 2006 Commonwealth Games.
On 28 January 2005, Mr Brendan McKenna, sole director and secretary of B & M Group of Companies (respondent), informed the Premier of Victoria that the respondent had acquired the website www.melbourne2006.com (domain name). The respondent later offered to rent the domain name and a number of other domain names (disputed domain names) to the complainant for $49,000 per month.
The complainant alleged that the disputed domain names were confusingly similar to its trademarks, particularly the complainant’s trademark rights in 'Melbourne 2006'. The complainant also alleged that the respondent had no rights or legitimate interests in the disputed domain names, and had used them in bad faith.
Sole Panellist Andrew Frederick Christie held that the respondent was aware of the complainant’s legitimate rights to the disputed domain names. Accordingly, the respondent could not legitimately use the disputed domain names.
Further, the respondent’s attempts to rent the disputed domain names for an excessive amount was found to constitute use of them in bad faith. The Panel also found that the disputed domain names were confusingly similar to the 'Melbourne 2006' trademark in which the complainant had rights in Australia.
The Panel ordered that the disputed domain names be transferred to the complainant.
A copy of the decision is available from the WIPO Arbitration and Mediation Center website.
Supreme Court on 'carrying on business' in Australia
On 9 June 2005, the New South Wales Supreme Court (court) passed judgment in Gebo Investments (Labuan) Ltd v Signatory Investments Pty Ltd; Application of Campbell & Ors.
LifeWealth 8 Ltd (LifeWealth) was incorporated in Malaysia in 2002 and conducted business over its website, where customers made online credit card payments in order to gain access to a simulated stock market activity. Over 2000 Australian residents used LifeWealth’s website.
Upon LifeWealth ceasing operation, a number of shareholders successfully applied for LifeWealth to be wound up under section 583 of the Corporations Act 2001 (Cth) (Act). Another group of shareholders (applicants) brought interlocutory proceedings to have the winding up order set aside on the basis that the court did not have jurisdiction over LifeWealth as it was not a Part 5.7 body for purposes of the Act. It was argued that LifeWealth either had not carried on business in Australia, or if it had, it had ceased to do so before the winding up action.
Barrett J dismissed the application. His Honour held that LifeWealth had carried on business in Australia by employing a computer technician for its Australian business, and also through a series of communications in Australia by LifeWealth’s de facto directors in bringing a separate litigation action. LifeWealth was therefore a Part 5.7 body susceptible to a winding up order under section 583 of the Act, despite having ceased to carry on business in Australia prior to the winding up action.
A copy of the decision is available from the Austlii website.
WIPO — selling domain names for profit not in bad faith
On 9 June 2005, World Intellectual Property Organisation Sole Panellist Hub J Harmeling delivered his judgment in Automóviles de Luarca SA v NUCOM, Domain Name Brokers.
Autom#viles de Luarca SA, incorporated in Spain (complainant) registered the domain name alsa.es in 1996. The complainant was also the registered trademark owner in Spain of 'A.L.S.A' (ALSA mark). NUCOM, domain name brokers, incorporated in the United Kingdom (respondent), registered the domain name alsa.com (disputed domain name) in 1999.
The complainant argued that the disputed domain name was identical to the ALSA mark, the respondent had no rights or legitimate interests in the disputed domain name, and the respondent had registered it in bad faith.
The respondent admitted that it had registered the disputed domain name for the purpose of reselling it for a profit, as it believed it was a highly marketable domain name with many different possible end users. The respondent argued that the complainant had no worldwide trademark in, or exclusive rights to, the ALSA mark, due in part to the fact that the complainant’s business spanned only a few countries.
Panellist Harmeling dismissed the complaint. Although Panellist Harmeling agreed with the complainant in relation to the confusing similarity of the disputed domain name to the ALSA mark, and the respondent’s lack of legitimate interests in the disputed domain name, Panellist Harmeling also found that it was not bad faith to deal for profit in domain names which have many end users. Further, the respondent, being in a different country from the complainant, should not be deemed to be aware of the complainant and its domain name.
A copy of the decision is available from the WIPO Arbitration and Mediation Center website.
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