The Information Commissioner Bill 2010 (IC Bill) and the Freedom of Information Amendment (Reform) Bill 2010 (FOI Bill) were recently introduced by Parliament. These proposed changes to freedom of information laws are aimed at better public access to Government information.

The IC Bill proposes that the Information Commissioner should have broad discretionary powers when assessing the merit of decisions taken by Ministers and other Government agencies. The Privacy Commissioner needs approval from the Information Commissioner before issuing any privacy rules.

Another important purpose of the FOI Bill is to create more transparency in the Government. This is at the heart of these reforms. These initiatives are also focused at engaging and empowering citizens. It is endeavored that these Bills will improve the relationship between the private and public sectors – mutually benefitting both.

The current Commonwealth Ombudsman, Professor John McMillan AO has been appointed as the new Information Commissioner in February 2010. The two Bills received Royal Assent in May 2010. The Bills are now officially the Australian Information Commissioner Act 2010 (AIC Act) and the Freedom of Information Amendment (Reform) Act 2010 (FOI Reform Act).

It remains to be seen how far these Bills will deliver as promised. However, these reforms will test the government’s commitment to sharing public sector information and will also depend on the use we make of it.

In an ongoing ‘food fight’ between Food Channel Network Pty Ltd v Television Food Network GP [2010] FCAFC 58,  the Federal Court recently upheld Food Channel Network’s appeal over its trademark – ‘Food Channel’.

ISSUES AT THE TABLE

•    Ownership
•    Intention to use
•    Deceptive Similarity

WHO IS THE OWNER?

Channel Network’s name, prior to the dispute was ‘The Food Channel Pty Ltd’ (Channel) and Television submitted that Channel was therefore not the owner of the trademark, pursuant to Sec.58 of the Act.  

The issue of ownership came into picture as the trademark application was filed in the name of Channel in 2003 but was later allocated to Network. Paul Lawrence was the owner of both the Channel and Network units when the application was made and subsequently transferred.

The trial judge ruled that the burden of proof was upon Food Network to establish that Channel was the owner at the time of filling the trademark application, which it failed to satisfy.

However in an appeal by Network, the Federal Court held that it was incorrect to have shifted the burden of proof on Network. Without obtaining clarity, it was difficult to prove which entity was the first user.

Moreover Television had not demonstrated that there was a prior owner of the trademark, which would have defeated Network’s claim over the mark.

WAS THERE AN INTENTION TO USE THE TRADEMARK?

Another important issue that was set aside by the Court related to good faith or intention to use the Food Channel mark. The trial judge initially ruled that Channel lacked the bona fide intention to use the mark and Television was therefore successful in proving Sec. 59 of the Act.

Television argued that the evidence was submitted by Lawrence who was not an applicant in the matter – the fact that Network and Channel’s director was the same person did not tantamount to establishing intention to use.

However, after the Full Court stepped in, the reasoning of the trial judge was overruled. Lawrence’s evidence was considered – he controlled both entities and was able to prove use of the mark on recipe and menu cards.

SIMILARITY OF THE TWO MARKS

The Federal Court found that the trial judge had faltered in refusing to compare the two marks as a whole. This is the key exercise in resolving confusing similarities in most trademark disputes. It was found that the two marks were distinct from each other, visually, aurally and phonetically – the marks did not look the same and only had a common word element between them -‘FOOD’.

Moreover, the two marks were associated with different trades - Network applied under Class 16 and Television applied under Class 41. The trial judge had overlooked this significant difference as well.

FINDINGS

In light of the above reasoning and finding that the trial judge had incorrectly ruled on the matter, Network’s appeal was allowed and the opposition was set aside.

The new proposal to the business name registration system is likely to reform the registration of state based business entities.  The system is proposed to start in April 2011. Presently, every business name has to be registered in each state or territory in which that particular business operates. However, with the new proposal, the states have agreed to submit their business name registration powers to the National Government.

The goal behind the new reform is to have a uniform registration process for business names as well as ABNs, lessening the trouble on different business dealers. Moreover, the current system has different fee arrangements. Also, the registration periods are different for each state the business operates in. The proposed reform replaces the current fragmented system and hopes to provide a standardized registration system for businesses regardless of the different states the businesses operate within.

Key Characteristics

The new system is likely to have the following features:

1. Business or company names shall be registered nationally, unlike in each state where a business trades in;
2. Business names presently registered under the state business names shall be automatically rolled over into the new proposed federal system;
3. Businesses will only need to register their names once and not have to submit multiple applications for each state they hold their affairs in;
4. ASIC will be responsible for the registration and will be supported by ABR and IP Australia;
5. Businesses will be able to apply online and receive immediate confirmation of registration; and
6. Businesses will need to have an ABN for registering a new business name, but can register for a name at the same time as ABN registration.

Fees

Under the present system, the registration fee and time period varies with each state. The proposed system has a uniform fee for registering or renewing a business name -. businesses will have a choice of registration either for a one or three year period. The fee for registering and renewing the business name is the same i.e., $30 for 1 year and $70 for 3 years.

Currently, different companies with the same name can be registered in their respective trading states. When the proposed national system comes into place, to avoid duplicity, a suffix indicating the state in which the business trades will be added to each business name and such a business can also operate in any state of its choice.

The road ahead

The government will facilitate an online test whereby businesses can assess the likelihood of registrable names. This means that if a name is similar to a registered business or company name, misleading or offensive, it will be denied registration.  

Trademark searches will also be permitted during the application stage. However, the onus will still remain with the proprietor to ensure that any IP violation does not occur. Registration of a company name alone does not give the owner protection in terms of trademarks.

Franchisees will also need to register their desired franchise name in order to trade. However, the franchisee, under the proposed new system, will not need to submit a written consent to ASIC from the franchisor, although they must ensure they have to prove they can use the trade name.  

A recent Federal Court decision in Australia confirmed that the use of a trade mark in a domain name, coupled with use of the trade mark on allied web sites can amount to trade mark violation.

FACTS - Mantra Group Pty Ltd v Tailly Pty Ltd (No 2) [2010] FCA 29

·         Mantra, an on-site letting agent of apartments named 'Circle on Cavill' situated at Surfer's Paradise, Queensland was the plaintiff in this case.

·         Mantra held the rights to control and let apartments in the complex. Tailly, the defendant, on the other hand was an off-site letting agent for 'Circle on Cavill'.

·         Mantra owned the trade marks use of 'Circle on Cavill' as it had registered three marks each constituting the words 'Circle on Cavill'.

·         The defendant had made some expressive use of the words 'Circle on Cavill' to portray the apartment complex in the title, text and body of its web site - it had also registered the words 'Circle on Cavill' as its domain name.

LEGAL ISSUES

The question before the court was whether:

·         the defendant had used 'Circle on Cavill' as a trade mark and therefore violated the intellectual property rights of the earlier mark holder, Mantra;

·         Mantra contended that the defendant had breached its trade mark registration and had engaged in misleading and deceptive conduct under section 52 of the Trade Practices Act 1974.

REASONING

Tailly challenged Mantra by relying on section 122(1)(b) of the Trade Marks Act 1995 and stated that it had used the words in good faith to reflect the geographical location of its apartments.

The Court referring to the decision in the 'Chifley Tower' case (MID Sydney Pty Ltd v Australian Tourism Co Ltd (1998) 90 FCR 236.) accepted Mantra's contention and clarified that the defence under section 122(1)(b) applies only to indicate a location of a country, state, region, city, town or suburb - in the present case, the location of a place of business was not a part of the list provided under section122(1)(b).

FINDINGS

·         The Court found that the defendant had purposefully used the words 'Circle on Cavill' to obtain a commercial advantage for its business.

·         Considering the use of the words 'Circle on Cavill' by the defendant in context of the website as a whole, the court ordered in favor of Mantra, and held that the domain name be transferred to its rightful trade mark owner, Mantra.

·         The Court further banned Tailly from using the words as their domain name or a search engine optimization, trade name and for any source of promotion of its services.

LESSONS

·         This decision outlines the need of registering a trade mark, particularly for businesses which rely significantly on the use of their mark to promote their services and engage in trade. This includes property developers as well.

·         Property developers when deciding the name of the complex, apartment, or condo for instance, must register the trade mark before selling their property.

·         Registration alone is not enough although half the battle is won – actively protecting the mark against competitors and copy cats, will determine the remainder of victory.

The Trade Practices Act 1974 is now being replaced with the Competition and Consumer Act 2010. The Trade Practices Amendment (Australian Consumer Law) Bill 2010 (ACL) has recently been passed.

WHO WILL BE IMPACTED AND BY WHEN?

Essentially, any industry where a client is an individual who acquires goods, services or interests for personal or household consumption, will be greatly impacted by the new Act.

Developers involved in real estate transactions with consumers, intending to sell land under standard form contracts, will also need to carefully review the terms within those contracts.  

These changes will be implemented in two phases: post 1 July 2010 will deal with unfair contract provisions and 1 January 2011 onwards will focus on the remaining aspects of the ACL.

WHAT ARE THE KEY CHANGES?

• Overall, the consumer reforms are aimed at delivering better quality, increased protection to consumers and providing consistency throughout the country.
• The ACL will regulate consumer contracts for the sale of land for personal or domestic use. Contracts which grant an interest in land for private or residential use will be viewed stringently once the Act comes into force.
• Sales for investment purposes will not come under the Act.
• Unfair contract terms will form the key focus under the new regime. If a term of the contract is considered unfair or if a standard form contract is being used, the ACL will declare that term void.
• Consumers will receive significant protection under the ACL as Australian Securities and
  Investments Commission (ASIC) and the Australian Competition and Consumer Commission (ACCC) will now have enhanced enforcement options in helping aggrieved consumers.

WHAT SHOULD YOU DO?

• Ensuring that the entire contract complies with the new Act will be at the heart of all business discussions from now on. As a good starting point, familiarize yourself with the changes being introduced.
• Needless to say, businesses and consumers should carefully review the terms of contracts before entering into transactions.
• Unfair terms should be pointed out quickly and rectified before signing.
• The risk of the contract being declared unfair and penalties being incurred should be avoided.

What is a self managed superannuation fund?

A self managed superannuation fund is a concept of investing in a fund designed for an employee’s retirement. The members of these funds are treated as trustees. These trustees control their contributions as well as payments of their benefits.

Latest announcements

The Australian government has made recent announcements on superannuation funds. It has proposed changes to the administration rules, which if implemented, would enable superannuation fund members to consolidate and transfer their assets efficiently and effectively.

Some of the key aspects mentioned in the announcement on March 10th 2010 included:

the selling of instalment warrants to these funds to be specified as a financial product
the tax consequences affiliated to a fund held by a trustee, entering into a transaction, do not belong to the propertytrustee, but to the fund
the superannuation trustee when purchasing an asset, is to be treated as the owner of the asset when entering into non-recourse borrowing arrangement, for income tax purposes
it has been recommended that the property trustee under the arrangement should adopt a more active role in managing the asset

What are limitations of this announcement?

The announcement will not have any critical effect on the competence of Self Managed Superannuation Funds [SMSF], which aid in purchasing real estate as well facilitating that particular purchase. Moreover, the proposal will not extend to arrangements that are 'private' in nature.

What are the other changes?

There has also been considerable debate surrounding the income tax treatment of Instalment Warrants and the impact of section 67(4A) within the Superannuation Industry (Supervision) (SIS) Act.

It has been considered that the Government wants to achieve these changes with the use of instalment warrants. This is an investment that enables the purchase of an asset over time by making an initial part payment and then settling the remaining payment by way of instalments along with interest.

What are the concerns?

Critics have posed certain questions, answers to which do not appear clear at the moment. It is not certain how an instalment warrant trusts will be distinguished from other trusts. Other concerns included the role a trustee was required to play – what reporting requirements will a trustee need to follow in its relationship with a beneficiary.

One cannot assess the impact of these changes just yet but this announcement will encourage practitioners to update themselves and become more familiar with these changes and the exceptions under the proposal. Overall, consistency, transparency and clarity are the keys to seeing a successful implementation of this proposal.

The Personal Property Securities Act (PPSA) is expected to come into force on 11 May 2011. In anticipation, the government has advised ‘an early bird and worm’ strategy - the sooner businesses start restructuring and reorganizing, the easier it will be on commencement of the legislation in 2011.

Who will the PPSA impact?

Businesses and professional advisors such as financers and insurers, suppliers, manufacturers and lessors as well as insolvency practitioners will need to ensure they become PPSA compliant.

Key changes

• Stakeholders will be served by one national Act.
• This uniformity will be supported by a national online register of securities.
• Securities such as company charges and chattel mortgages will be registered in the new PPS register, no longer with ASIC.
• Conditional sale agreements, retention of title provisions, certain leases, interests in motor vehicles and boats will also be registerable interests in the PPS register.   
• On the other hand, some Registers will be discontinued and land and statutory licenses will not fall under the new register.

How should businesses respond?

Businesses should firstly become proactive, right away. Complacency should be fought even if May 2011 seems far away. The PPSA will demand significant transformation to the daily running of businesses. This time should be used to fully prepare for these changes, educate staff and customers and get ready to do business, differently. 

 In summary:

• Learn how your business can become PPSA compliant.
• Understand the impact the new regime will have on your business dealings whether you are a financial institution or a manufacturer.
• A comprehensive review of business security registers falling under the PPSA will be needed.  
• Work closely with professional advisors in restructuring business documentation, operating models and trading terms.
• Familiarize yourself with the consequences for failure to comply. This becomes particularly important if the security provider becomes insolvent where an unperfected security is involved.  
• Manufacturers will no longer remain owner of goods but become holders of security interests instead.

January 2010 has marked the start of exciting times for researchers, entrepreneurs and innovative companies - all thanks to an initiative launched by the Department of Innovation, Industry, Science and Research (DIISR).

This initiative is known as ‘COMMERCIALISATION AUSTRALIA’. The inspiration has come from the Australian Government’s effort to offer grants up to $50,000 to eligible candidates to help them gain expert business advice.

HOW DOES THE GRANT WORK?

IP Australia together with the DISSR is keen to encourage the conversion of ideas into thriving marketable business enterprises. This overlap of innovation will allow businesses to work closely with researchers and entrepreneurs.   

This grant includes fees for the cost of searching and filing a patent application together with examination and maintenance fees.  The grant also covers services such as intellectual property management.

This is a highly competitive program and is purely merit based. Commercialization Australia helps boost the skills and knowledge needed to better market and sell new ideas. The grant of $50,000 will go a long way in realising this idea in the business communities.

The focus, as the name suggests, is on commercialisation. The program provides individualised and focused assistance. The Case Manager understands the needs of each applicant and carefully guides them throughout the different stages in the commercialisation process.         

WHO IS ELIGIBLE?

Eligible applicants include companies, individuals looking to form a company, researchers in the private sector as well as universities and individuals. 

There are four components of funding. Applicants need to decide which component applies to them. This is a flexible program and applicants can submit single or multiple applications. The first stage assesses a Pre Application Form. If this is successful, the next stage involves assessment of the project itself. 

The time is now ripe for eligible stakeholders to make the most from this government initiative. This is also a great opportunity for companies to reflect on their potential and overcome any apprehensions.

It has been said that ‘An asset can be valued, invested in, sold and licensed. An idea cannot.’

Companies, no matter their size, may have excellent ideas. Implementing these ideas is where they take a beating. A lack of skills, resources, knowledge and ability to respond quickly enough, holds these companies back. 

This IP initiative in Australia will take businesses beyond the realm of just thinking – it will generate profitable and meaningful opportunities by helping to turn ideas into products and services.  

Times like these are ripe for starting up a charity.

This is thebrighter side of a financial crisis where redundancy and not-so-voluntaryretirement are becoming commonplace and demands for charitable services areincreasing.

Establishing a charity can be quite straightforward as long as thedominant purpose of the charity is for the benefit of the community and ischaritable in nature.  Education,health, science, religion, environment, social and community welfare are someexamples of well-accepted charitable purposes.

Eligibility

How does an organisation qualify for formal recognition as a charity? Inaddition to showing a dominant charitable purpose, the other eligibilitycriteria include:

·       being an appropriately formed institution,fund, foundation, trust or association. The organisation’s rules can be ofvital importance.

·       being non-profit. If the charity ispermitted to pay or make available any portion of its property or fundraising forthe benefit of any trustee or member, it will not qualify.

·       obtaining an ABN.

·       fulfilling the criteria forobtaining Tax Concession, Income Tax Exempt or Deductible Gift Recipient statusfrom the Australian Taxation Office (ATO).

Benefits 

Obtaining Deductible Gift Recipient status is one of the most popularbenefits. This essentially means that a donation to the charity will entitlethe donor to an equivalent tax deduction. Clearly, this is a significantinducement for fundraising.  Once acharitable  organisation has IncomeTax Exempt status, it will be relieved of liability for tax or GST on theincome it raises and generates.

Additionally, reduced start-up fees are charged for companiesestablished for a charitable purpose. Charities can also take advantage ofexceptions to the company naming provisions under corporate laws.

Ultimately, it is up to the law to decide whether a charity is eligiblefor the benefits. Assessing what structure best suits the organisation’sobjectives, choosing trustees or directors, settling rules of engagement, fundraisingand other legal formalities all need to be addressed within the overarchingregulatory framework.  Reconcilingthe initial noble motivation for forming the charity with the laws that governcharities can often be a challenge.