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Intellectual Property | von Muenster

CommsCon 2014

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Firm principal Stephen von Muenster recently attended Mumbrella’s CommsCon on 20 March 2014. He presented a question and answer session on ‘Managing Risk: How to keep your brand on the right side of the law.’

CommsCon

During this session, Stephen was asked questions relating to a number of legal areas. Below are some key take outs from the session.

Copyright:

I run a small PR agency. When I help a client get great publicity in the newspapers, I sometimes scan in the clippings and put them on our website, and also send them a copy. I’ve heard I could get into trouble for this. What should I do?

• Copyright protection automatic and applies to editorial works if there is a reproduction of a substantial or important part of an original work

• No copyright in linking to the article; no copyright in simply the headline of the article

• For reproduction in full, including on the Internet, get a licence from Copyright Agency Limited (CAL) for the use as this is a collecting society that manages a number of publishers’ interests

Libel:

We look after a client’s Facebook page. Sometimes the public say some pretty offensive things in the comment thread about the brand, or other people. If it’s libellous are we liable?

• Under Defamation Acts (2006) defamation can occur where one person publishes content [words, sound, video, images] that damages reputation of another identifiable person

• Liability for defamatory publication can extend to a brand where the brand is able to exercise control over a publication, there is knowledge of the publication and there is a failure to prevent or remove the publication by a third party, eg on a brands blog or Facebook page etc

• Have clearly stated community guidelines and netiquette outlawing personal attacks, vilification and defamation. Such comments would also be a breach of Facebook’s Rights & Responsibilities

• Actively moderate or review blog postings / comments and remove those that breach community guidelines or rules of social media site – do not rely on users to tell you

• Remember the case of Federal Court decision in Seafolly Pty Ltd v Madden highlights social media legal media risks in the areas discussed above, including:
o Misleading & deceptive conduct
o Injurious falsehood
o Copyright infringement
o Defamation

Privacy:

I help run the social media community for several of our clients. Are there any implications of the changes to the privacy laws in how I share any information we gather?

• You need an up to date privacy policy

• You need a compliant collection statement at the point you collect personal information

• All direct marketing via ANY channel (including banners and social) that uses personal information needs to comply with APP 7 (direct marketing)

• Direct marketing can be via any channel including:
o Telephone
o SMS
o Mail
o Email – eg using personal information provided by customer in the course of signing up for a loyalty program
o Online advertising – including targeted advertising when browsing
o Social advertising – eg facbook user ID’s, displaying an ad on social media to an individual using personal information (including data collected by cookies dropped as a result of the individuals site visits)

Non-competes

I’m about to change agencies. I’ve got a great relationship with a couple of clients, and I think I can persuade them to come across. I also happen to know that the contract is up soon. Are there any risks in getting involved in bringing them in?

• Comes down to your contract

• Usually we see non-competes and non-solicits

• Non compete means you cannot work for a competitive business but these are difficult to enforce against employees who need to earn a living in their chosen profession – unreasonable restraining

• More enforceable if can be proven are the non-solicits of clients of the former agency or employees of the former agency

• Also need to consider confidential information and IP issues that arise in employment contracts

Non-competes

I’m tired of training up staff, then just as they are becoming useful they get poached for more money and move to a rival. Is there anything I can do to stop them from working somewhere else?

• Pay them more money

• Bonus incentives tied to loyalty and staged payments

• Enforce non-solicits if applicable

Intellectual property:

I’ve had a great business idea. But I did some of the work on it during my lunchbreaks. If I go out on my own can my employer claim they own the idea?

• Need to check your employment contract to see if there is anything said as to what is “during the course of employment”. It may cover lunchbreaks particularly if you are using company assets eg computers, resources etc to develop your idea.

• Need to consider if the ‘idea’ is IP – if it is something protected by copyright and it is in the course of employment then agency will own the IP

• If it is an idea only it may be protected by employment contract and the common law obligations of confidence that an employee has to his or her employee

• Best to come up with your ideas at home out of work duty hours and only tell your employer of your idea if you agree with them up front that you own it at this stage

Debt collection

A relationship with a client ended badly. They haven’t paid their bills for the last three months, claiming they got no results. They had unrealistic expectations. They owe us about $20k. Should I sue?

• Depends on the circumstances of course. There may be legitimate dispute here.

• If they never raised any concerns prior and now conveniently, after the relationship ends and you have issued final bills, they say they did not get what they paid for, they may find it hard to defend.

• Statutory demand is a possibility

• Always get legal advice

We are always happy to answer your questions. Please contact us on (02) 8221 0933 or via info@vmsolicitors.com.au if you have any further queries.

A Whopper of a Trade Mark Dispute

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A meaty dispute recently arose between a small hamburger shop and fast food giant Hungry Jacks. The take-away shop, in Wamberal on the Central Coast of NSW, has been serving the ‘Wambie Whopper’ for 20 years. It was reported that Hungry Jacks wrote to the owners, requesting that they stop using ‘whopper’ in their shop name.

Image: chichacha

When news of the letter broke on Facebook, Hungry Jacks was grilled on social media, with fans of the burger rallying to support the shop. Long-time Wambie Whoppers customer Matt Burke mustard huge support via Facebook by setting up the page ‘Save the Wambie Whopper’. The page received over 29,000 ‘likes’. A petition on change.org received over 5,000 signatures and Hungry Jacks’ own social media accounts were inundated with comments and criticisms.

Hungry Jacks found itself in quite a pickle, and following the backlash, the company withdrew its request.

The sauce of Hungry Jacks’ claim was likely based on trade mark and trade practices law. The word mark ‘Whopper’ was registered in December 1997 by the Burger King Corporation. However, if the term ‘Wambie Whopper’ was in use before the date of registration, the shop may have had a defense to any claim of trade mark infringement under the Trade Marks Act. The owners of Wambie Whoppers could have even considered taking action against Hungry Jacks under section 129 of the Trade Marks Act on the basis that Hungry Jacks had no grounds for making the threat.

It is also unlikely that Hungry Jacks would have been able to successfully argue that use of ‘Wambie Whopper’ is misleading and deceptive under the Australian Consumer Law. Lettuce be honest, it seems highly improbable that a reasonable consumer would consider that an association or connection exists between Hungry Jacks and Wambie Whoppers.

From a PR perspective, it seems to us that Hungry Jacks flipped out unnecessarily, to the detriment of its brand and reputation. As corporate conglomerate Unileaver found out earlier this year when it issued a legal letter to popular gelato bar Gelato Messina, strictly enforcing legal rights is not always the best course of action to take.

Reproduction of Editorial Content

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Copyright Agency Limited (CAL) is a copyright collecting society which collects and distributes copyright licence fees and royalties for text and images. CAL represents a number of publishers including Fairfax Media.

Image: Michele Ursin

It has come to our attention that CAL has been sending letters of demand to some PR agencies and brands alleging copyright infringement in respect of editorial content being reproduced on brand websites and requesting back payment of copyright licence fees.

Copyright protection automatically attaches to content that is ‘original’ and subsists in material form, including literary and artistic works. Text and images comprising editorial content would be works in which copyright subsists. Copyright affords the owner the exclusive rights to copy, publish, perform, broadcast, adapt, sell, license, import, communicate to the public and reproduce in material form (including on the internet) copyright protected creations.

The reproduction or copying of content in which copyright subsists constitutes an infringement of that copyright. An infringement of copyright will be deemed to have occurred where a substantial or important part of an original work is copied. The reproduction of editorial content on a brand or agency’s website would constitute infringement of the owner’s (usually the publisher’s) copyright.

In order to avoid infringing copyright, brands and agencies should refrain from reproducing editorial content on their websites without permission from the publisher or a licence from a collecting society such as CAL. As an alternative, brands and agencies may consider linking to online versions of the relevant editorial content as linking in such a way is unlikely to constitute copyright infringement.

This is general guidance only in respect of this issue. Should you have any specific concerns regarding your use of any editorial content, you should contact us. 

A Trade Mark Storm is Brewing in Melbourne

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In a noble move to enrich Australia’s cultural and historical legacy, boutique brewer Thunder Road Brewing is looking to revive many of Australia’s heritage beer brands, including Brisbane Bitter, Cairns Draught and Ballarat Bitter. However, their plans have gone slightly a-rye, as Carlton United Breweries (CUB) currently holds trade mark rights in the historic labels. Before the pints can be pulled, Thunder Road Brewery must have approximately 60 trade marks removed from the trade mark register. The company is seeking to have CUB’s trade marks revoked on the basis that they are no longer used by the brewing giant, a point vigorously contested by CUB.

Image: Quinn Dombrowski

And so the parties have hopped off to court. The bitter dispute was heard by a delegate of the Registrar of trade marks at IP Australia in Melbourne during April this year.

Under the Trade Mark Act 1995 (Cth), a trade mark may be removed from the register where there has been no use, or no use in good faith, of the trade mark for 3 years (an application cannot be made until after 5 years have passed from the original filing date). Any person can apply to have a trade mark removed from the register, provided they are willing to pay the application fees involved, thought to be approximately $13,000 in this instance. The opponent then bears the thirsty task of either demonstrating the necessary use or satisfying IP Australia that circumstances had prevented use, but that registration should continue.

This trade mark war may be likened to a bar room brawl. During the hearing, CUB argued that they had not abandoned the trade marks, pointing to the release of commercial batches of the heritage beers from time to time, which were sold in pubs and through outlets such as Woolworths and Dan Murphy’s. Thunder Road suggested that these releases were not genuine use of the marks, but merely a sham to retain the trade marks.

Ultimately the decision rests with IP Australia, which has a broad discretion and will consider each mark on a case by case basis. In addition to actual use, the delegate will look at factors such as residual reputation in the market. Even if Thunder Road legitimately gains use of the trade marks, consumers may still associate some or all of the labels with CUB. If the use of the labels by Thunder Road suggests an association or connection between Thunder Road and CUB where no such connection exists, there may be an infringement of the Australian Consumer Law (ACL) (now at schedule 2 of the Competition and Consumer Act 2010 (Cth)) and passing off under common law.

IP Australia’s decision is likely to be handed down in approximately 3 months time. For stubby trade mark holders, this case is a timely reminder that you should:

  • sit back, crack open a cold one and take a good look at your trade mark portfolio;
  • ensure that you are using your trade marks. Remember, such use must be use ‘as a trade mark’ to distinguish your goods or services from those of other traders; and
  • have another beer.

Cheers!

A Chilly Trade Mark Dispute in Our Backyard

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Sydney’s favourite gelato shop, Gelato Messina, recently found itself in a sticky and not-so-sweet trade mark dispute.  Last week Gelato Messina created the ‘Gaytime’ flavour as a tribute to both the Sydney Gay and Lesbian Mardi Gras and everybody’s favourite childhood ice-cream (in case you were hungry wondering, the flavour consisted of layers of caramel and milk gelato with chocolate coated biscuit bits).

Gelato Messina

But alas, this ice-cream made Unilever scream, presumably because Unilever did not like Gelato Messina’s use of their ‘Gaytime’ trade mark.

Gelato Messina was shown the cold shoulder and told in no uncertain terms to cease and desist from using the ‘Gaytime’ name. No doubt hoping all their troubles would just melt away, Gelato Messina promptly changed the sweet treat’s name to ‘the flavour formerly known as Gaytime’.

The situation, however, remained frosty. Unilever demanded that Gelato Messina change the name again, setting a 5pm deadline. Harnessing the power of social media, Gelato Messina appealed to its loyal fans on Facebook to rename the ice-cream.

Just in a lick of time, a gelato fan came up with the final name, which aptly sums up this trade mark dispute – UNILEAVE US ALONE.

Brands with a registered trade mark are entitled to protect their rights, and if Gelato Messina had not changed their flavour’s name, they may have found themselves involved in legal proceedings. However, from a PR perspective, brands may wish to take a more chilled approach to trade mark infringement. Asserting strict legal rights might not always be the best course of action to take.

Author’s note: some gelato sampling research was conducted during the writing of this blog post.

Swimwear designer in hot water for slagging off Seafolly on social media

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In the recent case of Seafolly Pty Ltd v Madden [2012] FCA 1346 (29 November 2012), the Federal Court found Leah Madden, principal designer of Australian swimwear label White Sands, liable for misleading and deceptive conduct and false representations under sections 52 and 53(a) of the Trade Practices Act 1974 (now sections 18 and 29 of the Australian Consumer Law in Schedule 2 of the Competition and Consumer Act 2010) for making statements on Facebook and in emails suggesting that Seafolly had ripped off her designs.

Image: Seafolly Pty Ltd v Madden

Background

After seeing a photo of Seafolly swimwear in a magazine, which she initially believed was her own creation, Ms Madden posted various comments on her personal Facebook page and the White Sands Facebook page implying that Seafolly had copied her swimwear designs, such as:

  • Seriously, almost an entire line-line ripoff of my Shipwrecked collection.
  • Ripping off is always going to happen, but sending in a dummy ‘buyer’ to get photos is super sneaky!

Ms Madden also posted to her personal Facebook page an album comparing eight photos of her garments alongside photos of Seafolly swimwear under the heading “The most sincere form of flattery?” Ms Madden then emailed a number of fashion and news publications replicating the Facebook album followed by the comment “Is it just us, or has Seafolly taken a little to [sic] much ‘inspiration’ from White Sands?

Once Seafolly became aware of Ms Madden’s claims as a result of the media interest and issued press releases denying her claims, Ms Madden took some of her Facebook posts down but continued to post comments on the White Sands Facebook page, such as “White Sands Australia says: bullies be gone and take your bully tactics with you! We tiny little fledgling designers will not be taken advantage of!

Claims

Seafolly sued Ms Madden on the following grounds:

  • misleading and deceptive conduct and false representations;
  • injurious falsehood; and
  • copyright infringement.

Ms Madden cross-claimed against Seafolly, for alleging in its press releases that her statements had been made with the malicious intent of damaging Seafolly, on the following grounds:

  • defamation; and
  • misleading and deceptive conduct.

Misleading and deceptive conduct / false representations

In light of the evidence that the Seafolly swimwear generally predated those of White Sands, the Federal Court determined that:

  • Seafolly did not copy the White Sands swimwear;
  • the Seafolly swimwear were original designs created by employees of Seafolly without reference to the White Sands swimwear; and
  • Seafolly did not use underhanded means to obtain photos of the White Sands swimwear and did not create the Seafolly swimwear using such photos.

The Federal Court rejected Ms Madden’s argument that her allegations were merely expressions of opinion and not statements of fact as, when read in context, her language conveyed that copying had in fact occurred. Even if her allegations could be understood as opinions, the Federal Court considered that she had been reckless in forming them. Ms Madden should have adopted a cautious approach as her allegations were made against a competitor and could potentially harm Seafolly’s reputation.

The Federal Court also rejected Ms Madden’s argument that her conduct was not ‘in trade or commerce’ as she had sought to influence the attitudes of customers and potential customers of Seafolly, a trade competitor, rather than merely provide commentary on industry matters.

The Federal Court accordingly found that Ms Madden had engaged in misleading and deceptive conduct and that she had made false representations as to the particular ‘style and model’ of the Seafolly swimwear. Ms Madden’s cross-claim for misleading and deceptive conduct failed as Seafolly’s allegations in its press releases that Ms Madden had sought to maliciously injure Seafolly were found to be true and not apt to mislead.

Injurious falsehood

While Seafolly could establish the first three elements of the tort – a false statement of or concerning Seafolly’s goods or business, publication of that statement by Ms Madden to a third person, and malice on the part of Ms Madden – Seafolly could not establish the final element of proof of actual damage suffered as a result of the statement. Seafolly’s claim for injurious falsehood consequently failed as Seafolly did not provide adequate pecuniary, as opposed to reputational, loss suffered by it as a consequence of Ms Madden’s allegations.

Seafolly were unable to sue for defamation as it is a company with ten or more employees. The Federal Court noted that this case illustrates the difficulty confronted by such companies when their commercial reputations are called into question.

Copyright infringement

Seafolly also failed in its claim for copyright infringement as the owner of copyright in the Seafolly swimwear photos at time of publication by Ms Madden was the photographer, not Seafolly. Although the photographer subsequently assigned copyright in the photos to Seafolly and the right to sue for past infringements, Seafolly did not adduce any evidence to demonstrate that the photographer, as opposed to Seafolly, had suffered any damage as a result of the publication of the photos.

Defamation

While the Federal Court found that Seafolly conveyed defamatory imputations of Ms Madden by asserting in its press releases that she had acted in a malicious way in order to harm Seafolly’s commercial interests, the Federal Court upheld Seafolly’s defences of:

  • justification, on the basis that Seafolly’s statements were substantially true given Ms Madden had acted maliciously with reckless indifference; and
  • qualified privilege, on the basis that Seafolly’s response was commensurate with the serious allegations made against it by Ms Madden.

As a result Ms Madden’s cross-claim for defamation failed.

Orders

The Federal Court ordered that Ms Madden:

  • pay:
    • Seafolly limited damages of $25,000 (for reputational damage only, as Seafolly could not establish any economic loss as there was no downturn in Seafolly’s sales and profitability); and
    • Seafolly’s costs; and
  • be restrained from:
    • reproducing or authorising the reproduction of the Seafolly photos without Seafolly’s consent; and
    • making, or aiding, abetting, counseling or procuring the making of, similar statements, representations or claims to third parties.

Regarding the award of limited damages only, the Federal Court noted that the Facebook postings were accessible to a relatively small number of ‘friends’ for less than two days, however the email to the media outlets had the potential to be widely published. Despite this, the email did not actually generate significant publicity in the mainstream press.

Key take-outs

This case serves as a warning to those who publicly shame brands on social media. It is important for brands to:

  • not be reckless in their commentary on industry matters and ensure they ascertain, or take reasonable steps to ascertain, the truth of such commentary before posting it to social media;
  • proceed with caution where such commentary relates to, or has the potential to harm, the trade or reputation of a competitor;
  • monitor their social media pages for posts that are potentially misleading or defamatory or may infringe copyright;
  • determine whether to treat, tolerate or take down these posts as soon as reasonably possible;
  • upload house rules to their social media pages clearly defining the standards of behaviour that users of the page must abide by;
  • implement company policy stipulating that their employees must not post anything to their personal social media pages that appear to be made ‘on behalf of’ the brand unless expressly authorised by the company; and
  • if in doubt, seek legal advice early before the issue escalates.

Lecture Title Falls Short

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They were short, stout and furry-toed, and their bones were discovered on the Indonesian island of Flores in 2003. Their full name is Homo floresiensis, or Flores Man, but you might know them better as hobbits.

Image: Jemimus

However, with the new film ‘The Hobbit’ now hitting cinemas, a recent incident in New Zealand has provided a warning to all those who refer to this extinct species as ‘hobbits’.

Dr Brett Alloway, of Victoria University, organized a free public lecture about Homo floresiensis alongside the two archaeologists who discovered the species, Professor Mike Morwood and Thomas Sutikna. The lecture, titled ‘The Other Hobbit’, was scheduled to coincide with the release of the movie ‘The Hobbit’.

Dr Alloway sought permission to use the lecture title from the Saul Zaentz Company/Middle-Earth Enterprises, which owns certain rights in The Hobbit. A law firm acting for the company banned Dr Alloway from calling his lecture ‘The Other Hobbit’, noting that ‘it is not possible for our client to allow generic use of the trade mark ‘Hobbit.’

A disappointed Dr Alloway changed the name of his lecture to the less catchy ‘A newly discovered species of Little People – unraveling the legend behind Homo floresiensis.’

Although Dr Alloway did not choose to fight the Saul Zaentz Company, it is arguable that Dr Alloway’s lecture title was not a breach of trade mark law. Under both Australian and New Zealand trade mark legislation (see section 120 of the Trade Marks Act 1995 (Cth) and section 89 of the Trade Marks Act 2002 (New Zealand)), to infringe a registered mark, a person must use the sign (in this case the word ‘hobbit’) as a trade mark. Dr Alloway may have been able to argue that his use of the word ‘hobbit’ was merely descriptive, and that the lecture title was therefore not infringing the Saul Zaentz Company’s trade mark. The more descriptive the registered trade mark, the more likely a defence of this kind may be available.

It appears that the Saul Zaentz Company is actively enforcing its trade mark to prevent the word ‘hobbit’ from becoming generic. Genericide is the process by which a trade mark which was originally distinctive becomes the colloquial or generic description for, or synonymous with, a particular category of goods and services. If a trade mark becomes known as the generic name for goods or services, it will cease to be recognized as a trade mark. Many well-known trade marks have passed into common language, such as Thermos and Escalator.

To maintain the distinctiveness of a trade mark, brands should:

  • ensure ownership and registration notices are used where appropriate (E.G. ™ or ®);
  • develop a style manual which sets out how the trade mark should be used;
  • develop a detailed strategy for use of the mark and a proactive approach to enforcing such use;
  • maintain control over all third party licences and provide detailed obligations regarding use of the mark under licence; and
  • monitor and act against all unauthorized use.

It may be difficult for the Saul Zaentz Company to protect its rights in the word ‘hobbit’ in the long term, as the word ‘hobbit’ is already part of our English speaking vocabulary, being defined in the Oxford English Dictionary as ‘a member of an imaginary race similar to humans, of small size and with hairy feet, in stories by J. R. R. Tolkien’, and is frequently used in the written press and in scientific literature to describe Homo floresiensis.

Pinterest Boards filled with Copyright Holes

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Are you considering using Pinterest as part of your company’s social media strategy?

Does your Pinterest board pin someone else’s photographs?

If so, you are probably interested to know the potential dangers and liabilities of using the site.

The person who takes a photograph usually becomes the owner and has copyright over that photo. A person who publishes or reproduces the work and communicates it to the public without permission infringes the copyright. So arguably (there have been no cases on this issue so far) if you’re taking someone else’s images and putting them up on your board, you’re infringing their copyright!

So what if your company is only posting pictures that belong to them – are you liability free?

Potentially not. On 6 April 2012 Pinterest updated its Terms of Service. These stated that Pinterest may be used for “personal, non-commercial use” and its Acceptable Use Policy includes a list of prohibited activities, including using “the Service for any commercial purpose or the benefit of any third party…” Yet despite this, Pinterest’s Terms of Service allows a person to open an account on behalf of a company and moreover it does not appear to be shutting down branded commercial pages already existing on the site.

So step carefully and keep an eye out for developments that no doubt Pinterest will make on its Terms of Service!

DAMAGES AWARDED FOR GROUNDLESS THREATS OF COPYRIGHT INFRINGEMENT

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The Federal Court of Australia has awarded Aboriginal activist artist, Richard Bell, damages of $147,000 against New York filmmaker Tanya Steele. This decision marks the first time that damages have been awarded where a third party had content removed from the internet without justification.Screenshot Richard Bell

Background

Richard Bell paid Tanya Steele to assist him in making the film “The Blackfella’s Guide to New York” in 2010 while he was an artist in residence in New York City.

A film trailer for the film was provided by Richard Bell to Milani Gallery in Brisbane. Josh Milani of Milani Gallery posted the video online using the file sharing service Vimeo.

Tanya Steele claimed copyright in the video and demanded that the Vimeo website remove the trailer, claiming copyright infringement. This was done.

In response to Tanya Steele’s threats, Josh Milani did not display the footage on the Internet, postponed a showing of Richard Bell’s artworks, and delayed the sale of a catalogue of Richard Bell’s artworks that included a still from the trailer.

Richard Bell sued Tanya Steele in Australia, claiming that he owned copyright in the film and seeking damages for the losses he suffered due to Tanya Steele’s threats including losses due to the lost opportunity to promote and sell his artworks at an opportunistic time and a loss of artistic credibility and integrity.

Decision

The Federal Court said:

            “It is clear the client made groundless threats against both the applicant and his agent, Mr Milani”,

and that it was appropriate to make orders for damages in the amount sought by the applicant.

Orders were made declaring Richard Bell the owner of the copyright in the footage and declaring Tanya Steele’s threats unjustifiable pursuant to section 202(1) of the Copyright Act.

Richard Bell was awarded $147,000 in damages for the lost sales of paintings and catalogues that he suffered as a result of Tanya Steele’s threats.  He was also awarded lump sum costs totaling $22,224 against Tanya Steele.

Impact of Decision

This decision makes clear the importance of ensuring that any claims of copyright infringement are correct and justifiable.

If you request that a file sharing or social media site take down an image or video on the grounds of copyright infringement, make sure that you are the owner of the copyright and have proof of your ownership, otherwise it could be actionable.