Telecommunications, Media And Technology (TMT) Law Update ' Volume 42

• Published date: 24 September 2021
• Law Firm: Davies Collison Cave
• Author: Mr Gordon Hughes and Darci Bucheli

JUDGMENTS

Business purchaser did not have ongoing implied software licence

On 8 June 2021, the Federal Court considered the factors to be taken into account when determining the existence of an implied software licence: QAD Inc v Shepparton Partners Collective Operations Pty Ltd [2021] FCA 615. The proceedings related to an alleged infringement of copyright by the purchaser, based on its continued use of software licensed by the plaintiff to the vendor. The licence agreement between the plaintiff and the vendor required the plaintiff's consent to an assignment, and the plaintiff subsequently stipulated a transfer fee as a condition of assignment. The purchaser declined to pay the transfer fee but contended it had an implied licence to continue using the software, essentially on the basis that the plaintiff had not objected to the ongoing use of the software during the course of negotiations. Thawley J concluded that an implied licence existed during the period of negotiations between the parties regarding the transfer fee, but once those negotiations lapsed, the implied licence came to an end. It followed that the purchaser infringed the plaintiff's copyright through its continued use of the software. Compensatory damages of $662,408.80 were awarded, being the amount of the transfer fee plus a year's maintenance fee, together with exemplary damages under section 115(4) of the Copyright Act 1968 for the purchaser's "flagrant breach". In the latter regard, the court noted that the software had been essential to the ongoing functioning of the business, but this was no excuse: "The fact that, commercially, [the purchaser] had little choice other than to use the software does not make the infringement less flagrant; rather it explains the reasons why the infringement was so flagrant".

Information Commissioner determines that Uber breached APPs

On 30 June 2021, the Information Commissioner made a determination under section 52(1A) of the Privacy Act 1988 that Uber Technologies Inc. and Uber B.V. interfered with the privacy of approximately 1.2 million individuals in Australia by failing to adequately protect the personal data of customers and drivers which was accessed in a cyber-attack in October and November 2016. The attack was directed at data stored in Amazon Web Service's Simple Storage Service. Specifically, Uber was found to have breached Australian Privacy Principle (APP) 11.1 by failing to take reasonable steps to protect personal information against unauthorised access, and APP 11.2 by failing to take reasonable steps to delete or de-identify personal information which was no longer needed for a permitted purpose. Related to these breaches, the Information Commissioner further determined that Uber had breached APP 1.2 by failing to take reasonable steps to implement practices, procedures and systems relating to its functions and activities that would ensure that they complied with the APPs. In making these findings, the Information Commissioner rejected Uber's submission that it did not, for the purposes of section 5B of the Act, "carry on business in Australia" due to the absence of any direct contractual or other relationship with riders or drivers in Australia, with the Information Commissioner observing that "the fact that an activity which occurs in Australia might be controlled or facilitated by actions of the entity taken remotely and without the need for employees in Australia, does not necessarily mean that no relevant activity is performed by the entity in Australia".

Federal Court overrides exclusive jurisdiction clause in Apple case

On 9 July 2021, the Full Court of the Federal Court allowed an appeal by Epic Games against a temporary stay of proceedings granted to Apple Inc in a dispute over an Apple Developer License Agreement: Epic Games, Inc v Apple Inc [2021] FCAFC 122. In November 2020, Epic had commenced the proceedings in the Federal Court alleging that Apple's conduct in requiring developers to (a) distribute iOS apps to Australian users through Apple's Australian App Store, and (b) only use Apple's payment processing system for in-app purchases, contravened Pt IV of the Competition and Consumer Act (2010). As we have previously reported in an earlier TMT Update and analysed in a separate article on our website, Apple had sought a stay because the agreement provided that any dispute relating to it must be litigated in the Northern District of California, and in April 2021 Apple was granted a temporary (3 month) stay by the trial judge: Epic Games, Inc v Apple Inc (Stay Application) [2021] FCA 338. Epic asserted in its appeal that the primary judge erred in failing to give effect to "overriding" public policy considerations that militated against the granting of a stay, and in failing to find that there were strong reasons to permit the proceeding to continue in the Federal Court notwithstanding the existence of the exclusive jurisdiction clause. Relying on the principles espoused by the High Court in Akai Pty Ltd v People's Insurance Co Ltd (1996) 188 CLR 418, the Full Court concluded that the primary judge had erred in granting a stay because, amongst other things, enforcement of the exclusive jurisdiction clause would offend the public policy of the forum, observing that "if contraventions of Pt IV of the CCA are determined by foreign courts they will be determined through the prism of expert evidence about the content of Australian law . This process is not the same as ascertaining and applying the law directly . One of the difficulties and uncertainties involved in proving foreign law is the risk that important aspects of the foreign law will be lost in translation." The Court acknowledged that exclusive jurisdiction clauses are a significant feature of global commerce, but this was outweighed by public interest factors such as the forensic disadvantage of Epic litigating the matter before a foreign court, the fact that the conduct in question was undertaken in an Australian sub-market, and the fact that "the focus should not only be on the nature...