Credit Reporting Code

The national Privacy Commissioner has written to the Australian Retail Credit Association (ARCA) with a formal request for ARCA to develop a code of practice about credit reporting - a CR code - by 19 April 2013 and to apply to have that CR code registered under the amended Privacy Act 1988 (Cth).

The Commissioner's request is authorised under s 26P in Schedule 3 of the Privacy Amendment (Enhancing Privacy Protection) Act 2012 (Cth).

ARCA can seek an extension of the development period. It must ensure that it meets the requirements of s 26Q of the Act, including making a draft of the CR code publicly available, inviting the public to make submissions to ARCA on the draft within a specified period (of at least 28 days) and giving consideration to any submissions made within the specified period.

Under s 26N(1) of the Act a CR code is a written code of practice about credit reporting.  Section 26N(2) provides that the CR code must:

• set out how one or more of the provisions of Part IIIA of the Privacy Act are to be applied or complied with

• make provision for, or in relation to matters required or permitted by Part IIIA to be provided for by the registered CR code

• bind all credit reporting bodies

• specify the credit providers that are bound by the CR code, or a way of determining which credit providers are bound

• specify any other entities subject to Part IIIA that are bound by the CR code, or a way of determining which of those entities are bound. 

Under s 26N(3)  the CR code may also:

• impose additional requirements to those imposed by Part IIIA, so long as the additional requirements are not contrary to, or inconsistent with, that Part

• deal with the internal handling of complaints

• provide for the reporting to the Commissioner about complaints

• deal with any other relevant matters. 

Under s 26N(4) of the Privacy Act, a CR code may be expressed to apply differently in relation to:

• classes of entities that are subject to Part IIIA

• specified classes of credit information, credit reporting information or credit eligibility information

• specified classes of activities of entities that are subject to Part IIIA. 

Under s 26L of the Act, an entity bound by the registered CR code must not do an act, or engage in a practice, that breaches the code.

A breach of the registered code by an entity bound by that code will be an interference with privacy under s 13(2)(b) of the Act, which may be the subject of a complaint by an individual under s 36 of the Act or an ' own initiative' investigation by the Commissioner under s 40(2) of the Act.

Privacy Damages

A determination by the national Privacy Commissioner on damages regarding privacy.

In 'S' and Veda Advantage Information Services and Solutions Limited [2012] AICmr 33 the Commissioner has determined that Veda Advantage Information Services and Solutions Limited (Veda) - the credit referencing giant that boasts over 15 million records with credit data on 16.5 million credit active individuals and 4.4 million businesses -

interfered with the complainant's privacy by failing to take reasonable steps to ensure that the personal information contained in the complainant's credit information file was accurate, up to date, complete and not misleading, in breach of s 18G(a) of the Privacy Act 1988 (Cth). Veda also provided the complainant's credit report, which contained misleading information, to other entities in breach of s 18R(1) of the Privacy Act.

Veda has been ordered to

• apologise in writing to the complainant within four weeks
• amend the complainant's credit information files in compliance with s 18G(a) of the Privacy Act by removing duplicated enquiry listings on cross-referenced files that are similar (but not identical to the initial listing) where both resulted from the same credit application
• cease to provide the complainant's credit report to any entity, prior to the removal of the similar enquiry listings
• pay the complainant $2,000 for non-economic loss caused by the interferences with the complainant's privacy.

The Commissioner also recommends that Veda -

• develop revised training packages and user information guides for subscribers, which clearly address the issue of similar enquiry listings and how to interpret them
• engage an independent auditor to assess Veda's cross-referencing processes, both the multiple identity report (MIR) option and the non-MIR alternative, in compliance with s 18G(a) of the Privacy Act.
• develop revised training packages and user information guides for subscribers, which clearly address the issue of similar enquiry listings and how to interpret them.

In 2009 the complainant argued that Veda's practice of duplicating credit enquiries on the complainant's credit information files suggested to subscriber credit providers that she had submitted more credit applications to credit providers than she had.

The complainant considered that the credit enquiries were "unnecessarily repeated and incorrect" and that provision to Veda's subscribers of misleading information concerning her credit worthiness resulted in her being refused credit or losing the opportunity to obtain credit on more favourable terms. She claimed that Veda did not respond appropriately once it became aware that data may have been inaccurate and/or misleading. She sought a declaration by the Commissioner that she is entitled to compensation of $100,000-$150,000 for economic and non-economic losses. She also requested that her personal information be listed correctly and not in a misleading manner.

Compensation under the determination is consistent with that in ‘D' and Wentworthville Leagues Club [2011] AICmr 9, where the club was ordered to pay the complainant $7,500 for non-economic loss caused by the interference with the complainant's privacy (ie providing information to an ex-partner). That determination was released in December 2011; the complaint was made in November 2008.

Payola and the Code

Posts in this blog over the past year have featured expressions of disquiet about the lack of transparency in relationships between pharmaceutical companies (and more broadly service providers) and medical practitioners ... what in several op eds I've irreverently tagged pharma payola.

Medicines Australia, the nongovernment body responsible for a pharma industry Code of Conductthat is recognised by the Australian Competition & Consumer Commission (ACCC) under Australian trade practices law, has been slow to move towards appropriate transparency regarding service contracts and gifts, despite criticism from consumer advocates and health practitioners and the embarrassment of GSK over a US$3 billion settlement for misbehaviour in the US. In a submission to the ACCC and a meeting with the ACCC last month as part of that regulator's consideration of an updated version of the Code I commented that Medicines Australia appeared to be emulating St Augustine's stance on chastity - give me chastity (or transparency) o Lord, but not quite yet.

The ACCC yesterday announced that it given authorisation to Medicines Australia for edition 17 of the Code of Conduct.

The  Code sets the standards for the marketing and promotion of prescription pharmaceutical products in Australia, including appropriate advertising, the behaviour of medical representatives and relationships with healthcare professionals. All member companies of Medicines Australia must adhere to the Code. Membership of Medicines Australia is voluntary.

The 17th edition of the Code  incorporates amendments that are intended to:

•  increase transparency around the interactions between pharmaceutical companies and healthcare professionals, third parties and patients – including requiring member companies to report on the sponsorship of healthcare professionals to attend or speak at educational meetings, and on any payments made to healthcare professionals to act on advisory boards or to provide consultancy services; 
• increase the level of restriction on member companies regarding their interactions with healthcare professionals – including absolutely banning brand name reminders and the provision of prizes to healthcare professionals following competitions; and 
• increase clarity regarding the application of the Code – for example, by removing separate Explanatory Notes to the Code and including those notes in the body of the Code’s text. 

The ACCC drily notes that

A significant number of interested parties have identified areas where the Code could be further improved. These include: a proposal that pharmaceutical companies disclose on an individual level payments made to healthcare professionals (consistent with developments in the US); improving the accessibility of the complaints process; and providing the educational event reporting tables in a more accessible format (such as Microsoft Excel). 

It comments that

The ACCC accepts that the Code provides a framework for interactions between pharmaceutical companies and healthcare professionals and that the Code is likely to result in public benefits including protecting the general public from inappropriate advertising, setting consistent standards for medical and promotional material and providing for greater transparency around the relationships between pharmaceutical companies and healthcare professionals. However, the ACCC considers that it is important that the Code continue to reflect community expectations about the level of transparency of relationships between the pharmaceutical industry and healthcare professionals. In this regard, the ACCC raised the issue of disclosing payments to individual healthcare professionals in its consideration of edition 16 of the Code in 2009. 

Indeed, Medicines Australia  made it clear that the organisation should hasten slowly. Thanks to raised eyebrows at the ACCC (presumably reflecting, in part, submissions by consumer advocates) the 17th Edition of the Code is recognised for two years rather than the five years sought by Medicines Australia. The ACCC notes that Medicines Australia convened a' transparency working group' following the submissions. The group will "look into ways that payments at an individual level can be disclosed appropriately", eg so that people can see what money is being received by individual practitioners and practices. The group is to report by December 2013.

Refreshingly

While the ACCC is encouraged by this, it is concerned that, if the Code is not amended in a timely manner to reflect current community expectations, the public benefits resulting from the Code could be undermined. The ACCC notes that there is general agreement amongst stakeholders that the relationship between healthcare professionals and pharmaceutical companies is an important one and that the payment of fees and sponsorship in appropriate circumstances is legitimate. The ACCC does not consider that moving to individual disclosure would deter the provision of these benefits but instead considers it would assist to maintain community confidence in these transactions. The ACCC recognises the need for Medicines Australia to consult widely with stakeholders to ensure that the framework for individual disclosure can be implemented in a meaningful and workable way and that there are issues that need to be resolved to ensure its success. However the ACCC is conscious that the issue of individual disclosure is not new, noting that it was discussed in relation to the authorisation of edition 16 of the Code and that some of Medicines Australia’s members are already reporting on individual payments in the US. 

 The ACCC goes on to note that it

expects Medicines Australia to complete the work it has already commenced on increasing the level of transparency provided by the Code and to incorporate new provisions into the next edition of the Code that will facilitate greater disclosure around sponsorship and fees paid to individual doctors. The issue of transparency and the steps taken to implement it will be relevant to the ACCC’s assessment of any future application for authorisation of a new edition of the Code. The ACCC is of the view that remaining issues associated with a framework for individual disclosure can be substantially addressed in the next 12 to 18 months, with implementation of an amended Code by early 2015. This would enable Medicines Australia to commence public reporting in 2015.

VPC

The Victorian Attorney-General has announced "reforms to strengthen data security and the privacy and protection of personal information within the Victorian public sector".

The new Privacy and Data Protection Commissioner will be responsible for oversight of the current Victorian privacy and law enforcement data security regimes, as well as the implementation of a new Victorian Protective Security Policy Framework (VPSPF).

The VPSPF will involve a new classification and information security framework for information held by government departments and agencies.

 The new office of the Privacy & Data Protection Commissioner will "bring together the skills and resources of the Privacy Commissioner and the Commissioner for Law Enforcement Data Security", with the agency "having responsibility for oversight of the current privacy regime and Victoria Police law enforcement data security, and for implementing and monitoring compliance with the new VPSPF".

The Attorney-General indicates  that  an integrated, whole of government approach to data security, including protective security, is an essential part of strengthening the privacy and protection of personal information handled by and on behalf of the Victorian public sector.

No comment, of course, on concerns that one of the more engaged privacy bodies - a benchmark for the more torpid, indeed timid, OAIC - will lose momentum.

The  Attorney-General claims that -

"This new combined oversight role will be better able to respond the new and emerging challenges affecting information privacy and data protection, including those identified by the Victorian Auditor-General in his 2009 Report on Maintaining the Integrity and Confidentiality of Personal Information.

The Government committed prior to the 2010 election to strengthening the protection of citizens' private information from inappropriate collection or use by government, and this reform is part of delivering on that commitment.

The reform creates a more streamlined system that will have broader and more comprehensive oversight of the privacy and information security regime for the Victorian public sector.

At the same time, the Victorian Government is responding to trends worldwide towards more open access to information, which the Government has endorsed through its DataVic Access Policy.

These changes will supposedly "not alter any legal obligations under the Victorian privacy regime or under the law enforcement data security regime". Legislation to establish the new Privacy and Data Security Commissioner will be introduced into Parliament in 2013. Given the Government's discomfort regarding human rights legislation let's not hold our breath before reading the Bill.

Geolocation

The Australian Communications & Media Authority has released a 39 page report [PDF] titled Here, there and everywhere — Consumer behaviour and location services.

Overall it is a trite document and we might wonder why ACMA doesn't cooperate with the Office of the Information Commission in the production of more meaningful research and analysis.

ACMA indicates that

Location services are any service or application used on a communications device that identifies or makes use of that device’s geographic position. At their heart, location services do two things:

• locate a device (the target) and record the time of the location determination 

• return some information or initiate an activity whose nature and/or content depend at least in part on the location or series of location information. ...

Location services 'exhibit their potential in countless situations, which generally fall within the government, business and consumer domains'. The uses encompass emergency management and government applications, business solutions and consumer applications.

The report goes on to indicate that

ACMA’s consumer research identified that 37% of Australian adults had accessed a location service on a mobile phone in the six months prior to May 2012. Location services benefit consumers by providing products and services that are:

• immediate - provided when it is needed 

• contextual - provided where it is needed 

• relevant - tailored to meet the needs of the individual.

The most commonly used location services were informational services. The consumer research identified that 35% of Australian adults had used a mobile phone to get directions, recommendations or other information related to their current location.

Common technologies involved in the provision of location services include:

Global Positioning System (GPS)

triangulation provided by mobile phone networks

location provided by consumer Wi-Fi devices.

All three methods are implemented in modern mobile devices to give the most accurate location possible in a timely manner. In addition, some services - such as social networking - use registration at a known location by the user.

Location information is collected when a location service is used. Other personal information may also be collected, either for the purposes of the service delivery or for the service provider’s use. The consumer research identified that consumers had a clear desire to be informed about how location services function and how to protect their personal information when using them. It also identified a deficit among participants of the skills and knowledge to manage personal and location information. This supports previous ACMA research that found that one in five adult Australians reported not being very confident, or not at all confident, in their ability to manage security and personal information online. Understanding the types of information that may be collected is important to growing consumer trust and engagement with location services.

Location service providers fall into at least one of three categories: network, device and third party. The majority of location services are free, or do not incur a separate charge to the consumer over and above the cost of the bandwidth used to provide the service. Revenue for location services is obtained through a variety of means, the majority of which capitalise on the other personal information that is collected from users when accessing the service; for example, targeted advertising.

For many users involved in the ACMA’s community research, the collection, storage and sharing of their personal information raised concerns.

Some people have concerns regarding data protection? Who'da thunkit!

ACMA concludes - more outstanding analysis - that

1. Greater use does not equate to a greater understanding

While consumers have been quick to embrace location services, greater frequency of use does not translate to a commensurate increase in awareness of—what information and personal data is collected and shared, how it is shared, where the data is sent, stored and compiled, and who controls the data. The majority of consumers understand the basics about the location information being collected, but there is a general lack of awareness about the sharing of this information and pathways by which personal data may be shared when using such services. As a result, many consumers lack the ability to choose appropriate protection options.

2. Risks are poorly understood and steps to protect may not be taken

Despite using location services on a frequent basis, many consumers had limited understanding of possible risks. More than two-thirds had concerns about the level of information they share when using location services. The sale and ownership of information and risk associated with disclosure were key concerns for the majority of users, with 71 per cent concerned with information being sold to a third party and 58 per cent concerned about the lack of details on where the data goes and who owns it.

While participants in the ACMA’s research reflected many different expressions of the types of risks involved in the use of location services, several common risks emerged:

• marketing - a risk of receiving unsolicited marketing material 

• personal - risk to self or property 

• financial - risk of loss 

• identity - risk of having identity stolen 

• emotional - emotional or relationship harm 

• disclosure - risk of data theft or sale.

When considering protective measures to manage these risks, knowledge of simple actions such as turning off location services when not in use was limited. Consumers did not regard information contained in terms and conditions either as an effective mechanism for informing themselves because they either ignored them or adopted a ‘tick and flick’ approach in their haste to access the service or application. This is highlighting the need for further work, particularly focused on the design of mechanisms that would allow consumers to become better informed about the terms and operation of their service.

3. Consumers want information to help them protect personal data

Most consumers (88%) felt there was a need for information to assist them in protecting their personal information when accessing location services. More than two-thirds of users (67%) felt they should be informed if a location service was collecting information about them, including location information, phone number, personal details or other personal information.

Generally, consumers expected information and advice about how to protect personal information. The majority of users (51%) regarded their service provider as being responsible for providing this information. When it came to protecting personal information, consumers regarded this as a matter of shared responsibility between the individual, the service or application provider and the government. Insights from other international regulatory approaches to location services has identified a common suite of consumer and citizen concerns with a particular focus on personal data protection, security and privacy. In addressing these concerns, other jurisdictions have adopted a range of approaches that can be characterised by:

• service specific legislative responses

• layered regulatory models 

• multi-faceted sectoral approaches.

 ACMA concludes that

Location services are typical of the fast-moving technological changes that have been affecting the communications industry globally. The impact of these services on current legislative frameworks has been universally challenging regardless of the type of framework in place. Globally, the issues of consent, privacy and digital information management that location services typify are raising concerns for governments, industry and consumers. Approaches to addressing these concerns are still being tested in a variety of regulatory regimes.

For the ACMA, the international experience of regulating location services demonstrates that the issues its community research identified for Australian users correlate with those in the wider digital environment.

Names and Quackery

The NSW Minister for Fair Trading has confirmed that the Australian Vaccination Network (AVN) - the voluble but in my opinion disingenuous entity noted for its very problematical opposition to vaccination - has been ordered to change its name on the grounds it is misleading the public. The order is under Section 11 of the Associations Incorporation Act 2009 (NSW), which authorises the state's Commissioner for Fair Trading to direct an association to adopt a new name if the existing name is unacceptable.

In Australian Vaccination Network Inc v Health Care Complaints Commission [2012] NSWSC 110 earlier this year the AVN illustrated deficiencies in the legislation regarding the Health Care Complaints Commission (HCCC).

The Minister indicated that

NSW Fair Trading has received complaints that the Australian Vaccination Network’s name is confusing and has misled the public as to its operational intention.

The Commissioner for Fair Trading, Rod Stowe, has therefore written to the Australian Vaccination Network, directing the association to change its name.

The Australian Vaccination Network does not present a balanced case for vaccination, does not present medical evidence to back-up its claims and therefore poses a serious risk of misleading the community.

The Australian Vaccination Network can therefore find a new name that is more appropriate given its anti-vaccination stance.

We are asking the Australian Vaccination Network to be honest and upfront about what they stand for and to choose a new name reflecting their beliefs.

The AVN is required to lodge an application for registration of a new name by 21 February 2013. If an application for registration of a change of name is not made on or before that date its registration may be cancelled.

Action by the Government reflects criticism by consumer advocates, health specialists and parents about potential confusion or deception.

The AVN is reported as claiming that the action is an attack on free speech by a bullying government and associated interests such as the medical profession.

Those interests have of course freed most of the world from scourges such as smallpox and polio, so the problematical rhetoric from the AVN shouldn't be taken at face value. The Friends of Science in Medicine notes that 1 in 12 babies in Australia are not fully immunised. AVN enthusiasts expose babies to potentially serious injury: those minors and their parents do not have a choice.

The Australian Academy of Science has meanwhile released a cogent and resolutely fact-based guide - The Science of Immunisation: questions and answers - that

aims to address confusion created by contradictory information in the public domain. It sets out to explain the current situation in immunisation science, including where there is consensus in the scientific community and where uncertainties exist.

The document is structured around six questions:

1. What is immunisation?

2. What is in a vaccine?

3. Who benefits from vaccines?

4. Are vaccines safe?

5. How are vaccines shown to be safe?

6. What does the future hold for vaccination? 

It was prepared by an AAS Working Group of eight members (co-chaired by Professors Tony Basten AO FAA FTSE and Ian Frazer AC FAA FRS FTSE) and reviewed by an Oversight Committee chaired by Sir Gus Nossal AO CBE FAA FRS FTSE.

In the UK the Institute of Economic Affairs (IEA) blog proposes radical changes to the health and legal systems, with Richard Wellings on 23 January stating 

 A selection of regulatory changes is suggested below: 

 

Perhaps most importantly, the compulsory licensing of medical professionals should be abolished. Anyone should be at liberty to practice as a doctor or nurse, with patients relying on brand names or competing voluntary associations to ensure quality. Ending current restrictive practices is essential to enable private firms to increase productivity in the sector. 

 

Restrictions on the types of treatment available ‘over the counter’ should be lifted to enable patients to obtain medication without recourse to registered doctors and regulated pharmacies. 

 

Burdensome drug licensing regulations should be rescinded. Instead, the testing of new drugs should be left to private firms and free markets. Reputable companies would have strong economic incentives to ensure the safety of their products, while there would also be far more freedom for experimentation and innovation by new market entrants, with huge potential benefits for patients. 

 

Prohibited recreational drugs, such as cannabis and opiates, should be legalised to allow the sick to benefit from their numerous medical applications. 

 

Private firms should be free to bring in low-cost medical professionals from abroad and at liberty to determine rates of pay and working conditions through private contract. 

 

Legal reforms could enable patients to waive their right to clinical negligence claims.

SNS

'Whose Social Network Account? A Trade Secret Solution to Allocating Rights' by Zoe Argento in Michigan Telecommunications and Technology Law Review (forthcoming) asks

Who has the superior right to a social network account? This is the question at issue in the growing number of disputes between employers and workers over social network accounts. The problem has no clear legal precedent. Although the disputes implicate rights under trademark, copyright and privacy law, these legal paradigms fail to address the core issue. At base, disputes over social network accounts are disputes over the right to access the account’s followers – the people, sometimes numbering in the tens of thousands, who follow an account. This article evaluates the problem from the perspective of the public interest in social network use, particularly in use that blurs professional and personal roles. The article argues that the public interest is best served by resolving these disputes under a trade secret approach.

Argento comments that

Imagine that you work for a law firm, focusing on a discrete practice area, say music law. One of your many nonbillable responsibilities is to contribute to an industry newsletter. However, the law is changing so rapidly in your area that your articles are typically out of date the moment they are published. One day, you decide that your time would be better spent opening a Twitter account and simply tweeting the latest developments.  You open an account and start tweeting. In the casual spirit of Twitter, you write tweets that are not only informative, but also entertaining for both your clients and yourself. You make wry comments about judicial opinions and the antics of the out-size personalities in the industry. You also write a little about your personal life, in part simply because you use the same account to keep in touch with friends and family. Within a few months, several thousand people in your industry have become followers of your Twitter stream. You and your law firm are delighted. The firm even adds a link to your account on the firm web page.

A few years later, you leave your employer to go to a different firm. To your surprise, a week after you leave, your old firm demands that you return ‘their’ Twitter account. What to do? Who ‘owns’ the account?

This is, of course, not a problem unique to law firms. In many industries, workers maintain popular social network accounts followed by thousands, even millions, of people. How do we figure out when the account ‘belongs’ to the employer and when it ‘belongs’ to the worker? Who gets the account when the parties part ways? This question has recently arisen in a spate of cases. In PhoneDog v. Kravitz, a company that provides cell phone reviews sued a reviewer for taking his Twitter account with him after he left the job. In Eagle v. Morgan a former employee sued a financial service company for changing the password on her LinkedIn account and transferring it to another employee the day she was fired. In Christou v. Beatport, LLC a night-club owner sued a former employee for using the password to the plaintiff’s MySpace pages to advertise his new club.

The cases have aroused intense interest. Approximately one billion people participate in social network sites. In addition, more than 70% of companies maintain a social network site presence, and the number is rapidly increasing. Cumulatively, employers and individuals have enormous investments in social network sites at stake. The precedents set will affect not only these investments but the public interest in preserving the immense benefits of social network use.

These disputes are likely the harbingers of many more to come for two principal reasons. First, social network accounts can become quite valuable. A social network account may provide the means to transmit a message to thousands of people. In the PhoneDog case, for example, 17,000 people followed the Twitter account at issue. However, a social network account provides much more than a means to make a one-way broadcast. A popular social network account offers access to an engaged audience, a means to crowd-source ideas and feedback, a self-reinforcing community of people connected by their shared interests, and, finally, a way to reach into the network of each person linked to the account. Take Lady Gaga’s Facebook page, for example. The pop star has 50 million Facebook users linked to her account. She uses her Facebook page to promote her music, products, and charities by sending messages which appear automatically in the newsfeeds of her followers. Meanwhile, her followers can both respond to Lady Gaga and communicate with each other by posting on her web page, giving Lady Gaga direct feedback and strengthening her community of fans, the so-called “little monsters.” Moreover, each fan may pass on Lady Gaga’s comments and other postings to their friends. As a result, Lady Gaga’s messages are distributed to an even larger circle than the 50 million Facebook users linked to her account. Unsurprisingly, not only individuals, but a broad range of organizations, have created social network accounts to take advantage of these opportunities.

Second, the blurring of personal and professional roles on social network sites leads to confusion over who owns the value in the account – for several reasons. Because the account is in some ways a proxy for a person, people tend to use one account on a given platform to represent themselves for all purposes, including both personal and professional types of use. And because users participating in social network sites expect interaction with people, organizations have found that using real people to ‘converse’ on their behalf in a personal manner leads to success on social network sites. Therefore, the features that make social network sites effective as a means of communication lead to competing claims to an account. Individuals tend to blur personal and professional use at the same time that employers ask their workers to represent them in a personal manner. Where there is no express agreement on the issue, the question of who has the superior right to the account becomes blurry indeed.

This is a new area with no clear legal framework. The problem of legal framing is this: a social network account can be shorn of all content that gives rise to clear legal rights. The name of the account may be changed to avoid a trademark claim. Copyrighted and private content can be deleted. The account may be reduced to a node to which other people have linked their accounts. No clear legal rights inhere in the links to the account, yet, by providing automatic access to an audience, the links are what give the account itself value. This article argues that trade secret law provides the best legal framework for resolving these disputes. The secret of access to the social network account – the password – should be protectable as a trade secret. As required for trade secret protection, the password to the account is generally secret. And its secrecy confers independent economic value by giving the account holder exclusive access to the links in the account. This trade secret protection would be highly limited. It would protect only access to the account, but not to any content otherwise available to the public. Crucially, any other user could still contact the account’s followers through other accounts. Although narrow, trade secret protection would make possible assertion of a right to the interest at the heart of these disputes – the value in retaining exclusive access to followers through the links collected in an account.

Similar trade secret claims have survived motions to dismiss in two of the cases on the issue. This article expands on the cursory reasoning in these cases and argues that protecting the secret of account access as a trade secret best balances the interests at stake in these disputes. The investment of time and effort to build up links to a social network account appears to yield significant social benefits in the form of improved dissemination of information, economic efficiency, and labor mobility. The blurring of professional and personal roles while building up the links to the account only appears to add to these benefits. Trade secret law preserves incentives to invest in the account and create these benefits by protecting access to the account from misappropriation. Further, the hired to invent doctrine would allocate rights in social network accounts between employers and workers at the moment of creation in a manner that not only maximizes incentives to invest in social networking, but also preserves workers’ incentives to invest in themselves. As a result, the trade secret law approach promotes the public interest in social network site use without unduly hampering workers. Moreover, this approach would, except for a few rare cases, work in concert with the resolution of other legal interests, such as privacy, copyright, and trademark, that are implicated in these disputes.

This article proceeds as follows: Part II describes in detail why and in what circumstances disputes over social network accounts arise. In Part III, the article analyzes the legal rights and interests at stake in disputes over social network accounts. These disputes implicate legal rights under trademark, personality rights, copyright, and privacy law. The paper argues, however, that the core issue does not fall under any of these legal paradigms and instead implicates the public interest in developing links to the social network account. Part IV shows that trade secret law not only provides a mechanism to assert a right in the core value of the account, but provides the best framework to resolve the interests at stake in disputes over social network accounts.

Argento goes on to argue that

The trade secret approach applies in a straightforward fashion to optimize the incentives of the employer and worker to invest in social networking. First, the party that does the work of creating the account should, by default, have the rights to the account. Creating the account should not be defined as merely the trivial work of opening the account, however, but as the substantial investment of time and energy needed to develop the links in the account. The links to the  account are an integral part of the account, the aspect of the account which makes the account itself valuable.

Second, where the parties have agreed, even impliedly, that the worker created the account in exchange for his salary or other compensation from the employer, the employer should have the right to the account. Again, allocating rights based on contract principles optimizes incentives to invest in social network accounts. In a free market, the worker bargains for the highest compensation for his labor in developing a following for the social network account. The employer bargains for access to the account at the lowest cost. And the public benefits from the creation of the account at low cost.

Trade secret law recognizes two competing policy concerns in employer-worker disputes over rights to material developed during the course of employment. On the one hand, allowing the parties the freedom to bargain enables each to optimize their benefits through contract. On the other hand, granting the employer rights in a worker’s skills and information harms the worker by decreasing his ability to earn a livelihood. The public interest in open competition in turn suffers when workers are prevented from competing with former employers.  Granting the employer a right to such skills and information, either by contract or through trade secret protection, discourages an employee from leaving because she cannot make a living outside the company. As a result, employers do not compete for the best employees, either to retain or hire them.  The worker then has no incentive to improve her skills because she will not be compensated for her investment in herself through competition among employers for the rewards of her enhanced skill. A number of undesirable consequences result, especially decreases in innovation, worker mobility and economic growth.

Trade secret law attempts to resolve this tension by carving out the skills, experience and knowledge necessary to a worker to make a living in her chosen profession from trade secret protection and from non-compete agreements. Therefore, trade secret law does not give the employer a right to a worker’s skill or knowledge, even skill or knowledge acquired during the employment as the company’s trade secret.  Neither may the employer contractually restrict a departing worker from using his skills or knowledge to the extent that the agreement unreasonably restricts the worker’s ability to make a living. Indeed, a growing chorus of commentators argues that all types of non-compete agreements harm the public interest and should not be enforced. The same concerns arise in the context of rights to social network accounts. Workers use their social network accounts to develop skills and knowledge and to build a network which enables them to continue developing skills and knowledge. A worker might, for example, use her social network account to hone her communication skills and to build a personal brand, to learn about news and opportunities specific to her industry, and to build a personal and professional network. Allowing the employer to prevent a worker from using her skills and knowledge when she leaves her employer without compensation  would decrease the worker’s incentive to invest in himself through social network sites. Nevertheless, a distinction can be made between the social network account and the worker’s collective abilities. The account is only the consequence of a worker’s skill and experience in her chosen field not the worker’s skill or experience itself. With regard to the worker’s network, the social network account is likewise only a virtual representation of links to people rather than the network itself. Therefore, a worker’s agreement to transfer rights in the social network account to the employer would not necessarily harm the worker’s interest or the public interest. Where the worker freely bargains away the social network account in exchange for its market value, the worker will have received optimal compensation for his labor and skill. Such an agreement does not prevent the worker from making a living in his chosen profession. He may still use his expertise. Moreover, his personal brand is still his because he retains the right to his identity. Thus, the worker could enjoin the employer from continuing to use his name or even a username associated with him without his permission based on a trademark, right of publicity or misappropriation of identity theory. The worker can open new accounts to recreate the electronic links with his network and, to the extent his former followers followed him personally, they might be persuaded to follow him again. Of course, recreating the links to former followers would take an investment of time and effort. But in a fair bargain, the employer will have compensated him for the work required to recreate the electronic links to his network.

Nevertheless, the employer should bear a heavy burden to prove that the worker in fact agreed not only to ensure that both parties had a true opportunity to bargain for the best deal, but also to avoid the harms caused by decreasing the worker’s incentive to invest in his own skills and knowledge. A worker may make less effort to build a social network online and to develop a personal brand if she believes that her employer may take away her social network account without compensation. As a result, she may forego opportunities to learn more about her industry, to hone her communication skills, to meet other professionals, and, in general, to improve her expertise and knowledge. As in the trade secret context, the challenge in applying this analysis is determining the nature of the agreement. The distinctions are subtle. The fact that the worker used the trade secret – here, access to a social network account – on the employer’s behalf does not end the analysis.  The parties must agree not  only that the worker will use the trade secret on the employer’s behalf, but that the employer will obtain the rights to the trade secret. Thus, in the context of social network sites, the fact that a worker agreed to use his social network account to benefit the employer – for example, by linking to the employer’s web site in the PhoneDog case – does not necessarily imply that the parties agreed that the account itself belongs to the employer. As in the trade secret context, a court must carefully scrutinize the circumstances and the objective manifestations of each party to determine the nature of the agreement. 

The inquiry and factors used in trade secret cases provide useful tools for analyzing the facts in a given case. The first challenge in analyzing the terms of any implied agreement between employer and worker is to determine the nature of the employer’s offer. The relatively easy case is one in which the employer gives specific instructions to create social network accounts for the employer’s use. Where the employer gives the worker more general instructions, a court might look to the factors outlined above – custom, relation to the employer’s business, and the employer’s dedication of resources to the task – to determine whether the employer made clear its expectation that the worker create a social network account for the employer in exchange for compensation.

Regarding custom, the fact that workers at a particular employer routinely gave the employer access to their accounts upon leaving would be indicative of the parties’ understanding. Another circumstance indicating agreement would be the employer’s dedication of resources to help workers develop social network accounts, such as guidance, training and evaluation. The nature of the content in the account also indicates the purpose for which the account is created and developed. Courts, however, should be cautious in drawing conclusions solely based on the account’s content. Again, the professional and the personal blur on social network sites. An individual may post professional content for personal reasons, such as to build skills and a professional network. Conversely, an individual may post personal content on behalf of the employer: for example, to attract an audience for the employer’s  website. A court should not conclude that a worker created an account on behalf of the employer solely because the worker posted content related to his profession.

To determine whether the worker agreed to the employer’s implied offer, the court must evaluate the objective manifestations of the worker.  The worker’s agreement might be manifested through his words. For example, in Morris v. Scenera Research, the court construed the worker’s reference to himself as the “chief inventor” and his statement that his employment goal was to develop new inventions as indicating that the worker understood that his inventions would belong to the employer. Similarly, in the social network context, a worker’s reference to herself as “social networking director” and a statement that her goal is to develop a social network account for her employer might indicate an understanding that the worker had built the social network account for her employer to keep. In a case where the employer made the terms quite clear, the employee’s agreement might simply be gleaned from her decision to stay at the job and perform by creating the social network account.

A number of other factors specific to the social network account context would help to determine the intentions of the parties: the name of the account, exclusivity of access, the type of account, and whether the account pre-exists the employment relationship. First, the name of the account provides an important clue. Where the account is named after the employer, for example, the name suggests that the parties intended that the employer would have a right to the account. Similarly, an account named after the worker suggests that the parties understood that the worker would retain the exclusive right of access to the account. Of course, the harder cases are those like the PhoneDog case where the name of the account combined both the name of the employer and the worker, like “@PhoneDog_Noah.366

With regard to the exclusivity of access, the fact that several workers had access to and worked on one account would suggest that the parties did not contemplate that any one worker had an exclusive right to the account. Conversely, the fact that only one worker ever accessed the account would be evidence in support of that worker’s exclusive right to the account. The type of account might also indicate the parties’ intentions. For example, on Facebook, a user’s “personal timeline” must only represent individuals, at least according to Facebook’s instructions. However, “Facebook Pages” may represent an organization, business, or celebrity. The fact that a worker chose to create a “personal timeline” on Facebook as opposed to a “Facebook Page,” or some other form of social network account, might indicate that the parties intended that the account would belong to the worker. Finally, the fact that an account pre-exists the employment relationship obviates the need to analyze ownership under the work-made-for-hire doctrine. The worker was clearly not hired to invent if she created the account before she was hired.

In short, these factors might help ascertain the parties’ intentions. However, in each case, a court would have to carefully evaluate all the circumstances to determine the nature of the parties’ “tacit understanding.”

To conclude, trade secret law offers a flexible and appropriate set of rules for allocating the right of exclusive access to a social network account between employers and workers. Trade secret law not only provides the best framework for optimizing incentives to create valuable information and invest in workers, the trade secret analysis can be applied directly to disputes over social network accounts to achieve the right outcome.

Trade Secrets in Conjunction with Other Legal Concerns

Trade secret analysis will also lead to a just outcome for legal claims arising under other legal paradigms. In many cases, the question of access to the account can be separated from the issue of legal rights in the content of the account. The outcome of the trade secret analysis in these cases will have no bearing on the outcome of other legal claims. Where access to the account implicates other rights, however, the trade secret resolution to the access question will generally not conflict with the resolution of other legal claims related to the account.

1. Trademark and Personality Rights

In general, trademark and personality rights claims may be resolved independently from the issue of access to the account.371 Where trademarks or signifiers of identity are used confusingly in an account, they may often be deleted or changed.372 If the trademark holder has lingering concerns about confusion, a court might require the account holder to post disclaimers disavowing any connection to the trademark’s owner.

That is not to say that the issue of rights in an account and the issue of rights in the name of the account have no relation to each other. As described in part IV.B.2, the name of the account should be a factor in the hired to invent analysis. For example, when a Coca Cola employee creates a Facebook page named “Coca Cola,” the name strongly suggests that the parties agreed that the page would belong to Coca Cola. In most cases, as a result, the trade secret approach would award access to the account to the party that owned the rights to the trademark or persona in the name of the account.

2. Privacy and Trade Secrets

To the extent that an account contains trade secrets in addition to the password, the analysis regarding the rights to those trade secrets would parallel the analysis regarding the right to access the account. Thus, whichever party had the right to the account would, in most cases, also have the right to trade secrets in the account. If the outcomes conflicted, a court might simply order the party that loses the account to delete the secret information before turning over the password. Privacy concerns can be resolved similarly. 

Moreover, like trademarks and personality rights, the existence of private information may help to resolve the hired to invent question by indicating the expectations of the parties. The fact that a worker posted highly private information in the account may indicate that the worker did not foresee and therefore did not agree to turn the account over to the employer. Similarly, the trade secret analysis may help to resolve the privacy question. Where the parties clearly agreed that the employer would take the account, a court might reasonably conclude that the worker did not consider the information in the account to be private.

The expectations of the followers linked to the account raise a more difficult privacy problem. Where the account is only visible to a small circle, such as friends and family, followers of that account might reasonably expect that information sent to that account or visible from that account would remain out of public view. Simply as a matter of public policy, social network users should be able to proceed with some confidence that their private information will not be turned over to others as accounts change hands.  Although the followers may not be party to a suit over rights to a social network account, the plaintiff in most cases will request that the court enjoin the defendant from using the account and, in considering whether to grant an injunction, the court must consider the public interest as a factor in the decision. This consideration of the public interest should include an analysis of the interests of the followers. On privacy grounds, a court should hesitate to turn over an account unless the followers should have reasonably expected that the employer would have access to the information.

However, the factors for determining the reasonable expectations of the followers will significantly overlap with the factors in determining whether the account belongs to the employer under a hired to invent analysis. Where the worker is clearly acting on behalf of the employer – for example, by naming the account at least in part after the employer, advertising the employer’s products, or frequently posting links to the employer’s website – a follower should reasonably expect that the employer would have access to anything that follower decided to share with the account. Thus, in the main, privacy concerns will not be in tension with the proposed trade secret resolution of disputes over rights to the account.

3. Copyright

Finally, the trade secret approach would be unlikely to conflict with concerns regarding the display of content under copyright law. With respect to copyright law, the analysis to determine which party has the rights to new copyrightable material in the account is quite similar and likely to lead to the same outcome as the analysis to determine which party has the right to the account itself. The rules regarding ownership of copyrightable works in the employment context closely parallel the rules in the trade secret context. As in trade secret, copyright vests in the creator of the work by default. In the trade secret context, this default rule is modified by the hired to invent doctrine, in which the employer obtains the rights to trade secrets that the employee was hired to create. Copyright law has a similar doctrine called work-made-for-hire. Where the copyrighted work is created as a work-made-for-hire during the course of employment, the rights vest in the employer.

The chief difference between the trade secret and copyright analysis is that, unlike the hired to invent doctrine, which is based in principles of contract law, the work-made-for-hire rule is based in principles of agency law. The copyright in a worker’s work belongs to the employer when the worker is an employee and the work is created in the scope of the employee’s employment. Both the question of whether a worker is an independent contractor and the question of whether the work was prepared in the scope of employment are determined in light of the common law of agency. Where the worker is an employee, the outcome of the analysis of work-made-for-hire is likely to be the same as the outcome of a hired to invent analysis because the inquiry in both is essentially whether the worker consented to do the work on behalf of the employer based on the objective manifestations of the parties.

The factors courts consider are quite similar in each analysis. Again, to determine whether a worker is hired to invent a trade secret, a court would consider whether the worker was directed to create specific information for the employer. In a situation without a specific instruction, the court consider factors such as how closely related the information was to the employer’s business, the amount of resources assigned to this task, and whether workers have assigned inventions to the employer in the past.  Similarly, a court seeking to determine whether a copyrightable work is a work-made-for-hire, would consider whether “(a) [the work] is of the kind [the servant] is employed to perform; (b) it occurs substantially within the authorized time and space limits; [and] (c) it is actuated, at least in part, by a purpose to serve the master.” As a result, the circumstances that would indicate that the worker had impliedly agreed to leave the social network account to the employer would also likely be circumstances suggesting that the copyrightable content in the account was a work-made-for-hire.

Even where the ownership of the copyright in the content and the ownership of the account differ, copyright law will most likely not be a barrier to resolving the right of access to the account under the trade secret law approach. For example, where the worker is an independent contractor, the copyright in any content she posted in a social network account would vest in her at creation, even if she had impliedly agreed that the account itself would belong to her employer. However, where the worker has agreed to give the right of access to the account to her employer, she would likely be considered to have given the employer an implied license to the content to the extent necessary to use the account. In the worst case, however, where the court determined that different  parties owned the rights to copyrighted material as opposed to rights to the account, the court could order that copyrighted material be deleted from the account. In short, copyright claims would likely not conflict with the trade secret approach to resolving access to the account.

Inevitably, there will be some hard cases where rights conflict – where one party clearly has rights to the social network account and the other has a right to copyrighted material therein, which cannot be deleted. Courts will struggle to balance the interests in these cases. Nevertheless, in most cases, the trade secret approach will offer the best approach to allocating rights in the account without conflict with other legal paradigms.

D. The Comparative Inferiority of a Personal Property Approach

A possible alternative to the trade secret approach is treating a social network account as a form of personal property. The plaintiff might claim a right of personal property in the account itself and make a claim for conversion. Indeed, in the cases thus far, the plaintiffs have done just that. The trade secret approach, however, is superior for two principal reasons. First, the hired to invent doctrine in trade secret law offers a robust common law framework to resolve the issue of allocation of rights ab initio which, in comparison, the law of personal property lacks. Second, the definition of a trade secret restricts trade secret protection to the interests at the heart of these disputes. In contrast, personal property does not have such strict definitional limitations. As a result, protecting social network accounts as personal property may result in over-protection, to the detriment of competition and the public interest.

Assuming a plaintiff can establish that she has a personal property right in a social network account, she would be likely to succeed in a conversion claim against someone who locked her out of the account. Conversion is an intentional exercise of dominion or control over personal property which “seriously interferes with the right of another to control it.” Where a defendant locks the plaintiff out of the account by changing the password, the defendant has “seriously  interfered” with the right of control. The plaintiff, in fact, loses all control. The harder question is whether the account should be considered a form of personal property.

A social network account possesses some of the characteristics of property. It is rivalrous: only one of the disputing parties may effectively use the links in the account to communicate with others at one time. The account is also excludable in the sense that access requires a password which can be safeguarded from others. Finally, the account resembles property in that it satisfies Locke’s justification for property rights. Under the Lockean labor theory of property, the account holder should have a property right in the fruits of her own labor.

In some cases, courts have found that similar items qualified as property and could be the subject of conversion. In Kremen v. Cohen, for example, the Ninth Circuit held that, under California law, an internet domain name was personal property for purposes of a conversion claim. And in Staton Holdings, Inc. v. First Data Corp., the Northern District of Texas found that, under Texas law, a telephone number could be subject to conversion as personal property. In general, the law appears to be moving in the direction of finding intangible items such as domain names and numbers to be personal property and subject to conversion.

Granting a personal property rights in the account does not necessarily conflict with the terms of use of the social network site. The property rights in the account might be defined quite narrowly, perhaps only as a right of use and exclusion subject to the rights of the social network site provider.

The conversion cause of action however stumbles in the employment context where the challenge is to determine which party has the right to the account at the moment of creation. It is, in a sense, previously un-owned. Personal property law rarely tackles the question of who gains the property right in previously unowned items. Except for a few odd cases involving things like foxes on public beaches, most issues of personal property ownership are resolved by tracing the chain of title back one link or so to the last instance of good title. Thus, in the employment context, even if the agreement between the parties is unclear, disputes over items of personal property created during the course of employment can typically be resolved by reference to the chain of title. For example, if a worker makes a shoe, the employer has a right to the shoe when the shoe was made from leather belonging to the employer.

The chain of title approach, however, does not resolve disputes over rights to an account. Both the account and the links in the account are created anew. They are previously non-existent and un-owned, subject to rights of the social network services.  Moreover, a right to possess the account does not flow clearly from the social network site provider to one party or the other. Although the terms of use create a contract with the user granting a limited right to use the account, it is not necessarily clear on whose behalf the user has contracted with the social network site provider.

In intellectual property law, however, new intellectual property is created all the time. As a result, intellectual property law has a robust set of rules for assigning rights in new intellectual property, especially in the employment context. This article has described in some detail the hired to invent and workmade- for-hire doctrines.

In the personal property context, the law of agency would likely govern disputes about title to items created during the course of employment. Because the law of agency governs when a worker’s actions affect the employer’s legal position, the law of agency would also govern when the worker’s actions vest legal property rights in the employer to a new account. However, because the problem is so rare, there is no robust common law tradition or legislation addressing the problem of rights to newly created personal property in the employment context. As a result, courts would have to create law which balances interests in optimizing incentives to create, promoting worker mobility and protecting the expectations of the parties out of whole-cloth. In contrast, trade secret law provides a ready framework for balancing the relevant policy concerns.

Furthermore, the dangers of conferring a new property right in social network accounts outweigh the advantages. As a general rule, property rights should only be granted when they promote the public good. In this case, where trade secret law provides a limited and effective form of protection, it is unnecessary to create a new personal property right to resolve the problem.

Worse, granting a personal property right may cause harm. Personal property rights would have to be very narrowly defined to avoid over-protecting the account. But properly delineating the extent of rights would be challenging for the courts or legislatures, especially since the technology and terminology is changing rapidly. A broadly defined personal property right in a social network account might propertize information, thereby circumventing intellectual property limitations, reducing the public domain, and diminishing the free flow of information. For example, a personal property right in the publicly available names of followers linked to a social network account might decrease competition by preventing others from collecting and using this information. In addition, a proliferation of rights might create an anti-commons in which the transactional costs of dealing with the rights of other participants discourages investment in social network sites.

Limiting the trade secret rights to a social network account poses considerably less challenge because trade secrets are already adequately limited by their definition. Again, trade secrets are limited, by definition, to information that derives independent economic value from being secret and that is subject to reasonable efforts to maintain its secrecy. In contrast, the definition of personal property is broad: “any movable or intangible thing that is subject to ownership and is not classified as real property.” Indeed, the definition of personal property is effectively a definition by default; property that is not real property.

Trade secrets, by definition, do not encompass information in the public domain. Trade secret protection would only provide protection for exclusive access to the account and only when the secret of access is kept secret and derives independent economic value from its secrecy. Damages would essentially only cover the loss of convenience that losing this secret access to the account would entail.

A trade secret approach would also limit frivolous litigation. If protection were not limited to accounts to which exclusive access conferred a competitive advantage, the putative owner could sue, for example, for purposes of harassing a former worker who had gone to a competitor, even if the account would provide no commercial advantage. Trade secret law would also require that the plaintiff take reasonable steps to keep the password secret. A broadly defined personal property might require no such self-help efforts.

The personal property approach has another flaw. Because many states do  not allow claims for conversion for intangible items, the law would not develop in a coherent manner. In contrast, trade secret law, including the hired to invent principles, are quite similar in every state.

For all these reasons, the better approach solution is to resolve the disputes using trade secrets law. 

Compulsory Licensing of Patents

Recommendations - some (eg 10.1) utterly unexciting -  'information requests' and findings from the Productivity Commission's 322 page draft report [PDF] on Compulsory Licensing of Patents, noted earlier this year.

Draft Finding 6.1

While the cost and timeliness of the compulsory licensing process could be a barrier for its use by some parties, there are no clear alternatives that would significantly reduce its cost without also reducing the quality of the outcomes and increasing the scope for appeals.

Draft Finding 6.2 

The Australian Government has agreed to introduce a general objects clause recommended by the Advisory Council on Intellectual Property into the Patents Act 1990 (Cth). This could assist in clarifying the context for compulsory licensing and the considerations that should guide a court.

Draft Recommendation 6.1

The Australian Government should seek to remove s. 133(2)(b) from the Patents Act 1990 (Cth), so that a compulsory licence order based on restrictive trade practices of the patent holder is only available under the Competition & Consumer Act 2010 (Cth). The remedy provisions in the Competition & Consumer Act should be amended to explicitly recognise compulsory licence orders to work a patented invention as a remedy under the Act. The new remedy provision should specify that an order must:

• not give the licensee or a person authorised by the licensee, the exclusive right to work the patented invention
• be assignable only in connection with an enterprise or goodwill in connection with which the licence is used.

The new provision should also contain a clause specifying the basis for determining remuneration, which is identical to the corresponding clause in the Patents Act.

Draft Finding 6.3

Section 51(3) of the Competition and Consumer Act 2010 (Cth) — which exempts certain types of conduct involving intellectual property from some provisions of the Act — is unlikely to promote efficient outcomes with respect to access to patented inventions. The Commission is mindful that s. 51(3) addresses a range of intellectual property issues, but in respect to access to patents, sees no reason why it should not be repealed.

Draft Finding 6.4

The current language in s. 135 of the Patents Act 1990 (Cth), which conflates the reasonable requirements of the public with the interests of Australian industry, is inconsistent with promoting community-wide welfare.

Draft Recommendation 6.2

The Australian Government should seek to replace the current ‘reasonable requirements of the public’ test with a new public interest test for compulsory licensing of patents. The new test should specify that a compulsory licence would be available if the following conditions are met:

(a) Australian demand for a product or service is not being met on reasonable terms, and access to the patented invention is essential for meeting this demand.

(b) The applicant has tried for a reasonable period, but without success, to obtain access from the patentee on reasonable terms and conditions.

(c) There is a public interest in providing access to the applicant, having regard to:

• costs to the patentee from granting access to the patented invention
• benefits to consumers and the licensee from the licensee’s access to the invention
• longer-term impacts on community wellbeing.

(d) The terms of any compulsory licence order are consistent with public interest, having regard to:

• the right of the patentee to obtain a return on investment commensurate with the regulatory and commercial risks involved
• the right of the public to the efficient exploitation of the invention.

Draft Finding 6.5

There is an apparent inconsistency between the grounds for issuing a compulsory licence in the Australia–United States Free Trade Agreement and the reasonable requirements of the public test in the Patents Act 1990 (Cth).

Draft Recommendation 6.5

The Australian Government should seek to repeal s. 136 of the Patents Act 1990 (Cth). Current and future international treaty obligations should be incorporated directly into the Patents Act 1990 (Cth) or its subordinate legislation.

Draft Finding 6.6

It is generally in the parties’ best interest to negotiate a voluntary licence in a dependent patent situation. A separate dependent patent ground is unnecessary, where robust competition and public interest grounds for compulsory licensing already exist.

Draft Recommendation 7.1

The Australian Government should seek to amend s. 163 of the Patents Act 1990 (Cth) to make it clear that Crown use can be invoked for the provision of a service that the Australian, State and/or Territory Governments have the primary responsibility for providing or funding.

Draft Recommendation 7.2

The Australian Government should seek to amend the Patents Act 1990 (Cth) to:

• require the Crown to attempt to negotiate use of the patented invention prior to invoking Crown use
• require instances of Crown use to be approved by a Minister (the relevant Federal Minister or State Attorneys General), and that the patentee be provided a statement of reasons no less than 14 days before such use occurs
• specify that in instances of Crown use, the patentee is entitled to remuneration determined on the same basis as that for a compulsory licence.

These first two requirements should be able to be waived in emergencies. However, in all cases patentees should be provided with immediate notice thattheir patents have been used, and a statement of reasons as soon as practical thereafter.

Draft Recommendation 10.1

IP Australia should develop a plain English guide on the compulsory licensing provisions of the Patents Act 1990 (Cth). The guide should be available through the IP Australia website.

Information Request 9.1

The Commission requests further input on the likely costs and benefits of introducing a licence-of-right mechanism in Australia, and whether there would be a net benefit. Feedback is also sought on how such a mechanism should be designed, such as:

• how licence terms and conditions would be determined in cases where the parties fail to reach an agreement
• whether incentives should be provided to patent owners who register a licence of right, such as the reduced patent renewal fees offered in some countries.

Interlocutories

'Irreconcilable Differences? Interlocutory Injunctions for Defamation and Privacy' by David Rolph in 17(2) Media and Arts Law Review (2012) 170-200 comments that

The growing recognition of enforceable rights to privacy across the common law world creates tensions with the existing protections afforded to another dignitary interest, reputation, through the tort of defamation. One area in which this tension is acute is the disposition towards injunctive relief. Defamation law has consistently taken a restrictive approach to injunctive relief, based on a commitment to freedom of speech and an aversion to prior restraint. Yet courts, particularly in the United Kingdom, have shown a readiness to grant injunctions to protect privacy. The interaction between reputation and privacy has not been adequately explored. Taking as its starting-point the decision of Tugendhat J in Terry v Persons Unknown, this article analyses the potentially conflicting approaches to injunctive relief in defamation and privacy. It argues that seeking to ascertain whether the essence of the proceedings in reputation or privacy does not provide a principled approach to the resolution of this problem. The interaction between defamation and privacy poses a problem for the coherent and orderly development of the law. Viewed from this perspective, the article argues that a novel cause of action needs to develop to ensure coherence with the well-established cause of action for defamation. In doing so, it examines a difficult issue of principle raised by this interaction, such as the concept of ‘false privacy’, as well as challenging the view that an award of damages vindicates a plaintiff’s reputation, whereas a plaintiff’s privacy can only be protected by an injunction.