Threats of intellectual property infringement must be backed by action

Michael Owens, Partner, Brisbane
Kylie Pinder, Solicitor, Brisbane
Bell v Steele (No 3) [2012] FCA 246
Controversial Australian artist Richard Bell has emerged victorious in his recent Federal Court proceedings brought against Tanya Steele for her unjustifiable threats of copyright infringement.
While in America, Mr Bell engaged Ms Steele to assist him in shooting film footage which was later used to create his film, “The Blackfella’s Guide to New York,” as well as an accompanying trailer. The trailer was distributed to the Milani Gallery in Brisbane, owned and operated by Mr Bell’s agent, Mr Milani, and published on the Gallery’s website and via a link on the Gallery’s Facebook page.
In October 2011 Ms Steele sent letters to Mr Bell and the Gallery claiming ownership of the copyright in the raw film footage and the trailer. As a result of these threats, the trailer was removed from the Gallery website and not shown to clients at the Milani Gallery. The sale of a catalogue featuring a still image from the trailer was also delayed.
At no stage did Ms Steele commence copyright infringement proceedings against Mr Bell.
Under the Copyright Act, where a person threatens a person with an action or proceeding in respect of an infringement of copyright, a person aggrieved may bring an action against the first mentioned person to obtain a declaration that the threats are unjustifiable, an injunction preventing the continuation of the threats, and damages for losses sustained as a result of the threats. Mr Milani deposed that had the trailer been publicised on the internet and shown at a later exhibition in New South Wales, he would have sold an additional six to eight of Mr Bell’s paintings, and approximately 100 Catalogues, from which Mr Bell would receive $147,000.  Having heard no evidence from Ms Steele to the contrary, the court found that it was appropriate to make the orders for damages in the form sought by Mr Bell in the amount of $147,000, as well as an order for his legal costs.
What this means for you
The case demonstrates that it is essential to obtain legal advice on your prospects of success before threatening a person with an action for infringement of copyright, to avoid the risk of a costly legal action and damages claim being made against you. It is not a defence to an action that the threats were made in good faith based on an honest belief that the act constituted infringement. However the mere notification that intellectual property rights exist in a work does not constitute a threat of action or proceeding.
Equivalent actions for unjustifiable threats exist in relation to infringement of registered designs, registered trade marks and registered patents. Where the threats relate to an innovation patent, you must have your innovation patent examined and certified before you assert your intellectual property rights.
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This update does not constitute legal advice and should not be relied upon as such. It is intended only to provide a summary and general overview on matters of interest and it is not intended to be comprehensive. You should seek legal or other professional advice before acting or relying on any of the content.