Australia's commercial contract framework is governed by the common law, supplemented by equitable doctrines, statutes (Commonwealth, state and territory) and international law instruments. There is no codification of the law governing contracts.

For consumer goods and services contracts (a consumer may include a business in certain circumstances), the Australian Consumer Law (ACL) (which is a schedule of the Competition and Consumer Act 2010 (CCA)) applies. This legislation covers purchases of goods or services worth less than $40,000.00, or when the goods or services are of a kind that a person would usually buy for their personal, domestic or household use or consumption. There are also state and territory consumer laws.

The ACL also includes an unfair contract terms regime that applies to:

• Standard form contracts for a supply of goods or services or a sale or grant of an interest in land to an individual whose acquisition of the goods, services or interest is wholly or predominantly for personal, domestic or household use or consumption
• Standard form contracts where at least one of the parties is a small business (a business which employs less than 20 people) and the price payable upfront is AU$300,000 or less or AU$1 million or less for contracts with a term longer than 12 months

Commercial contracts with Commonwealth and state government agencies may be subject to additional regulations.

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Copyright can subsist in both works, which include original literary, dramatic, musical and artistic works, and subject-matter other than works, which include sound recordings, cinematograph films, television and sound broadcasts and published editions of works.

There is no registration requirement or publication requirement for a valid copyright (with the exception of television and sound broadcasts and published editions of works, which must be published).

The exclusive rights for original works are to reproduce, publish, perform, communicate to the public and make an adaptation of the work, and to enter into commercial rental arrangements for a work reproduced in a program or sound recording.

The exclusive rights for subject matter other than works are to make a copy of the work, communicate it to the public and to enter into a commercial agreement in respect of the work.

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Copyrights are governed by the Copyright Act 1968 (Copyright Act). There is no state-based copyright law and there is no common law of copyright, but there are court judgments that impact the interpretation of the Copyright Act. The Copyright Act provides for moral rights for original works and subject matter other than works except for sound recordings, sound and television broadcasts and published editions. It also provides performers' rights for performances.

Australia is a party to the Berne Convention, the TRIPS Agreement, WIPO Copyright Treaty and the WIPO Performances and Phonograms Treaty and the Trans-Pacific Partnership Agreement.

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For original works that are published during the author's lifetime, copyright protection lasts for 70 years after the death of the author. For original works that are not published during the lifetime of the author, the copyright protection lasts for 70 years from the date of first publication.

For subject matter other than works, the duration of the protection depends on the type of work.

For television and sound broadcasts, copyright lasts for 50 years after the expiration of the calendar year in which the broadcast was made and for printed editions, 25 years after the expiration of the calendar year in which the edition was first published. For sound recordings and cinematograph film, copyright lasts 70 years after the end of the calendar year in which the recording or film is first published. 

Last modified 6 Apr 2018

Co-ownership of an original work is recognized where the work has been produced by the collaboration of two or more authors and in which the contribution of each author is not separate from the contribution of the other author(s). Subject to a written agreement to the contrary, all co-owners of copyright must consent to the licensing of the copyright by any other joint owner.

An owner of a copyright may grant a license over some or all of the owner's rights. Statutory licensing schemes operate to allow certain copyrights to be used without the permission of the copyright owner, but this is conditional on the payment of equitable remuneration for that use. An owner can also assign their copyright or future copyright to another person.

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The court may grant relief for an infringement of copyright by way of injunction, damages or (alternatively to damages) an account of profits. Criminal penalties are also available.

In cases of innocent infringement, where the defendant was unaware or had no grounds for suspecting that their act constituted infringement, damages are unavailable.

The court has discretion to award additional damages. In doing so, the court must consider, among other factors, the flagrancy of the infringement, the need to deter similar infringements, the conduct of the defendant, whether the infringement involved conversion of a work and the benefits that accrued to the defendant by virtue of the defendant's infringement.

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Protection is given to the layout of integrated circuits (or semiconductor chips, commonly known as computer chips) under the Circuit Layouts Act 1989 (CLA), if the following requirements are met:

• The circuit layout is a representation fixed in any material form of the three-dimensional location of the active and passive elements and interconnections making up an integrated circuit
• The circuit layout is original
• The circuit layout is either made by an eligible person or first commercially exploited in Australia or another eligible country

The owner of an original circuit layout has exclusive Eligible Layout Rights (EL Rights), which include the exclusive rights to:

• Copy the layout, directly or indirectly, in a material form
• Make integrated circuits from the layout
• Exploit it commercially in Australia
• Authorize another person to do any of the above acts. Authorization is usually given in the form of a license. Registration is not required for layout rights and protection is automatic

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Circuit layouts are governed by the Circuit Layouts Act 1989.

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The duration of protection is ten calendar years after the calendar year in which the circuit layout was made. If the circuit layout is first commercially exploited within that period, the term is ten calendar years after the year in which commercial exploitation first took place.

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The maker of an eligible circuit layout is generally the first owner of its EL Rights (please refer to exceptions enumerated in the "Intellectual Property in Employment Context" section). EL Rights are personal property rights that can be assigned, licensed and devolved in a will.

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The available remedies for infringement are an injunction to stop the infringing activities and either damages or an account of profits.

If the defendant's act was an innocent infringement (that is, they were not aware, and had no reasonable grounds for suspecting, that their act constituted an infringement), the plaintiff is not entitled to any damages against the defendant. In such circumstances the plaintiff is, however, entitled to an account of profits.

Additional damages may also be awarded on the same basis as additional damages for infringement of copyright under the Copyright Act 1968.

Last modified 6 Apr 2018

A patent is a statutory right that must be applied for, and may be granted following examination. An owner of a granted patent for a product has exclusive rights to:

• Make, hire, sell or otherwise dispose of the product
• Offer to make, sell, hire or otherwise dispose of the product
• Use or import the product
• Keep the product for the purpose of doing any of the above

An owner of a granted patent that is a method or process has exclusive rights to use the method or process, or exercise any of the above exclusive rights in respect of a product resulting from such use.

The owner also has an exclusive right to authorize another person to exercise the above rights.

There are two types of patents: standard patents and innovation patents.

To be patentable, an invention must be a manner of manufacture, novel, involve an inventive step (or innovative step for innovation patents), useful and not have been secretly used.

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Patents are governed by the Patents Act 1990 (Cth).

Australia is a party to the Paris Convention, the Patent Cooperation Treaty, the Budapest Treaty on the International Recognition of the Deposit of Microorganisms for the Purposes of Patent Procedure 1977, the TRIPS Agreement and the Trans-Pacific Partnership Agreement.

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The duration of patent protection is 20 years from the effective date of filing for a standard patent, except for pharmaceutical standard patents which may have a maximum of up to 25 years to allow for the regulatory approvals processes. The duration of protection for an innovation patent is eight years from the effective date of filing. Patent rights are based on a "first to file" system.

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A patent owner can grant a license to another party. The patent owner should register the license for it to be defensible against third parties. However, failure to register the license does not affect the validity of the license. Compulsory licenses may be granted in limited circumstances, including if the owner fails to exploit their patent.

A patent owner can assign their patent interest (or part of the interest) to another person. They must register the assignment for it to be defensible against third parties. However, failure to register does not affect the validity of the assignment.

Patents can be co-owned. Co-owners can exercise their exclusive rights without accounting to the other. Co-owners cannot grant a license or assign their interest without consent of the other co-owners.

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The available remedies for infringement include injunction and damages or an account of profits. The damages may be calculated with reference to the value of the diverted sales or the going royalty rate that the infringer would have had to pay had a license been granted.

A court can refuse to award damages or make an order for an account of profits if it determines that the infringement was innocent. An innocent infringement occurs when the defendant was not aware, and had no reasonable grounds for suspecting, that their act constituted an infringement.

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Trademarks in Australia are protectable on a first to use or register-based system. Both registered and unregistered marks can be protected. A registered trademark is a sign used to distinguish the goods and services of one trader from those of another.

A sign can be a word, phrase, letter, number, sound, smell, shape, logo, picture, aspect of packaging or a combination of these.

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Australian trademark law is based on the Trade Marks Act 1995 (TMA) as well as common law use-based rights which provide protection for unregistered rights under the common law tort of passing off.

Trade practices legislation, principally the Competition and Consumer Act 2010 (CCA), provides additional remedies to trademark owners of registered and unregistered trademarks.

Registered trademarks can be signified through use of the ® symbol.

Unregistered trademarks can be signified through use of the ™ symbol.

Australia became a party to the Trademark Law Treaty in 1998.

Australia became a party to the Madrid Protocol in 2001.

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Subject to fulfilling the necessary requirements, a trademark registration provides a valuable statutory monopoly for an indefinite period of time. There is an initial ten year registration period and the registration can be renewed indefinitely every ten years without the need to provide evidence of use. However, a trademark registration that is more than five years old can be removed from the register if it has not been used for a period of three years or more.

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A trademark registration grants exclusive rights in the trademark to use, license or sell the trademark within Australia for the goods and services for which it is registered. This means the owner of a registered trademark can prevent others from using the mark or a deceptively similar mark in relation to the same or similar goods or services.

Licenses need not be recorded to be effective, and there is no specific provision allowing recordal on the Trade Marks Office Register.

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Where infringement of a registered right is established, the relief that a court may grant includes an injunction to prevent further infringement and either damages or an account of profits at the plaintiffs option, and legal costs. Registered trademark owners may also give Australian Customs Service a notice objecting to the importation of goods that infringe their registered trademarks.

If a trademark is not registered and another person uses it, a passing off action under common law or a claim for a breach of the prohibition against misleading or deceptive conduct (under the CCA) may be pursued. Successfully pursuing an action for passing off can be considerably more difficult than taking action under the TMA because an action for passing off requires proving goodwill or reputation in the trademark and proving that use of the trademark has misled or deceived consumers as to the origin of goods and services sold under the mark.

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Trade secrets are treated as "confidential information" and can be protected through a breach of confidence claim.

Such a claim can be brought if:

• The information can be identified with specificity
• The information was confidential
• There was an obligation of confidence on the defendant
• The defendant used the information without the plaintiff’s consent and to their detriment

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Confidentiality of trade secrets is usually stipulated in the contracts between parties and is therefore enforceable under such contract. However, in instances where there is no contract, a plaintiff may be able to rely upon the common law doctrine of breach of confidence.

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There are no specific statutory limits applicable to trade secret rights. For breach of a confidentiality agreement (or provisions), a six-year limitation period will apply.

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Trade secrets cannot be assigned as they are not property. However, contractual rights to trade secrets can be assigned and licensed. An assignee or licensee can sue others for a breach of confidence.

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Remedies for a breach of confidentiality in trade secrets include the equitable remedies of injunctions, imposition of a constructive trust, delivery-up, equitable compensation and an account of profits, in addition to usual remedies for breach of contract where relevant.

In determining the severity of the remedy, the court may take into account the advantage given to the defendant when they acquired and exploited the plaintiff's trade secrets.

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Not applicable.

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Not applicable.

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Not applicable.

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Not applicable.

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Not applicable.

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Copyright

The Copyright Act provides that the employer will own the copyright if an employee made the work "in pursuance of the terms of his employment by another person under a contract of service or apprenticeship." Recent case law has clarified that it will not be sufficient that an employment relationship exists and instead the employee must have made the work within the scope of their duties or because the contract of employment expressly or impliedly required (or at least authorized) the work to be made.

Patent

Patent legislation does not provide for the ownership of an invention in an employment context. Under the common law, the issue is whether the invention was made in the course of the employee's employment and whether it was the employee's role to invent, ie, whether they had a "duty to invent." This frequently is (and should be) dealt with in the terms of the contract of employment although the contract may not always be determinative in deciding whether the employee owns the patent.

Confidential information

Employment contracts frequently include a confidentiality provision or there is a standalone confidentiality agreement. Even where there is no express agreement, a court will usually imply an obligation of confidence in an employment relationship and will consider factors such as the nature of the relationship and the nature of the information.

Mask works / circuit layouts

Under the CLA, if a circuit layout was made by a person in the course of his employment under a contract of service or apprenticeship, the employer is the owner unless there is an agreement in writing to the contrary.

Last modified 6 Apr 2018

An independent contractor (including a consultant) owns the copyright in any work, unless there is an agreement in writing executed by the parties to the contrary.

Equally, an independent contractor has the right to patent an invention that he invented unless the contract between the contractor and the principal states otherwise.

It is often presumed that an independent contractor and a principal have a confidential relationship and thus the independent contractor has an obligation of confidentiality. However, specific confidentiality obligations are usually (and should be) included in the agreement between the parties.

Last modified 6 Apr 2018

There is no requirement to register commercial agreements. However, if security interests over personal property are created pursuant to an agreement they should be registered under the Personal Properties Securities Act 2009 (Cth). Registration is generally required to perfect the security interest and make it enforceable against third parties. Failure to register will not void the security but may result in the unregistered security interest being defeated by a later registered security interest or bona fide purchaser without notice.

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It is preferable to use consumer friendly English.

Last modified 6 Apr 2018

The Copyright Act provides a 'safe harbor’ regime for service providers ("carriage service providers" as defined in the Telecommunications Act 1997), which limits their liability for copyright infringement by their customers (ie, liability by authorizing the infringing acts of their customers). Service providers must satisfy certain criteria in order to be protected by this scheme. Recent case law has left open the possibility of service providers being found to have authorized copyright breaches through a failure to act against infringing customers.

Last modified 6 Apr 2018

These types of terms and contracts are enforceable provided they are validly made, which includes ensuring that the users are made aware of and accept the terms of the contract prior to purchase.

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Governing law and choice of jurisdiction (venue for resolution) clauses will generally be upheld by state and Federal Courts in commercial contracts, provided such choice of law does not (and will not) avoid any mandatory law (eg, the ACL for consumer contracts) that would otherwise be applicable. That is, for example, one cannot contract out of the ACL for a consumer contract in Australia by choosing the law of a foreign jurisdiction to apply to govern the contract.

Last modified 6 Apr 2018

Warranty disclaimers which purport to exclude, restrict or modify the consumer guarantees as contained in the ACL are unenforceable.

Warranties against defects must be provided in addition to the consumer guarantees. Documents that evidence a warranty against defect, which may include receipts, labels or packaging in addition to a more formal contract, must contain certain information including the following mandatory text which is provided under the ACL:

Our goods come with guarantees that cannot be excluded under the Australian Consumer Law. You are entitled to a replacement or refund for a major failure and compensation for any other reasonably foreseeable loss or damage. You are also entitled to have the goods repaired or replaced if the goods fail to be of acceptable quality and the failure does not amount to a major failure.

Last modified 6 Apr 2018

Clauses that seek to exclude certain warranties or consumer guarantees or limit liability will be construed strictly against the person that seeks to rely on the clause.

Clauses in standard form consumer contracts or standard form small business contracts that seek to limit or exclude liability are at risk of being considered unfair, and therefore void, under the unfair contract terms regime in the ACL.

Consumer contracts cannot exclude or limit certain consumer guarantees provided under the ACL or limit or exclude liability for breach of them. Any clause that seeks to do this will be unenforceable and such conduct could be considered to be misleading or deceptive and lead to legal action being taken against a person who included such clause in a contract or statement to a consumer.

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Express indemnities are recognized and will generally be enforceable.

Caps on liability under indemnification clauses are generally enforceable but, in some circumstances, may be considered unfair and therefore unenforceable.

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Electronic signatures are acceptable and enforceable in Australia in most instances in which the law requires a signature. Electronic signatures are valid if they are a method that identifies the person who is signing and indicates the person's intention with respect to the information communicated (eg, that the person agrees to the terms of a contract). The method of providing the electronic signature must generally be as reliable as appropriate for the purpose for which the electronic communication was given. Some laws exclude the use of electronic signatures in particular instances.

Last modified 6 Apr 2018