May 2004

IP & IT law update - Spam Act & domain name availability

This issue we focus on news relevant to the marketing, advertising and promotion industries.

Spam Act to be supplemented by e-Marketing Code

The Spam Act became law in December 2003 with a proviso that its penalty provisions would come into effect 120 days later.

All provisions of the Spam Act came into effect on 10 April 2004, and the Australian Communications Authority (ACA) is responsible for enforcing these provisions.

Australian businesses using e-mail, SMS and other electronic message formats for commercial purposes face harsh penalties if they breach prohibitions in the Spam Act (see summary over the page).

The ACA has encouraged development of an Email and Mobile Marketing Code of Practice (the e-Marketing Code), intended to complement the Spam Act.

Recently, industry groups, regulators and consumer organisations have come together to develop the e-Marketing Code, which will clarify some 'grey areas' such as consent and viral marketing. The Code Development Committee includes the Australian Consumers Association, Small Enterprise Telecommunications Centre, Qantas, Legion Interactive, Internet Industry Association, Australian Retailers Association, Advertising Federation of Australia, Australian Direct Marketing Association, US Email Marketing Association, NZ Direct Marketing Association, and Australian Competition and Consumer Commission; and the ACA has observer status on the Committee.

It is intended that the Code will be presented to the Commonwealth Government for formal registration by the ACA. This will make the Code binding on all organisations that use email or mobile as a primary form of marketing, and third party organisations that market on behalf of their clients.

Registration of the Code will allow the ACA to issue warnings, and directions to comply, effectively to any participant in the e-marketing industry in Australia.

The e-Marketing Code is due to be completed in mid-2004, with a draft due to be released for public comment in June.

If your business messages via e-mail or mobile phone for marketing or other commercial purposes, you should:

  • ensure you have checked that you comply with the Spam Act; and

  • review the draft e-Marketing Code before it starts to apply, so you have a chance to change provisions that are likely to pose significant risks for your business.

auDA warns: check .au domain name availability!

The .au Domain Administration Limited (the policy authority and industry self-regulatory body for the .au domain space) recently released a statement advising marketers to ensure that they investigated domain name availability before launching new brands.

More than ever before, Australians are relying on the Internet as a source of information about products and services, and we are now conditioned to looking for local brand names with .au domain names.

As a result, domain name availability has become a major influence on the choice of brand names.

Media reports have recently pointed out that this applies even in the property development industry, where property names and brands are often determined by domain name availability because they are marketed using the Internet as a major plank in the developers' marketing strategies.

Creating a new brand name where the domain name equivalent is already registered can have dramatic financial and legal repercussions, including:

  • need to pay substantial amounts to obtain your preferred domain name;

  • inability to obtain your preferred domain name (leading to the need to market using a domain name that is not ideal and may reduce effectiveness of your marketing spend);

  • potential liability to other traders who are already using the brand name. This can manifest itself as a claim for infringing a trade mark, a passing off claim or a claim that you are engaging in misleading and deceptive conduct under the Trade Practices Act.

It is not hard to check the availability of domain names through the 'Whois' database: just go to www.ausregistry.com.au to see if your preferred .au domain name is already taken by someone else.

Before committing to a new brand, we also suggest you ensure some searches are performed, to minimise the risk that the brand is already being used by another trader.

As a bare minimum, you should arrange for a search of the official register under the Trade Marks Act.

If you use a brand that is already a registered trade mark (even where you have registered the equivalent domain name), you risk facing a claim of trade mark infringement from the owner of the registered trade mark.

Fighting these claims can be time-consuming and costly, even if you win the fight. And, if you lose the fight, you may find a Court ordering you to pay all your profits from the new product to another trader. You can minimise the risk of claims from other traders, by providing searches of the official trade marks register and other sources of information about existing brands.

 

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