Although the Intellectual Property (Miscellaneous Amendments) Ordinance 2000 is old news having been gazetted in July, it is intended to be brought into force next year and is currently receiving some publicity from the government. The principal purpose of the Ordinance is to make it clear that a company which knowingly uses an infringing copy of a copyright work in connection with its business commits a criminal offence. In reality, this is not a change in the law but is merely a clarification of Section 31 of the Copyright Ordinance to read that anyone who "& possesses for the purpose of, in the course of or in connection with, any trade or business & a copy of a work which is, and which he knows or has reason to believe to be infringing copy of the work & " will be infringing copyright and committing an offence. In this amendment the words "& for the purpose of trade or business & " have been replaced with "& for the purpose of, in the course of or in connection with, any trade or business & ".

Beijing court issues rules on cybersquatting

According to a report on a China based website, a Beijing Court has issued rules in respect of the registration of domain names that violate third party trade marks. These rules provide that any party attempting to register a trade mark as a domain name may be fined. The rules will initially be implemented only by the courts in Beijing, however it is envisaged that they will eventually be extended to other PRC courts.

US court holds that "crawling" on a third party Website may amount to trespass

The US District Court of North California recently ruled in the case of eBay Inc v Bidder s Edge Inc. The US online auction company e-Bay, sued Bidder s Edge, an auction aggregate site, alleging trespass, false advertising, trade mark dilution, computer fraud and abuse, unfair competition, misappropriation, interference with prospective economic advantage and unjust enrichment.

The law suit centred on the use by Bidder s Edge of a software robot to "crawl" online auction sites such as eBay to aggregate information on the items which are available for auction, enabling online auction participants to "find bargains from numerous online auctions". Users of the Bidder s Edge web site were able to search for items relating to numerous online auctions without having to search each host site individually. Bidder s Edge s web site displays brief descriptions of the auction items on offer and provides links to each auction site if users require more detailed information relating to each auction item.

Evidence was adduced showing that approximately 69% of the auction items contained in Bidder s Edge s databases were from auctions hosted on eBay. It was also shown that Bidder s Edge accessed the eBay site approximately 100,000 times a day to retrieve information from the eBay web site and Bidder s Edge s crawlers imposed a load of 1.53% on eBay's listing servers.

The Court granted a preliminary injunction preventing Bidder s Edge from using crawlers on eBay s web site, primarily on the ground of trespass. The Court accepted the argument that if Bidder s Edge s activity was allowed to continue, other auction aggregators may engage in similar recursive searching of the eBay system to such an extent that eBay may suffer irreparable harm from reduced system performance, system unavailability or data losses. It followed therefore, that potentially, eBay could suffer irreparable damage.

Bidder s Edge argued against the preliminary injunction, stating that eBay s presumption of irreparable harm could be rebutted by evidence. Bidder s Edge adduced evidence showing that eBay engaged in the pattern of granting licenses to third parties to use robots to crawl eBay s web site for information. Accordingly, Bidder s Edge argued that eBay could be properly compensated by royalty rather than with an injunction. In addition, Bidder s Edge produced evidence that eBay had delayed initiating proceedings for 2 years thereby negating the idea of irreparability.

The Court did not accept Bidder s Edge s arguments as there was no evidence suggesting that eBay indiscrimately licensed all companies to use crawlers on its web site. The Court accepted on evidence that eBay carefully chose online aggregators who were bound by eBay s licensing arrangements and further dismissed Bidder Edge s allegations that eBay s had delayed taking proceedings.

First published in E-lawasi@ in October 2000.