Intellectual Property, Technology & Media Newsletter – March 2022 

01 March 2022

Welcome to our Newsletter, bringing you the latest in Intellectual Property, Technology and Media Law news.

Space law launches at HWLE

As a result of advancements in technologies and reduced barriers to entry, space increasingly presents opportunities for both startups and established businesses. HWL Ebsworth’s new space team is across developments in the space industry, and well-positioned to advocate for businesses involved in space activities. We can assist with key regulatory compliance as well as industry-focused commercial legal support for R&D grants and collaborations, technology commercialisation, tax and structuring issues, property transactions, environmental and native title issues, intellectual property protection, IT procurement and data and cybersecurity matters. Check out our new expertise page here, and if you’re in Adelaide, look us up at the upcoming Australian Space Forum on 3 March 2022.

Commonwealth Government announces boost to commercialisation funding

The Commonwealth Government has announced further measures to boost research commercialisation in Australia. The University Research Commercialisation Action Plan (Action Plan) puts six specific national manufacturing priority areas at the core of the agenda: defence, space, food and beverage, resource technology and critical minerals, medical products, and recycling and clean energy. The Action Plan contemplates:

  • funding in the order of over $1.5 billion for accelerator programs, focusing on bridging the ‘valley of death’;
  • additional investment into select ‘Trailblazer Universities’ demonstrating a willingness to adopt research commercialisation reform;
  • reforms to existing university funding to prioritise commercialisation; and
  • support for additional industry PhDs and research fellowships.

The Action Plan incorporates the previously announced Higher Education Research Commercialisation IP Framework (previously discussed here), which is aimed at standardising R&D and commercialisation agreements to make it easier for research organisations and industry to work together. A draft suite of documentation for that framework was also released recently for a brief consultation period closing on 25 February.

The Action Plan also references the patent box tax concession which will shortly be introduced for medical and biotechnology industries (previously discussed here).

For further information or assistance please contact the authors Kristie Schubert or Nikki Macor Heath.

New ATO ruling: ‘R&D expenditure ‘at risk’ rule 

The ATO released Taxation Ruling 2021/5 (TR 2021/5) on 22 December 2021 which provides clarification in regards to the circumstances in which a company’s Research and Development (R&D) tax offset may be reduced or denied where R&D expenditure is not considered ‘at risk’.

Broadly, the ‘at risk’ rule under section 355-405 of the Income Tax Assessment Act 1997 (ITAA 1997) compares consideration with R&D expenditure and if an entity conducting R&D, or its associate receives or expects to receive consideration as a direct or indirect result of incurring expenditure on R&D activities, its notional R&D deductions may be reduced as a result of the ‘at risk’ rule.

The intention of TR 2021/5 is to clarify the operation of the law and to ensure companies only receive an R&D tax benefit where they bear the financial risk as a result of the expenditure they incur on their R&D activities.

Implications: We are aware that the ATO is currently actively considering cases where they consider the ‘at risk’ rule may apply. Accordingly, if you undertake R&D activities under commercial contracts and are expected to be reimbursed or receive consideration for this work, it is imperative to proactively determine whether there may be any impact on the eligibility of your R&D expenditure.

If you would like any further information, or would like to arrange a discussion in regards to how the ‘at risk’ rule or new guidance in TR 2021/5 may impact your arrangements, please reach out to Kristie Schubert.

Court confirms Facebook USA to face Australian proceedings for alleged breach of Privacy Act

The fallout from Facebook’s Cambridge Analytica scandal continues to make its way through the Federal Court system, with the latest development confirming Facebook’s US-based entity will need to defend alleged Australian privacy breaches.

In March 2020 the Office of the Australian Information Commissioner (OAIC) brought action against Facebook USA and Facebook Ireland in the Federal Court, alleging serious or repeated contraventions of the Privacy Act 1988 (Cth) associated with Cambridge Analytica’s ‘This Is Your Digital’ life app.

In April 2021 the Federal Court permitted the OAIC to serve its claim on Facebook USA and Facebook Ireland, notwithstanding that they were located outside of Australia. Facebook USA appealed this decision to the full bench of the Federal Court, trying to claim that Facebook Ireland was the only entity responsible for operation of Facebook in respect of Australian users.

Click here to read more.

Beware of what you put in the comments: The Social Media (anti-trolling) Bill 2022

The Social Media (Anti-Trolling) Bill 2022 (Bill) intends to create a novel framework to empower Australians to institute defamation proceedings where defamatory material has been posted anonymously on a social media platform in Australia. Despite its title the Bill is heavily focused on defamation rather than trolling.

The Bill seeks to address the issues raised by the High Court’s decision in Fairfax Media Publications v Voller [2021] HCA 27 in which the majority determined that individuals and organisations with social media pages on which third party material can be posted may be ‘publishers’ of that material for the purposes of defamation law. Consequently, a page owner could be liable even when they were unaware of the comments made on their social media page.

Click here to read more.

Sportsbet cuts its losses after record $2.5 million fine for spam offences

Sportsbet Pty Ltd has paid a record infringement notice of just over $2.5 million and has committed to refund around $1.2 million to customers after an investigation found that Sportsbet sent unlawful spam to consumers.

The Australian Communications and Media Authority (ACMA) found that Sportsbet breached the Spam Act 2003 (Cth). The Spam Act regulates direct marketing messages, otherwise known as ‘commercial electronic messages’, which includes offers to provide goods and services, promotions or advertisements.

Click here to read more.

In case you missed it, the following article was recently written and published by our team:

What the NFT?

Non-Fungible Tokens (NFTs) are certificates stored on a blockchain which are each linked to some underlying asset such as a digital artwork. These tokens can be bought and sold using cryptocurrencies, and some are attracting substantial amounts of money.

The ‘owner’ of a token will not necessarily have legal ownership of the linked asset. In the case of artworks, NFTs do not replace traditional copyright law, and absent some express licence or transfer of copyright ownership, the owner of an NFT will not have any rights to deal with the underlying work.

There is very little regulation specially addressing NFTs, but existing laws may have application.

Click here to read more.

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