The test for infringement of circuit layout rights

Circuit layout rights automatically protect original layout designs for integrated circuits and computer chips under the Circuit Layouts Act 1989 (Cth) (Act). While this right is a derivative of copyright law principles, they are a separate and unique form of protection. This article aims to examine the test for infringement of circuit layout rights, which involves four distinct elements such as eligible layout, copying, without authorisation and substantial part.

Is it an eligible layout?

Section 17 of the Act will provide ‘EL Rights’, which are an exclusive set of rights in relation to circuit layouts, to eligible layouts. An eligible layout is defined in section 5 of the Act as an original circuit layout:

the maker of which was, at the time the layout was made, an eligible person; or
that was first commercially exploited in Australia or in an eligible foreign country.

In this context, an eligible person, per section 5, means a/an:

Australian citizen or person resident in Australia;
body corporate incorporated by or under a law in force in a State or Territory;
citizen, national or resident of an eligible foreign country; or
body corporate incorporated by or under a law of an eligible foreign country.

An original circuit is one which involved a creative contribution by the maker or was not commonplace at the time it was made^[1] and does not require an element of creativity.^[2] The person who makes an eligible layout is the first owner of the EL rights in that circuit layout and will hold those EL rights exclusively.^[3]

Establishing both, that a particular circuit is an eligible layout and was made or first commercially exploited by an eligible person or foreign country, section 17 will provide that person or country three exclusive rights to:

copy the layout, directly or indirectly, in a material form;
make an integrated circuit in accordance with the layout or a copy of the layout; and
exploit the layout commercially in Australia.

The eligible person or foreign country is afforded these exclusive rights for the duration of the protection period, which is generally ten (10) calendar years after the eligible layout was first commercially exploited.^[4]

Infringement of EL Rights

The three (3) exclusive rights discussed above are each capable of infringement in their own rights. That is, one may be infringed without exploiting the remainder. Section 19 of the Act provides that infringement will occur where a person without authorisation:

copies, or authorises the copying, of the layout in a material form, for example, the reproducible form;
makes, or authorises the making, of an integrated circuit made in accordance with the layout; or
commercially exploits, or authorises the commercial exploitation of, the layout in Australia if the person knows or ought reasonably to know, that they were not licensed by the owner of the EL Rights to do so.

It is not the case that any of these infringing acts need to be done to the ‘whole’ of the eligible layout in order to constitute an infringement of EL Rights. Pursuant to section 13 of the Act, if an infringing act as described above applies in respect of only part of an eligible layout, the EL rights will have been partially infringed.^[5]

Section 23 of the Act contains a variety of exceptions to the infringement provision above. Pursuant to this section, copying an eligible layout for the purposes of evaluation and analysis leading to the development of an original circuit layout based on such analysis is not an infringement of EL Rights. This original circuit, notwithstanding that it was devised subsequent to an analysis of an eligible layout, may be made into an integrated circuit or commercially exploited.

The case of Lumen Australia

The case of Lumen Australia Pty Ltd v Frontline Australasia Pty Ltd [2018] FCA 1807 provides an interesting discussion and application by the Federal Court of the law relating to infringement of circuit layout rights. The case involved two (2) manufacturers of engine control units (ECU). Lumen Australia Pty Ltd ACN 007 285 501 (Lumen) designed and manufactured an ECU which the Court found to constitute an original circuit and eligible layout first commercially exploited in Australia in 2011 (Lumen Layout). As a result, Lumen owned the EL Rights Lumen Layout subject to a protection period ending at the end of 2021.

The Court found that Frontline Australasia Pty Ltd ACN 073 668 649 and Love Strategic Investments Pty Ltd ACN 158 532 800 (together: Vision), a competitor of Lumen, had copied and subsequently commercially exploited the Lumen Layout, or a substantial part of the Lumen Layout, in a material form and made an integrated circuit in accordance with the Lumen Layout, or a substantial part of the Lumen Layout, without licence or authority from Lumen. The Court found Vision had breached section 19 of the Act. In their defence, Vision pleaded that their ECU was not an integrated circuit within the meaning of section 5 of the Act and the Court agreed with reliance had on the expert witness available at trial.

Takeaways

The Act provides stringent protections for eligible circuit layouts. Such circuit layouts need to be original and made by an eligible person or foreign country and, in such case, that person or country will enjoy EL Rights in the eligible layout for a period of around ten (10) calendar years.

Links and further references

Legislation

Circuit Layouts Act 1989 (Cth)

Cases

IceTV Pty Ltd v Nine Network Australia Pty Ltd (2009) 239 CLR 458

Lumen Australia Pty Ltd v Frontline Australasia Pty Ltd [2018] FCA 1807

Further information about circuit layouts and copyright

If you need advice on protecting your circuit layout or any other form of copyright, contact us for a confidential and obligation-free discussion:

Malcolm Burrows B.Bus.,MBA.,LL.B.,LL.M.,MQLS.
Legal Practice Director
T: +61 7 3221 0013 (preferred)
M: +61 419 726 535
E: mburrows@dundaslawyers.com.au

Disclaimer

This article contains general commentary only. You should not rely on the commentary as legal advice. Specific legal advice should be obtained to ascertain how the law applies to your particular circumstances.

[1] Circuit Layout Act 1989 (Cth) s 11.

[2] IceTV Pty Ltd v Nine Network Australia Pty Ltd (2009) 239 CLR 458, [33].

[3] Circuit Layout Act 1989 (Cth) s 16(1).

[4] Circuit Layout Act 1989 (Cth) s 5.

[5] Circuit Layout Act 1989 (Cth) s 13.