Rising Threat of Sophisticated Intellectual Property Scams

Rising Threat of Sophisticated Intellectual Property Scams

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Rising Threat of Sophisticated Intellectual Property Scams

Authors: Zach Sudiro, John Davies, Craig Hong

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3 min read

25 Mar 2025

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    Key Takeaways
  • Scams relating to IP rights and particularly Trade Marks are increasing and becoming more sophisticated aiming to manipulate businesses into making payments or revealing personal or sensitive information.
  • Always exercise a degree of caution when receiving letters or emails from unknown firms or departments relating to your IP.
  • To stay safe, contact your trusted legal adviser if you are unsure as to the authenticity of any correspondence, or wish to register, or renew Trade Marks and other IP rights.

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As we enter the new year, businesses are seeing a concerning rise in the sophistication of scams targeting Intellectual Property (IP) rights.

This article serves as a reminder for businesses to stay vigilant against these emerging scams and offers practical guidance on how to identify and deal with them.

The Increasing Threat: How Scams Are Being Presented

It is becoming increasingly common for businesses with registered IP, such as Trade Marks, to receive unsolicited emails from firms offering IP services. These emails often exploit the fact that contact details for registered IP holders are publicly available through IP Australia’s Trade Mark search register.

These communications typically urge businesses to pay for Trade Mark renewal services, often creating a false sense of urgency. While legitimate IP practitioners may use publicly available registers to find new clients or remind businesses of upcoming deadlines, the cost of such services can often be inflated and subject to negotiation.

However, scammers are also targeting these public registers, particularly focusing on new Trade Mark applications or existing registrations nearing important dates, such as renewals. Recently, we’ve seen more sophisticated scams where fraudsters impersonate government agencies or established legal firms, a trend that IP Australia has flagged as a growing concern (Scams related to managing IP Rights, IP Australia).

link: https://ipaustralia.gov.au/about-us/doing-business-with-us/fraud-and-corruption/scams-related-to-managing-ip-rights

Recognising Scam Red Flags

A recent example of a scam involved an individual posing as an IP practitioner, claiming they had been contacted by a third party to file a Trade Mark application. The scammer then offered to file an urgent Trade Mark application for the business – threatening to file the application on behalf of the third party if the business didn’t act quickly. The email also included threats of legal action and cease and desist orders if the business did not pay for IP services.

Common warning signs of IP-related scams include:

  • False or misleading information
  • Documents with watermarks designed to impersonate government bodies or law firms
  • Urgent requests for action, such as filing a Trade Mark application or paying an inflated invoice

Scammers often target businesses during key periods, such as when new IP rights are being filed or when renewals are approaching. Businesses should be especially cautious during these times.

How to Protect Your Business

If you receive a suspicious email, follow these steps to safeguard your business:

  1. Do not respond to unsolicited communications without first verifying the sender. A simple Google search of the claimed firm or checking the IP Australia Trade Mark register can help confirm the legitimacy of the message.
  2. Consult your trusted legal adviser or an official source if you have doubts about any correspondence concerning IP rights.
  3. Be cautious when considering overseas legal services in relation to IP matters, as some scams involve services from international firms.
  4. Exercise caution – always verify before responding to any requests or paying invoices.
  5. Contact your IP solicitor if you’re unsure whether an email is a scam. They can help confirm if the correspondence is legitimate.

How We Can Help

At Hillhouse Legal Partners, we’re here to help you navigate and protect your intellectual property. Whether you have questions about your IP rights, need professional guidance with applications, or are due for a renewal, we’ve got you covered. Reach out today to Zach Sudiro, John Davies, or Craig Hong.  We’re here to provide the support you need to keep your business safe and thriving.

Areas of Expertise

Corporate & Commercial
Intellectual Property & Technology
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New Privacy Law Guidance about AI Highlights the Need for a Cautious Approach

New Privacy Law Guidance about AI Highlights the Need for a Cautious Approach

Home » Intellectual Property & Technology

New Privacy Law Guidance about AI Highlights the Need for a Cautious Approach

Authors: John Davies, Craig Hong

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10 min read

14 Nov 2024

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    Key Takeaways
  • Recent guidance on Australian privacy laws in the context of AI systems shows that there are many complex issues, and careful controls are necessary to protect businesses from fines and reputational damage.
  • Businesses using AI to make decisions, or as part of important or high-risk work, should be especially careful and should consider blanket prohibitions.
  • Even seemingly innocent uses (e.g., using AI systems to take meeting notes, or as a chatbot to talk to customers) are high risk activities to be done carefully (if at all).

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Businesses should take careful note of the risks of using artificial intelligence (AI) and should implement controls appropriate to their business to ensure use is careful or prohibited.

A breach of Australian privacy law (for example, the Privacy Act 1988 (the Act) may result in significant fines or reputational damage. Given the recency of AI commercialisation, businesses should be especially careful about their compliance when using AI systems as enough time has not passed for best practice steps to develop.

Ensuring sufficient controls (or ensuring prohibition) is especially important where the AI is exposed to personal information, makes decisions for a business (e.g., reviewing and sorting resumes), or is engaging in impactful work (e.g., drafting court material).

As a general comment, it should also be understood that AI systems are often wrong and that their output should be thoroughly factchecked to confirm accuracy.

Best practice will be to not input personal information (especially not sensitive information) into publicly available AI tools, or indeed any AI system unless appropriate safeguards and restrictions are in place.

OAIC Guidance

The Office of the Australian Information Commissioner (OAIC) has issued guidance regarding the deployment of AI systems within an organisation subject to the Privacy Act (APP Entity) to provide a product or service, particularly in the context of generative AI (OAIC AI Guidance).

This guidance is crucial as AI systems are highly complicated and carry numerous complex privacy risks.

We urge all businesses contemplating the use of AI in their business to read the OAIC’s AI Guidance in detail and particularly note the included checklists before undertaking any use of an AI System.

This article does not propose to summarise or repeat the OAIC’s AI Guidance in detail, however a number of key takeaways should be emphasised.

Due Diligence

Prior to use of any AI system, due diligence will be critical, you must understand:

  1. the terms and conditions for the use of the AI system;
  2. how the AI system has been trained and what information it was trained on;
  3. how the AI system will treat the information included in prompts (e.g., is it used to train the AI in future, is it saved locally or remotely);
  4. whether any information included in a prompt will be accessible by publisher of the system (if so, use of the AI system may constitute a disclosure of personal information which is subject to further rules than a use of personal information);
  5. how the AI system is protected from data breaches; and
  6. whether there have been previous data breaches.

You should regularly check and confirm whether any changes occur in respect of the above during the use of the AI system.

Use of Personal and Sensitive Information in AI Systems

Your privacy policy must clearly state how your business uses AI. In some circumstances e.g., where an AI is used to take meeting notes, this will likely be insufficient on its own and the meeting participants should be given an opportunity to opt out.

APP Entities are required by Australian Privacy Principal 6 to only use or disclose personal information for a particular purpose if the information was obtained for that purpose. There are exceptions that permit a use or disclosure for a secondary purpose (e.g., if consent from the individual was obtained). One such exception is where the individual would reasonably expect the APP Entity to use or disclose the information for that secondary purpose if that purpose is related to the primary purpose (or directly related if the information is sensitive information).

The OAIC Guidance relevantly provides that “[i]f your organisation cannot clearly establish that a secondary use for an AI-related purpose was within reasonable expectations and related to the primary purpose, to avoid regulatory risk you should seek consent for that use and/or offer individuals a meaningful and informed ability to opt-out. Importantly, you should only use or disclose the minimum amount of personal information sufficient for the secondary purpose.”

Controls

Prior to using an AI system, a business should consider the worst case scenario, as some AI systems are black boxes and their “reasoning” cannot be extracted and examined. E.g., the OAIC AI Guidance notes that using AI in recruitment could discriminate against candidates based on perceived biases. For this reason, any commercial use of an AI System should include sufficient controls to analyse and manage risks associated with the black box nature of the software.

These controls are discussed in further detail below in our commentary on a recent report by the OVIC.

Businesses which permit the internal use of AI should perform a privacy impact assessment, implement an AI policy containing express requirements for the use of AI systems, and undertake regular staff training on the use of AI.

Generation of personal Information

You should consider that AI systems are trained on a wide range of information, which means they are capable of generating personal information. The OAIC AI Guidance references an example where workplace psychosocial hazard training was partially created with AI and the AI generated a real situation using the real names of the persons involved (who were involved in an ongoing court matter at the time). This event may be considered collecting personal information under the Act and the information collected would need to be treated accordingly as unsolicited personal information.

Meeting minute making

While seemingly innocuous, the risks of using an AI system to record a meeting are substantial – meetings can veer off topic, in which case any personal and sensitive information discussed may well be information the business is not permitted to collect. In that case, that information should be erased or deidentified. Without proper systems in place, this can be easily overlooked from time to time.

AI and images

You also need to be aware that any images generated by an AI may copy part (or all) of an image it was trained on. Such generated images may reproduce personal or sensitive information and may breach copyright laws.

Uploading of images to AI systems should generally be avoided even where no personal or sensitive information is apparent, as the image may contain metadata or sufficient information to identify a location or other personal information may be present to identify a location.

Chatbots

Our view is that any business seeking to use an AI chatbot should seek legal advice beforehand as such activity may result in collection of improper personal and sensitive information. Chatbots also raise particular risks regarding Australian Privacy Principal 10 (ensuring the accuracy of personal information collected) and Australian Privacy Principal 3 which requires that unless unreasonable or impractical to do so, personal information must be collected from the individual directly.

OVIC decision

A deputy Commissioner of the OVIC recently performed an investigation into the use by a child protection worker (the Worker) employed in the Victorian Department of Families, Fairness and Housing (DFFH).

This example is an illustrative example of what controls may or may not be sufficient to guard against the risks of using AI systems.

Conduct

In this example, the Worker used ChatGPT to assist in the drafting of a protection application report, which is submitted to the Children’s Court to assist the court in deciding whether a child needs protection.

The use by ChatGPT of the Worker was plainly inappropriate and dangerous as “the Protection Application Report mistakenly described a child’s doll, that was used by the child’s father for sexual purposes, as a mitigating factor, in that the parents had provided the child with “age appropriate toys””.[1]

Of some interest is the 9 factors identified by the DFFH in their investigation which indicated ChatGPT involvement:[2]

  1. sophisticated language;
  2. overly positive descriptors;
  3. inaccurate information;
  4. unusual content;
  5. unusual terminology;
  6. unusual reference to legal intervention;
  7. unusual Child Protection intervention;
  8. nonsensical references; and
  9. American spelling and/or phrasing.

Any business that, as part of its AI controls, audits work for evidence of AI use, should take note of these examples.

Breach

It was determined that this conduct constituted a breach of Information Privacy Principals 3.1 and 4.1.

Information Privacy Principal 3.1

An organisation must take reasonable steps to make sure that the personal information it collects, uses or discloses is accurate, complete and up to date.

Information Privacy Principal 4.1

An organisation must take reasonable steps to protect the personal information it holds from misuse and loss and from unauthorised access, modification or disclosure.

Controls

The DFFH had the following controls in place at the time of the conduct:

  1. “an acceptable Use of Technology Policy;
  2. eLearning modules on privacy awareness and security awareness;
  3. the DFFH values;
  4. the VPS code of conduct;
  5. Human Rights legislation and associated eLearning module;
  6. communications to leadership and management by way of three education sessions in May 2023 that referred to data security, privacy and other risks associated with GenAI.”[3]

The OVIC decided that these controls were insufficient and there was a need to train all employees, not only management staff.[4]

Since the conduct took place the DFFH created specific “Generative Artificial Intelligence Guidance” (which was circulated on several instances to all DFFH staff), which included two “critical rules”:

  1. “Employees should be able to explain, justify and take ownership of their advice and decisions;”[5] and
  • “Employees should assume that any information they input into public GenAI tools could become public. They must not input anything that could reveal classified, personal or otherwise sensitive information.”[6]

However, the report noted that:

  1. “DFFH has almost no visibility on how GenAI tools are being used by staff. It has no way of ascertaining whether personal information is being entered into GenAI tools and how GenAI-generated content is being applied. Further, as is always the case with policy and guidance, there is no way of guaranteeing that all staff will properly read, understand, and apply these.” [7]
  • “The risks of harm from using GenAI tools are too great to be managed by policy and guidance alone. At present, there are insufficient controls in place regarding staff access to GenAI tools coupled with a lack of assurance capabilities to verify that such use is appropriate. In other words, these controls are insufficient to prevent a re-occurrence of incidents like the PA Report incident.”[8]

Decision

The OVIC decided to issue a compliance notice, with 6 specified actions required (some of which DFFH can apply to amend), including:

  1. DFFH must direct child protection staff to not use any generative AI tools as part of their duties;
  2. DFFH must block access to 15 specified generative AI tools between 5 November 2024 and 5 November 2026;
  3. DFFH must between 5 November 2024 and 5 November 2026 “implement and maintain a program to regularly scan for web-based or external” generative AI tools similar to those directed to be blocked; and
  4. “DFFH must implement and maintain controls to prevent Child Protection staff from using Microsoft365 Copilot” between 5 November 2024 and 5 November 2026.[9]

Takeaway

Businesses which handle important or high risk personal information should be on notice they may not be able to implement sufficient controls around AI systems to prevent breaches of Australian privacy laws and should consider blanket prohibitions to avoid fines or reputational damage.

Hillhouse Legal Partners can assist if you have any questions about treatment of personal or sensitive information, you require the preparation of a privacy policy, or you have experienced a data breach. Feel free to reach out to John Davies, Lawyer or Craig Hong, Director to discuss.

[1] Office of the Victorian Information Commissioner, Investigation into the use of ChatGPT by a Child Protection Worker, available: https://ovic.vic.gov.au/wp-content/uploads/2024/09/DFFH-ChatGPT-investigation-report-20240924.pdf p5.

[2] Ibid p21.

[3] Ibid p23.

[4] Ibid p24 – 25.

[5] Ibid p26.

[6] Ibid p26.

[7] Ibid p28.

[8] Ibid p28.

[9] Ibid p29-30.

Areas of Expertise

Corporate & Commercial
Intellectual Property & Technology
Technology & Startups
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The roles within your Will and Enduring Power of Attorney – Part 3 (Guardian)

The roles within your Will and Enduring Power of Attorney – Part 3 (Guardian)

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The roles within your Will and Enduring Power of Attorney – Part 3 (Guardian)

Author: Tracy Pratt

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3 min read

27 Mar 2023

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  • The role of guardian is an extremely important role as they are appointed to be the substitute parent for your children.
  • Who you chose to be the guardian for your children is a very personal decision and should be made after consultation with the proposed guardian and potentially your children.
  • You can also establish various trusts within your estate for the benefit of your children and direct the management of those trusts to include appropriate contributions towards the upbringing of your children.

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In the third part of this series, we look at the role of the guardian in your Will.

The guardian’s role is to be the substitute parent for your children until they turn 18.

An alternate guardian may also be appointed to act if the first guardian cannot act or continue to act for any reason (e.g. due to death, incapacity or bankruptcy).

You should speak to any family and friends you are considering appointing as guardian/s and perhaps to your children, particularly if they are older.

As with the roles of the executor and trustee, the decision as to who you wish to be the guardian of your children in your Will is ultimately a very personal decision for you.  Your guardian should be a person you intimately trust with your children, who your children know, is usually related to you and is usually around your age as their role may last for up to 18 years.

While ultimately a matter for you, we recommend not appointing spouses as joint guardians. It is a sad fact that about 50% of marriages in Australia end in divorce and there may then be a custody battle over your children.

As we mentioned in the second part of this series, you may wish to give consideration as to whether the guardian should be someone different from the trustee, so that the trustee can offer some oversight on the guardian’s actions during what might be a long time (and vice versa).

You may also wish to consider directing the guardian caring for your infant children be paid a remuneration from the residue of your estate for the guardian’s time in the course of such care.

You can also direct via a Statement of Wishes and/or Guidelines for the Guardians, which are non-binding documents that give directions and wishes to your trustee and guardian about the upbringing of your children.  Apart from lifestyle, personal development and education decisions, you may wish for your children to remain in your home until the youngest of them reaches a certain age or for the guardian to either erect house extensions or to purchase a larger house in order to comfortably accommodate your children, with the trustee making an appropriate contribution from trust assets towards such extensions or purchase.

In the uncertain times today surrounding COVID-19, if your intended guardian resides overseas, you may also wish to particularly consider appointing a temporary guardian in Australia until such time as your permanent guardian is able to travel to Australia or your children are able to leave Australia to travel to the permanent guardian’s country.

These are all very personal decisions and we appreciate there is a lot to get through during the difficult task of administering and distributing an estate. We are professionals who have done this many times, and are happy to assist throughout the entire process to make it as easy as possible.

To discuss an estate plan for your individual circumstances, please contact Tracy Pratt, Lawyer from our Wills, Estates & Trusts team for a free initial consultation on 07 3220 1144 or email.

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Wills & Estates
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Thirsty Works: Federal Court rules on misleading and deceptive conduct claim

Thirsty Works: Federal Court rules on misleading and deceptive conduct claim

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Thirsty Works: Federal Court rules on misleading and deceptive conduct claim

Author: Zach Sudiro

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4 min read

7 Mar 2023

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    Key Takeaways
  • The level of competition within industries has become increasingly fierce. If you are looking to start a new business, or have recently established your own business, it is vital to ensure relevant trademarks, designs and patents are all protected.

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The Federal Court recently ruled on a claim for misleading and deceptive conduct under the Australian Consumer Law[1] (ACL) between Brick Lane Brewing (“Brick Lane”) and the producer of “Better Beer”, Torquay Beverages Co Pty Ltd. [2]

The claim concerned alleged similarities between the packaging, labelling and advertising of Brick Lane’s “Sidewinder” beer and Torquay’s “Better Beer” as depicted below. While the Federal Court did find there were similarities between the products, Justice Stewart ultimately held the contraventions were not made out. 

Background of the claim

On 21 July 2021 Brick Lane launched the Sidewinder beer through a media release that included an image of the product. On 26 July 2021 Mighty Craft Limited announced it would be partnering with Torquay and social media influencers “The Inspired Unemployed” to form “Better Beer Co” and launch Better Beer. 

Brick Lane argued:

  • Torquay’s packaging and promotion (conduct) of their Better Beer induced or was capable of inducing consumers into error by mistaking the products, therefore misleading or deceptive or likely to mislead or deceive;
  • Torquay’s conduct therefore could lead a consumer to mistake the Sidewinder product for a Better Beer or believe Better Beer was associated with Brick Lane. 

The Federal Courts Decision

Importantly, Brick Lane acknowledged that the Sidewinder and Better Beer were made independently of each other and without one party having knowledge of the other’s design. Therefore there was no intentional copying. 

In considering whether consumers were actually likely to be deceived or misled, the Court considered Torquay’s conduct in the context of other surrounding circumstances, including:

  • the reputation of the branding;
  • the extent of differences between the Sidewinder and Better Beer;
  • the circumstances in which the products are offered to the pubic; and
  • whether Torquay copied Brick Lane’s product, intentionally adopting distinctive features of the Sidewinder. 

The role of reputation

Justice Stewart’s judgement emphasised that there is no presumption a hypothetical consumer is familiar with a brand’s product.  When determining if a product’s get-up is misleading or deceptive, some association in the mind of the relevant sector of the public between competing products must be established. The decision reaffirms previous authorites that if this association cannot be established, the use of a similar get-up will not be misleading or deceptive. 

Relevant dates

A contentious point in the case, Justice Stewart also clarified when the relevant date is that consumers are likely to be mislead or deceived. Brick Lane submitted the relevant date was the date the products became available to consumers, while Torquay argued the the relevant date was when the promotion of Better Beer began. 

Justice Stewart was unapologetic in rejecting Brick Lane on this issue, stating the submission “is not supported by authority or logic”.[3] The conduct of Torquay was ruled to not be dependant on the availability of the product for sale, but when public facing activities using the get-up commenced. 

Relevant class

In the decision, Justice Stewart did find that the Sidewinder and Better Beer were in the “health-conscious” segment of the beer market. However, the ruling also provided the beer market is highly saturated, with a large variety of options for consumers. It is therefore more likely that a reasonable purchaser of beer would be less likely to be deceived or mislead by the similarity in the products, instead taking a more careful consideration of their purchase. 

Ultimately, the conduct of Torquay was found to not be misleading or deceptive and that it did not falsely represent any associations with Brick Lane’s products. Hillhouse Legal Partners has experience in dealing with matters relating to intellectual property. Please contact us by email or on 07 3220 1144 should you be seeking further guidance on trade mark or any other intellectual property matters.

[1] Australian Consumer Law ss18, 29(1)(g) and (h)

[2] Brick Lane Brewing Co Pty Ltd v Torquay Beverage Company Pty Ltd [2023] FCA 66.

[3] Paragraph [43]

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Corporate & Commercial
Intellectual Property & Technology
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The roles within your Will and Enduring Power of Attorney – Part 2 (Trustee)

The roles within your Will and Enduring Power of Attorney – Part 2 (Trustee)

Home » Intellectual Property & Technology

The roles within your Will and Enduring Power of Attorney – Part 2 (Trustee)

Author:  Tracy Pratt

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3 min read

15 Feb 2023

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In the second part of this series, we look at the role of the trustee in your Will.

The trustee’s role is to manage the money and assets that your Will provides are to be held in a trust or trusts for your beneficiaries, which may include your children until they reach the age nominated in your Will.

Upon your death, your assets are distributed to the trustee who will hold and control your assets on trust on behalf of your nominated beneficiaries.

Trustees therefore have very important legal duties and responsibilities which include acting in good faith, acting in the beneficiaries’ interests and preserving any property held by the trust.

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As with the role of the executor, the decision as to who you wish to be the trustee of the trusts in your Will, especially for your children, is ultimately a very personal decision for you.  Your trustee should be someone who you trust to act in the best interests of all of the beneficiaries, is usually related to you and is of a suitable age as the trustee role may last for decades.  Preferably, the trustee would be someone who has some commercial or business experience, although this may not be necessary if legal and/or accounting advice is obtained.  While ultimately a matter for you, sometimes it is not a good idea to appoint joint trustees, for example couples, as marriages sometimes fail.  If that happens and you are still alive you would need to redo your Will, if you have died the appointment could be unworkable.

To protect beneficiaries from themselves, sometimes it may also not be appropriate for a surviving spouse or a child to be the sole trustee of their trust, or to be a trustee at all.

In the case of a trustee for your childrens’ trusts, you may wish to give consideration as to whether the trustee should be someone different from the guardian, so that the trustee can offer some oversight on the other person’s actions during what might be a long time (and vice versa).

An alternate trustee should also be considered to ensure there is someone to act if the first trustee cannot act usually by reason of death, incapacity or bankruptcy.

Trustee remuneration may also need to be considered especially if there is to be a great deal of work to be undertaken by the trustee or the trustee is a professional person such a lawyer or accountant.

You can also direct the management of the trusts established within your estate via a Statement of Wishes, which is a non-binding document that gives directions to a trustee about what you wish to happen to the trust property.  For example, you may wish for money to be paid to the trustee to allow your children to visit their grandparents overseas once every five years or to be enrolled in a private school.

These are all very personal decisions and we appreciate there is a lot to get through during the difficult task of administering and distributing an estate. We are professionals who have done this many times, and are happy to assist throughout the entire process to make it as easy as possible.

To discuss an estate plan for your individual circumstances, please contact Tracy Pratt, Lawyer from our Wills, Estates & Trusts team for a free initial consultation on 07 3220 1144 or email.

Areas of Expertise

Wills & Estates
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