Steam to vent from July 28

Published On 21/07/2015 | By Patrick Gunning | Consumer protection

The test case on the application of Australian Consumer Law guarantees to cross-border supplies of goods and services is on track to be heard by the Federal Court of Australia in about one week from the date of writing.

The Court resolved a procedural issue in favour of the ACCC in a decision made on July 16, 2015 – see here. Valve Corporation wanted the Court to have evidence before it that the contracts in dispute were consistent with the laws of the State of Washington. The Court accepted the ACCC’s submission that the issue of whether the contracts complied with the laws of the State of Washington was irrelevant to the matters in dispute. In the words of Justice Edelman:

“There will be numerous issues of law raised in this trial without distraction concerning further, potentially irrelevant, additional questions involving expert evidence about foreign law”

The Court’s reasons for decision in this procedural dispute describes Valve’s defences to the ACCC’s claim (see par [8]). These include the argument identified as critical in our post published in September 2014 at the outset of these proceedings (see here), namely that if the proper law of the contracts is not the law of an Australian jurisdiction, then the ACL consumer guarantees do not apply to supplies of goods or services made under those contracts. The more speculative argument is that Valve did not supply “goods” (which is defined by the ACL so as to include computer software) but rather supplied “online access to video games via a subscription service” (which is a “service” for ACL purposes). If that was correct, the same reasoning would presumably apply to the provision of any cloud-based software-as-a-service. Given that it is tolerably clear that one of the legislative purposes of deeming computer software to be a “good” rather than a “service” was to overcome the result of decisions such as Gammasonics and St Albans, which had held that the supply of an intangible copy of software constituted a supply of services for the purposes of sale of goods legislation, this second argument will, in my view, be more difficult for Valve to make out.

The case appears to have been re-allocated by the Federal Court from Justice Jagot to Justice Edelman, who was appointed to the bench of the Federal Court in April 2015, having formerly served as a Justice of the Supreme Court of Western Australia.

Picture credit: Wikimedia Commons


About The Author

advises on a wide range of commercial and corporate transactions, with an emphasis on transactions involving material technology or IP. He has particular expertise in the gaming and health sectors and counsels clients on regulatory issues relevant to those sectors. Patrick’s practice extends over the full life cycle of projects, and includes assisting clients to resolve disputes.

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