In this case, the Federal Court made a declaration that the applicant, Racing & Wagering Western Australia (RWWA), was not breaching its software licence agreement with Software AG (Australia) Pty Ltd (SAG) by copying and testing mainframe computer system software at a disaster recovery site maintained by a third party. It also declared that RWWA was entitled to test the disaster recovery copy under section 47F of the Copyright Act, which allows the reproduction of computer programs for security testing.

The court was also of the view that the copying was covered by s47C, which allows back-up copies of computer programs.

The court dismissed SAG’s cross-claim and made a declaration that SAG is not entitled to additional licence fees or upgrade maintenance service fees under the licence. Even if RWWA had breached its licence agreement, SAG had not properly proven its loss.

Racing & Wagering Western Australia v Software AG (Australia) Pty Ltd [2008] FCA 1332 (29 August 2008)

The Federal Court has ordered Software AG (Australia) Pty Ltd (SAG) to pay the costs of Racing & Wagering Western Australia (RWWA) following the Court’s declaration on 29 August 2008 that RWWA’s use of SAG’s mainframe computer software did not infringe copyright.

The Court commented that the RWWA acted imprudently in rejecting an offer of $300,000 made by SAG before RWWA incurred substantial costs and made exaggerated counterclaims.

SAG is to pay RWWA’s costs (excluding lawyers’ fees) incurred until 11 May 2007 plus all costs and disbursements that were not unreasonably incurred after that date.

Racing & Wagering Western Australia v Software AG (Australia) Pty Ltd No 2 [2008] FCA 1526