In February 2008, the Federal Court of Australia dismissed with costs a claim by the Polo/Lauren Company (Polo/Lauren) for damages, an account of profits and orders to restrain a retailer from importing and selling clothing bearing its polo player logo.

The court held that the retailer was entitled to rely on two defences:

• that the embroidered logo is a “label”, and that therefore the defence under section 44C of the Act (importation of non-infringing accessories to articles) was available; and

• that the embroidered logo falls within the definition of "corresponding design" in section 74 of the Act and that therefore the design/copyright overlap defence in section 77 applied to Polo/Lauren’s claim that, had it embroidered the logos itself, the retailer knew it would have infringed copyright.

The Polo/Lauren Company L.P. v Ziliani Holdings Pty Ltd [2008] FCA 49 (5 February 2008)

On 18 December 2008, the Full Court dismissed Polo/Lauren's appeal of the Federal Court decision.

The Court was satisfied that the logo affixed to the genuine Polo Ralph Lauren garments was a “label” within the definition of “accessory” in

section 10(1) of the Copyright Act and that the defence in section 44C was available.

It was strictly unnecessary to consider the interaction between copyright protection and design protection in this decision. However, the Court

expressed its view of the extensive submissions on this point and concluded that “neither party could win both the label argument and the corresponding design argument because the garments could not logically, at the one time, both ‘embody’ the Logo and be conceptually distinct from it.”

Polo/Lauren Company L.P. v Ziliani Holdings Pty Ltd [2008] FCAFC 195 (18 December 2008)

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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

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In a joint judgment delivered on 6 August 2008, the High Court allowed an appeal relating to government use of surveyors’ plans.

The State of NSW uses survey plans lodged with Land and Property Information (LPI), a government agency, for a variety of purposes, including sale to members of the public and sale via information brokers. Copyright Agency Limited (CAL) had argued, on behalf of the surveyors, that the use of the plans was subject to a remunerated statutory licence, not a free implied licence as the State contended.

The Federal Court had held that the State of NSW’s use of surveyors’ plans was for the services of the State, within the meaning of s 183 of the Copyright Act. But it said that the State had an implied licence to use the plans and was therefore not obliged to pay equitable remuneration as required by s 183. The Federal Court held that the surveyors “must be taken to have licensed and authorised the doing of the very acts that the surveyor was intending should be done as a consequence of the lodgment of the [plans] for registration”.

The High Court held that there was no implied licence relating to the “public” use of the plans, either in the surveyors’ contracts with their clients or independently of these contracts. The Court’s reasons included that there was no necessity to imply such a licence, and that the State charged for copies supplied.

The State of NSW did not appeal the Federal Court’s finding that it did not own copyright in the plans. The Federal Court rejected the State of NSW’s arguments that it owned copyright because the plans were made under its direction or control, and/or the plans were first published by it. The Federal Court held that the plans were first published when they were provided by the surveyors to their clients.

Copyright Agency Limited v State of New South Wales [2008] HCA 35

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In May 2008, the Federal Court found that a truck body manufacturer, Vawdrey Australia Pty Ltd (Vawdrey), infringed copyright by indirectly copying the “load constraint system” drawings of Krueger Transport Equipment Pty Ltd (Krueger). The parties found to have authorised the infringement, and disclosed information in breach of confidence, subsequently settled the claims by Krueger.

The Court has considered the question of monetary relief claimed from Vawdrey. Vawdrey was precluded from relying on an innocent infringement defence because the company failed to make reasonable inquiries to identify the source of its instructions and was aware of Kreuger’s concerns about infringements.

The Court concluded that the claim concerned a “single course of infringement” (Vawdrey’s drawings and trailer manufacture) and therefore it was inappropriate to apportion damages between the defendants, however, it was appropriate to deduct the settlement amount received.

Based on the component approach to calculating loss to Krueger, the Court concluded that Vawdrey should be ordered to pay $346,449.59 in damages. Damages for secondary loss, caused by Vawdrey’s advertising and first-entrant advantage, were estimated at $10,000. The Court could not find that the costs claimed for mitigating the infringement were foreseeable or caused by Vawdrey. The Court considered that an appropriate award of additional damages was $30,000. Costs are to be awarded as a percentage of Krueger’s overall costs.

More:

Krueger Transport Equipment Pty Ltd v Glen Cameron Storage & Distribution Pty Ltd (No 2) [2008] FCA 1493 (9 October 2008)

On 28 October 2008, the Federal Court ordered Vawdrey Australia Pty Ltd (Vawdrey) to pay damages of $438,904.60.

The Court observed that this amount, agreed between the parties, is approximately $100,000 more than the amount that the Court had earlier concluded should be awarded against Vaudrey for infringing copyright in the drawings of Krueger Transport Equipment Pty Ltd.

Costs were also awarded against Vawdrey.

More:

Krueger Transport Equipment Pty Ltd v Glen Cameron Storage & Distribution Pty Ltd (No 3) [2008] FCA 1592 (28 October 2008)

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On 30 July 2008, Sundberg J in the Federal Court ordered that proceedings concerning a dispute over copyright ownership in the film “The Secret” be stayed until the outcome of proceedings concerning ownership, infringement and damages in the US District Court.

The Court denied an application by TS Production LLC ("TS Production”) for a motion to restrain Drew Pictures Pty Ltd from pursuing action in Illinois while the Australian proceeding is on foot.

The US, where the film was first published and substantially exploited, was considered the most appropriate jurisdiction for Drew Pictures Pty Ltd to issue proceedings. The Australian proceedings were described as “vexatious and oppressive.”

More:

• TS Production LLC v Drew Pictures Pty Ltd [2008] FCA 1110 (30 July 2008)

• * TS Production LLC v Drew Pictures Pty Ltd [2008] FCA 1329 (27 August 2008): court order that application for leave to appeal Sundberg J's decision be heard by Full Court rather than single judge

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On 2 July 2008, the Federal Court found that Rockerfeller Management Corporation and its director infringed copyright by using 800 of the applicants’ examination questions and answers in admission test preparation materials. The Court also found the respondents liable for conversion of the infringing copies.

The respondents, who allegedly purchased the material from a third party, on CDs bearing the copyright notice of the applicants’ competing business, failed to convince the Court that the material, some of which was created from third party sources, lacked originality for copyright protection or that its infringement was innocent.

Cross claims for infringement of 160 questions and answers on the CDs, defamation, passing off and trade practices contraventions were dismissed.

The Court is still to consider submissions on damages, including additional and conversion damages, and costs.

Boyapati v Rockefeller Management Corporation [2008] FCA 995 (2 July 2008)

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