Admar Computers Pty Ltd v Ezy Systems Pty Ltd - [1997] FCA 853

FEDERAL COURT OF AUSTRALIA

EVIDENCE - admissibility on grounds of relevance - computer software - allegation of copyright infringement in relation to source code - allegation of mis-use of confidential information - whether expert evidence utilising a pseudocode analysis of the relevant software is admissible in relation to either allegation.

INTELLECTUAL PROPERTY - Copyright - computer software - allegation of copyright infringement in relation to source code - admissibility of expert evidence utilising a pseudocode analysis of the relevant software - whether pseudocode analysis is a means by which one may determine whether one source code is a substantial reproduction, publication or adaptation of another source code.

Copyright Act 1968 (Cth) s 10(1)(a), s 29(1)(a), s 31(1)(a), s 36

Evidence Act 1995 (Cth) s 55

Copyright, Designs and Patents Act 1988 (UK)

Powerflex Services Pty Ltd v Data Access Corporation (1997) 37 IPR 436
Autodesk Inc v Dyason (1992) 173 CLR 331
Autodesk Inc v Dyason (No 2) (1993) 176 CLR 300
Ibcos Computers Ltd v Barclays Mercantile Highland Finance Ltd (1994) 29 IPR 25

ADMAR COMPUTERS PTY LTD v EZY SYSTEMS PTY LTD & ORS
No VG 90 of 1995

GOLDBERG J
MELBOURNE
29 AUGUST 1997

IN THE FEDERAL COURT OF AUSTRALIA )

)

VICTORIA DISTRICT REGISTRY ) No VG 90 of 1995

)

GENERAL DIVISION )

BETWEEN:
ADMAR COMPUTERS PTY LTD
(ACN 006 212 068)
Applicant

AND:
EZY SYSTEMS PTY LTD
(ACN 060 028 284)
First Respondent

EASYCOMP PTY LTD
(ACN 007 376 141)
Second Respondent

NICHOLAS THOMAS CUGURA
Third Respondent

PETER ELLIS
Fourth Respondent

JUDGE: GOLDBERG J

PLACE: MELBOURNE

DATE: 29 AUGUST 1997

RULING

I have been asked to rule on the admissibility of the evidence the applicant seeks to lead from Professor Robert John Willis and Dr Chung-Hsing Yeh in relation to the carrying out, and the results, of their investigation of the two software systems in issue in this proceeding which investigation can be described generally as a pseudocode analysis. The case has been opened by counsel for the applicant and at the conclusion of the opening counsel for the respondents submitted that I should rule on the admissibility of such evidence. Counsel for the applicant submitted that I should defer the making of a ruling until the conclusion of the trial but having regard to the impact which the ruling may have on the future conduct of the trial particularly in relation to cross‑examination I consider it desirable to do so at this early stage.

The applicant seeks declaratory and injunctive relief and claims damages in relation to the software comprised in a series of computer programs known collectively as the Admar Winery System (“the Admar system”) which is designed for use in the wine industry. The applicant claims to be the owner of the copyright subsisting in those programs which include the source code and object code of the programs. The relevant version of the Admar system relied upon in the proceedings is the February 1993 version.

The fourth respondent was employed by…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Admar Computers Pty Ltd v Ezy Systems Pty Ltd

Details

AGLC: Admar Computers Pty Ltd v Ezy Systems Pty Ltd [1997] FCA 853
Case: [1997] FCA 853
Decision Date: 29 AUGUST 1997

CaseChat Overview and Summary

The case of Admar Computers Pty Ltd v Ezy Systems Pty Ltd involved a dispute over the alleged infringement of copyright and misuse of confidential information in the development of a wine industry software system. Admar Computers, the applicant, claimed that Ezy Systems and its associated respondents had used its confidential information and infringed its copyright in the Admar Winery System by developing the Ezy Wine Management System. The Federal Court of Australia was tasked with determining the admissibility of expert evidence from Professor Robert John Willis and Dr Chung-Hsing Yeh, who had conducted a pseudocode analysis of the two software systems. The court had to decide whether this evidence was relevant to the allegations of copyright infringement and misuse of confidential information.

The court ruled that the pseudocode analysis conducted by Professor Willis and Dr Yeh was not admissible in relation to the copyright infringement claim. The court held that copyright protection is afforded to the expression of a set of instructions in a computer program, not to the function or underlying logic of the program. The pseudocode analysis, which focused on the program logic and structure, did not demonstrate a substantial reproduction, publication, or adaptation of the Admar source code in the sense required by the Copyright Act. Therefore, it could not rationally affect the assessment of the probability of copyright infringement.

However, the court found that the pseudocode analysis was relevant to the claim of misuse of confidential information. The analysis showed that the Ezy system used similar program logic and design as the Admar system, which could indicate that the respondents had used the Admar source code in developing the Ezy system. This evidence was pertinent to determining whether the respondents breached their obligations of confidence by using the applicant’s confidential information.

In conclusion, the court ruled that the pseudocode analysis evidence was inadmissible on the issue of copyright infringement but was admissible in relation to the breach of confidence and misuse of confidential information claims. The decision highlighted the importance of distinguishing between the expression of a computer program, which is protected by copyright, and the underlying program logic, which is not.

Orders