Allam v Aristocrat Technologies Australia Pty Ltd

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FEDERAL COURT OF AUSTRALIA

Allam v Aristocrat Technologies Australia Pty Ltd [2012] FCAFC 34

Citation: Allam v Aristocrat Technologies Australia Pty Ltd [2012] FCAFC 34
Appeal from: Aristocrat Technologies Australia Pty Ltd v Global Gaming Supplies Pty Ltd [2009] FCA 1495
Parties:

RIAD ALLAM v ARISTOCRAT TECHNOLOGIES AUSTRALIA PTY LTD (ACN 001 660 715), ARISTOCRAT INTERNATIONAL PTY LIMITED (ACN 000 148 158), ARISTOCRAT TECHNOLOGIES INC, GLOBAL GAMING SUPPLIES PTY LTD (ACN 008 548 589), ANTHONY EDWARD ANDREWS, IMPACT GAMING PTY LTD (ACN 109 299 461) and FRANCIS GEORGE BERNARD CRAGEN

GLOBAL GAMING SUPPLIES PTY LTD (ACN 008 548 589), ANTHONY EDWARD ANDREWS, IMPACT GAMING PTY LTD (ACN 109 299 461) and FRANCIS GEORGE BERNARD CRAGEN v ARISTOCRAT TECHNOLOGIES AUSTRALIA PTY LTD (ACN 001 660 715), ARISTOCRAT INTERNATIONAL PTY LIMITED (ACN 000 148 158) and ARISTOCRAT TECHNOLOGIES INC
File numbers: NSD 292 of 2010
NSD 293 of 2010
Judges: BENNETT, MIDDLETON AND YATES JJ
Date of judgment: 21 March 2012
Catchwords:

COPYRIGHT – infringement – gaming machine games and components – circumstantial evidence – whether infringement by dealing established

EVIDENCE – whether primary judge erred by varying rulings made under s 136 of the Evidence Act 1995 (Cth) at the time of final submissions when the course of evidence had been completed

EVIDENCE – whether primary judge erred in the use of evidence not tendered as proof of facts stated in them or as tendency evidence – where evidence not relevant except as to credit or the existence of a joint venture

DAMAGES – whether liability for compensatory damages established on the evidence

DAMAGES – additional damages – whether the amount of additional damages was excessive

DAMAGES – whether damages should have been awarded in favour of all applicants – where agreement licensing relevant copyright in favour of certain applicants executed after time of infringements and commencement of proceedings

Legislation: Copyright Act 1968 (Cth) ss 36, 38, 60, 95, 106, 115(2), 115(4), Pt 3.6
Evidence Act 1995 (Cth) ss 135, 136
Cases cited: Aristocrat Technologies Australia Pty Ltd v DAP Services (Kempsey) Pty Ltd (2007) 157 FCR 564
Autodesk Inc v Yee (1996) 68 FCR 391
Bailey v Namol Pty Limited (1994) 53 FCR 102
Beneficial Finance Corporation Ltd v Karavas (1991) 23 NSWLR 256
BMG Poseidon Corp Pty Ltd v Adelaide Bank Ltd [2009] FCA 389
Briginshaw v Briginshaw (1938) 60 CLR 336
Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Australian Competition and Consumer Commission (2007) 162 FCR 466
Daniel v State of Western Australia (2004) 138 FCR 254
Enzed Holdings Ltd v Wynthea Pty Ltd (1984) 57 ALR 167
Fox v Percy (2003) 214 CLR 118
Gambro Pty Limited v Fresenius Medical Care Australia Pty Limited [2004] FCA 1025
Neat Holdings Pty Limited v Karajan Holdings Pty Ltd (1992) 110 ALR 449
Nguyen v Cosmopolitan Homes [2008] NSWCA 246
Paramount Pictures Corporation v Hasluck (2006) 70 IPR 293
Prior v Lansdowne Press Pty Ltd [1977] VR 65
Qantas Airways Ltd v Gama
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Details
Case
[2012] FCAFC 34
Decision Date

CaseChat Overview and Summary

In Allam v Aristocrat Technologies Australia Pty Ltd, the respondents alleged that the applicants had infringed their copyright by creating, using, and selling gaming machines that incorporated the respondents’ software. The dispute was heard in the Federal Court of Australia. The legal issues before the court included whether the primary judge erred in varying earlier evidentiary rulings, whether the evidence was admissible, and the quantum of damages. The court also needed to determine whether additional damages were appropriate and whether the award should apply to all respondents.

The court found that the primary judge did not err in varying evidentiary rulings, as the circumstances of the case had changed since the initial rulings were made. Regarding the admissibility of evidence, the court held that the primary judge did not err in using evidence that was not tendered as proof of facts stated in them or as tendency evidence, as it was relevant to the credit of the witness or the existence of a joint venture. The court also found that the primary judge did not err in concluding that the applicants were liable for compensatory damages. However, the court held that the amount of additional damages awarded was excessive and reduced the amount. Finally, the court found that damages should not have been awarded in favour of all respondents, as the agreement licensing the relevant copyright in favour of certain respondents was executed after the time of the infringements and the commencement of proceedings.

The final orders of the court required the parties to file agreed draft orders within seven days, including as to costs, or, if agreement could not be reached, to file and serve proposed orders and written submissions in support thereof. Entry of orders was to be dealt with in accordance with Rule 39.32 of the Federal Court Rules 2011.

Orders

Orders of the court

1. Within seven days the parties are to file agreed draft orders (including as to costs) giving effect to these reasons or, if agreement cannot be reached, file and serve proposed orders and written submissions in support thereof.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

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Evidence

Evidence Before The Court

It is convenient at this juncture to identify a number of the key elements of the physical evidence and the primary judge’s findings in relation to that evidence.Mr Channa’s evidence As noted, in the period from about February to December 2006, Mr Channa was employed by Tonita or Mr Allam as an assistant at the Botany premises. He gave evidence of his observations at those premises.The primary judge noted that, if accepted, Mr Channa’s evidence was direct evidence of copyright infringement by the Allam parties. Mr Channa’s observations included the following: ·He saw “chips” being fitted into a device which Mr Allam told him was used to “load and unload” programs. He saw Mr Allam using the device in this way approximately five times a month. He also saw Mr Allam placing stickers on the “chips”. Mr Allam would give Mr Channa stickers with numbers on them and Mr Channa would match the numbers on the stickers to a number in a book. The primary judge found the effect of this evidence to be that Mr Channa saw Mr Allam burning or copying EPROMs using an EPROM burning device, and placing EPROM labels on EPROMs using numbers that Mr Channa matched with numbers in a book apparently kept by Mr Allam.·Mr Allam told Mr Channa to hide compliance plates which were “illegal” or “prohibited”. Mr Channa said that he hid the plates in various locations, including in the ceiling and in drawers. He also gave evidence that he buried them in a plastic bag in the backyard of the workshop, although he later denied doing so. Some of the plates had printing on them, others were blank. He observed Mr Allam or one of Mr Allam’s other employees printing on them.·He observed a man give a CD-ROM (Exhibit CCC-14) to Mr Allam which Mr Allam subsequently gave to Mr Channa. It had the word “Riad” written in handwriting on it (that is, Mr Allam’s given name). Mr Channa denied that he had written Mr Allam’s name on the CD-ROM. The primary judge found that this evidence was consistent with other evidence in the case, particularly aspects of the email correspondence relating to the supply of gaming machines to the Latin American market, concerning offers to make compliance plates with false numbers. Other emails had suggested that Mr Allam had burned Aristocrat games onto blank EPROMs. However, the primary judge also found that there was a degree of exaggeration in Mr Channa’s evidence on some important matters of detail, as well as a reluctance to make concessions which he thought might be against the Aristocrat parties’ interests. The primary judge also noted that there was “no love lost” between Mr Allam and Mr Channa. Mr Channa had lost money in dealings with Mr Allam. The primary judge found that it was impossible to say to what extent Mr Channa was motivated by revenge against Mr Allam. The primary judge noted a number of inconsistencies in Mr Channa’s evidence which adversely affected the reliability of that evidence generally.

Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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