Autodesk Australia Pty Ltd v Cheung, C

[1989] FCA 575

i

l . :
E':
1:
:'
l .
;.

-- 3UJ33AENT No. .52.5%.82; L.' t 1 :

IN THE FEDERAL COURT OF AUSTRALIA	)	I-
l .
1

NEW SOUTH WALES DISTRICT REGISTRY	)	No. G566 of 1987	1 .>
, ~~
)	I

GENERAL DIVISION 1

I:.

; 1 :

BETWEEN:	AUTODESK AUSTRALIA	i
PTY. LTD., AND
AUTODESK INC.	L>:
Applicants	1%:
L  : 1

AND :	CHARLES CHEUNG	l '
Respondent-	l  -
, .:
, ,
I

_. l.

CO-:  M. L. FOSTER, J

.

1 ,~:  ,

DATE: 16 AUGUST 1989

I ;

PLACE: SYDNEY	; .
I , :i'
I

REASONS FOR JUDGHENT	I
b ,
(EXTEMPORE)	l?
r .
1 . ;
L :
t-'

HIS HONOUR: In these proceedings the applicants, by notice of	m
v-.
L *
motion dated 27 July 1989, seek orders that the respondent	I
i
; -:
provide answers to interrogatories as delivered by the applicants	!I
f.;
by notice dated 1 July 1988. The interrogatories in question are	l .
1
20 in number. The respondent has objected to answering each of	I. :
them on the grounds of privilege against self-incrimination.
l
i
!'
r
i
The second named applicant is a company incorporated under the laws of the State of California in the United States of	;
1.
I
$ -
I-
, ,
America and is the owner of copyright in computer programmes	1 : .
:. I '
known as Autocad and documents to be used with the programme.	;.. I,
[_ ~
l
I !
1 <
. -,
!
, .
I'
. .
1.1
11:
i .

1'.

The first named applicant is the sole and exclusive distributor appointed by the second named applicant to import, market and distribute the Autocad programmes and associated documentation in Australia.

The statement of claim asserts, inter alia, infringement by thg respondent of the second named applicants copyright by (a) distributing for the purposes of trade the Autocad programme and documentation or a substantial part thereof; (b) reproducing in a materlal form the Autocad programme and documentation or a substantial part thereof; (c) selling or by way of trade offering or exposing for sale the Autocad programme and documentation or a substantial part thereof. The particulars supplied read as

follows :  -

"The second named applicant is unable at present to give full particulars of the precise numbers and dates of all of the infringements of its copyright in the Autocad programme and documentation by the respondent but will claim at the trial of this action full compensation and relief in respect of all such infrlngements."

Paragraph 6 reads:-

" ~ t the time of the aforesaid infringements the respondent knew or ought to have known of the

Paragraph 8 makes similar claims for infringement of the first named applicant's exclusive rlght to import, market, distribute and sell in Australia the programme and documentation. applicant." existence of the copyright of the second named

By his defence the respondent makes certain admissions. By

paragraph 5 of the statement of claim that:-

" a).

He distributed for the purposes of trade the

Autocad programme to Mr Quigley on or about 16
October 1987.

b). That he reproduced in a material form the Autocad programme for the purposes of supplying the same to Mr Quigley on or about 16 October 1987 and In the course of his personally perusing the programme but save as aforesaid denied the paragraph."

BY paragraph 3 of the defence the respondent admitted

paragraph 6 of the statement of claim. Admissions of a slrnilar
nature were made in respect of paragraph 8.

It appears that interlocutory injunctions have been granted by Burchett J on 9 November 1987 and an Anton Pillar order also made, which order has been executed. In the course of the execution of the order it appears that certain documents were obtained from the respondent some of which have been made the subject of the interrogatories which are the subject of this notice of motion.

The affidavit of J.A. Quigley dated 9 November 1987
provides certain essential background material. It appears from

that affidavit that an operation described as a "bait sale"

others for the purpose of obtaining information and evidence if	operation took place in October 1987 when Mr Quigley and the
possible as to suspected infringements in relation to the Autocad copyright and exclusive distribution rights in Australia of the first named applicant.

Mr Quigley glves evidence in the affidavit of the

i 1,

respondent demonstrating a certain computer to him.	He says that
in relation to the demonstration the respondent said to him	1;
"Computers are like motor cars; they are no good without the	I..
I .

petrol.	I've got all the petrol in the form of software and can	I i
p .

let you have it as a gift".	L-a
I _,
t
I3
Hr Quigley said that at or about this time he noticed a number of computer floppy discs in the premises near to the	v- / i
t:

computer machine which were all apparently hand labelled.	In the	l
I I,

course of the respondents demonstrating to him the operation of	1
I.
another computer machlne Mr Quigley raised the question of the	i :
I
I

provision of software.	The respondent is alleged to have said to	I .'
I
him: -	1.
I
t ..:

"The computer is no good without the programmes.	I	I
can give you whatever programmes you wish.	They	I.,

are pirated programmes and it is illegal. As long	I ,.
as you keep qulet about it I can let you have	i .:
whatever you want as a gift if you buy the	1 :
hardware."	i .
1 . >.
p- -

Mr Qulgley indicates that in the course of further conversations various programmes were produced to him including	L
I .
I _ '
! I ,.
; .;
the Autocad programme the subject of this litigation. On a	L
i '

l:.

subsequent occasion, again on the pretext of interest in buying	L. C
the hardware, the computer machines themselves, Mr Qulgley and	!.
the two gentlemen who accompanied hlm asked questions and	m : I .'
, .
, .
8 .
received answers in relation to computer software.	! ' >
; I :
l '
i

It is alleged that the respondent again indicated that	, ,
. .
:  1

the software was illegal.	He said:-	F .
I
1:
I _
t :
I
. .
. L
...
. .
, > # .
# ,
l:

5   t -

l ..

"It is all pirated software and whatever manuals I	i ~
qive you are produced in Taiwan and Hong Kong, and	, . I.
it is all very illegal. You must remember that the	,
people that make these programmes spend a lot of
time and money in producing them, and this software	i : ,
1s plrated. You must not tell anybody it came from	t
me. On that basis I can supply you with whatever
programme you wlsh, and if I do not have the	1:.
I
programme I will be able to get it from one of my
friends, and I will supply it to you free as a gift	i ' .
but only if you buy my hardware."	1 .~
I-!
i ':
I <

Mr Qulgley further deposes to the fact that during this meeting he noticed in the premises a number of discs of well	I.
[
1
t
known programmes other than the Autocad programme. Accordingly
i '
the material set out in this affidavit provides strong prima	1: i
i '
facie evidence of infringement of copyright, not only in the
copyright in question in the litigation but also in respect of	l::
potential infringements of copyright relating to other brands of	l.,
software. It also provides considerable evidence as to relevant guilty knowledge on the part of the respondent.	I,:
1;
1:
l
C
The interrogatories administered and the answers to them are set out in annexure JRS2 to the affidavit of Jullan Ronald	!
i . L:
I

Stevens sworn 28 July 1989 and read in these proceedings.	The	1.
!.
.--
, ,

objections to answering on the ground of privilege against	I -!
, .. I:

self-incrimination relate for the most part to the provisions of	I
. ,

s 132(1) to (2A) and (SA) of the Copyright Act 1968 which create	i I .
F'
a varlety of offences in relation to infringements and to S 133	P-- r
i-
which provides penalties for these offences.	!
!t
. . [-. i I I
Objection is also taken on the basis of possible prosecution for offences in relation to the revenue laws, the	L 1 .
I.
! .:
b .
sections relied upon being S 262A of the Income Tax Assessment	[. -
I..
!.
Act and S 8L of the Taxation Administration Act 1953, both being sections requiring the keeping of appropriate business records.
In answer to these objections counsel for the applicants says in the flrst instance that in any event certaln questions would be in themselves innocuous and should be answered, even if other questions are properly the subject of the claim for privilege. I find it unnecessary to consider this aspect of the case in any detail. Examination of the questions asked in my view glves a clear indication that each one, when viewed in the context of the whole of the questions and also against the background materlal to which I have been .referred, could be productive of an answer which could be a step or link in a chain leading to a successful prosecution of the respondent under one or more of the sections referred to. (Rio Zinc Corporation and Others v. Westlnghouse Electric Corporation, (1978) AC 547 at 647; Korp v. Egg Pulp Marketing Board, (1964) VR 563 at 570).
Counsel for the applicants also relies on the doctrine of waiver as requiring the answering of the interrogatories at least in part. His submission, as I understand it, is that the
may found a requirement that the respondent answer questions admissions made in the defence to which reference has been made
which are deslgned further to elucidate the admissions so made.
I conslder that I must reject this submission because (1) I do
not accept that it is based on sound doctrine. It is clear that particulars cannot be ordered of a mere admission (Bullen and Leake, 3rd Edltlon, page 115). It would be a fortiori in my view
in the case of interrogatorles.	( 2 1 , even if it were soundly

based, the admissions made are quite precise and do not in my view admlt of further elucldatlon in the way sought in these interrogatories. ( 3 ) , it would not be possible or permissible in a realistic way to require the respondent to read down the interrogatorles as relating only to matters speclflcally related to the bait sale Incident the sublect of the admissions, for the purpose of making answers llmlted to such matters only.

I have also considered, although I do not understand the matter to have been speclflcally raised, whether I should overrule the oblections on the basls that they relate only to potential prosecutions for trivial or petty offences, and should not be allowed to stand in the way of the applicants proceeding to enforce thelr clvll rights under the legislation. In Rank Film Distributors v. Video Information Centre, (1982) AC 380, the House of Lords held that equivalent sectlons of the Copyright Act 1956 (Imperial) could not found a claim for privilege as they only Involved a possible liability for petty offences.

Lord Fraser of Tullybelton at 445 described the offences created by S 21 of the Copyright Act 1956 as being:-

". .. only ancillary remedles for breach of copyright

. . . and they are treated as comparatively trivial

wlth a maximum penalty of 50 francs. It would, in my oplnion, be unreasonable to allow the possibility of Incrimination of such offences to obstruct disclosure of information which would be of much more value to the owners of the infringed copyright than any protection they obtain from section 21."

This decision was considered by Wilcox 3 in Warman International Limited and Others v. Envirotech Australia Pty. Limited, (1986) 11 FCR 478 in relation to the equivalent provlslons of the Copyright Act 1968. His Honour decided that, at first instance, he should apply the traditional rule providing for prlvllege against self-incrimination "in its full rlgour", leaving it to the appellate courts to determine in Australia whether an exception should be made in respect of petty or trivial offences.

I consider that I should as a matter of comity follow this decision. Moreover I am far from satisfied that the offences created by S 132 of the - Act can properly be regarded as petty or trivial only. S 133 provides quite substantial penalties, particularly where there are a number of infringing artlcles involved. The questions asked if answered could well bring into existence materlal pointing to multiple infringements attracting high monetary penalties.

For these reasons I consider that I must uphold the
ground of privilege claimed. In those circumstances I must

refuse the orders sought in the notice of motion. I accordingly

do so, and I order that the applicants pay the respondent's

costs.

1 :

/ /

I certify that this and the preceding 8	I.
I .
pages are a true copy of the reasons for
judgment herein of his Honour Mr Justice	!
Foster.	1 L:

Dated:  16 August 1989 c I I .j

Associate: T& W-

A P P E A R A N C E S

APPLICANT:	Brendan Welsh of Abbott Tout Russell Kennedy
RESPONDENT:	Paul Wells of Paul wells and CO

HEARING DATE: 16 August, 1989

DATE OF JUDGMENT: 16 August, 1989