Boyapati v Rockefeller Management Corporation

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FEDERAL COURT OF AUSTRALIA

Boyapati v Rockefeller Management Corporation [2008] FCA 995

COPYRIGHT – copyright in practice exams and answers – infringement – originality – additional relief for conversion of infringing copy – additional damages – whether innocent infringement – ss 115 and 116 Copyright Act 1968 (Cth)

BANKRUPTCY – whether assignment of copyright effective – vesting of property in trustee in bankruptcy

TRADE PRACTICES – sponsorship and use of logos – whether passing off – whether misleading and deceptive conduct and representations – whether knowingly concerned in or party to contravention – ss 52, 53 and 75B of Trade Practices Act 1974 (Cth)

TRADE MARKS – whether likely to deceive or cause confusion – whether trade mark to be revoked

DEFAMATION – whether publications defamatory – truth – qualified privilege

Trade Practices Act 1974 (Cth), ss 52, 53, 75B
Corporations Act 2001 (Cth)
Copyright Act 1968 (Cth) ss 8, 10, 14(1b), 32, 36, 38, 115, 116, 196(1)
Trade Marks Act 1995 (Cth) ss 41, 60, 88
Bankruptcy Act 1966 (Cth) 5, 58(1)(a), 116, 149(4), 153, 153A, 153B
Bankruptcy Regulations 1966 (Cth)
Civil Law (Wrongs) Act 2002 (ACT)
Civil Law (Wrongs) Amendment Act 2006 (ACT)
Defamation Act 1974 (NSW) s 8A, s 22(1)
Defamation Act 1957 (Tas) s 16
Defamation Act 1889 (Qld) s 16

Stevens v Kabushiki Kaisha Sony Computer Entertainment (2005) 224 CLR 193 referred to
Victoria Park Racing and Recreation Grounds Co Ltd v Taylor (1937) 58 CLR 479 referred to
Desktop Marketing Systems Pty Ltd v Telstra Corporation Ltd (2002) 119 FCR 491 referred to
Acohs Pty Ltd v RA Bashford Consulting Pty Ltd (1997) 37 IPR 542 cited
Interlego AG v Tyco Industries Inc [1989] AC 217 cited
Desktop and Autodesk Inc v Dyason (1992) 173 CLR 330 cited
Ladbroke (Football) Ltd v William Hill (Football) Ltd [1964] 1 WLR 273 cited
A-One Accessory Imports Pty Ltd v Off Road Imports Pty Ltd (1996) 34 IPR 306 cited
Redwood Music Ltd v Chappell & Co Ltd [1982] RPC 109 cited
Warwick Film Productions Ltd v Eisinger [1969] 1 Ch 508 cited
Concrete Pty Ltd v Parramatta Design & Developments Pty Ltd (2006) 229 CLR 577 referred to
Polygram Pty Ltd v Golden Editions Pty Ltd (No 2) (1997) 38 IPR 451 cited
Caxton Publishing Co Ltd v Sutherland Publishing Co Ltd [1939] AC 178 cited
Birdseye v Sheahan (2002) 196 ALR 598 cited
Official Receiver in Bankruptcy v Schultz (1990) 170 CLR 306 referred to
Daemar v Industrial Commission of NSW (No 2) (1990) 99 ALR 789 cited
Gosden v Dixon (1992) 107 ALR 329 cited
Medical Benefits Fund of Australia Ltd v Cassidy (2003) 205 ALR 402 referred to
Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre Ltd (1978) 140 CLR 216 referred to
British Telecommunications PLC v One In A Million Ltd (1998) 42 IPR 289 cited
CSR Ltd v Resource Capital Australia Pty Ltd (2003) 128 FCR 408 cited
Boyapati v Rockefeller Management Corporation [2006] FCA 897 cited
Dow…

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Details
Case
[2008] FCA 995
Decision Date

CaseChat Overview and Summary

The case of Boyapati v Rockefeller Management Corporation involved MedEntry, a company that offers preparation courses for the University Matriculation Admission Test (UMAT), and several respondents, including Australian Medical Entry Preparation Program (AMEPP), National Institute of Education (NIE), and others. The primary dispute concerned allegations of copyright infringement by the respondents, who were accused of using MedEntry's copyrighted material without permission. The trial addressed all matters of liability, except for questions concerning quantum of damages, profits, and expert evidence on certain claims.

The key legal issues before the court were whether the respondents had infringed MedEntry's copyright and, if so, whether this infringement was innocent. MedEntry argued that the respondents had directly infringed their copyright by using their practice exam questions without authorization. The respondents claimed innocence, asserting they had no knowledge of the infringement. The court needed to determine the validity of both the infringement claim and the respondents' defence of innocent infringement.

The court found that MedEntry's claim for copyright infringement was valid. It rejected the respondents' defence of innocent infringement, concluding that they had direct knowledge of the infringement or had reasonable grounds to suspect it. Additionally, the court held that Dallas Gibson had authorized the infringing conduct, making Rockefeller Management Corporation jointly liable. Consequently, the court ruled in favour of MedEntry and against the respondents on the issue of copyright infringement. The court also decided to invite further submissions from the parties on the possibility of awarding additional damages under s 115(4) of the Copyright Act, based on the flagrancy of the infringement and other relevant factors.

The final orders required MedEntry to file a proposed minute of orders by 1 August 2008, and both parties to submit written arguments by specified dates regarding the application of additional damages and any related costs. This decision sets a precedent for handling similar cases of copyright infringement in the future, emphasizing the importance of due diligence and the consequences of infringing copyrighted material.

Orders

Orders of the court

1. On or before 1 August 2008, the applicants file and serve a proposed minute of orders in conformity with these reasons.

2. On or before 16 July 2008, the applicants/cross-respondents file and serve written submissions as to:

(a) their position with respect to the application of ss 116(1C) and (1D) of the Copyright Act 1968 (Cth);

(b) the considerations that would support an exercise of discretion in favour of an award of additional damages under s 115(4) of the Copyright Act 1968 (Cth); and

(c) any question of costs that they consider should be dealt with at this stage of the proceeding.

3. On or before 30 July 2008, the respondents/cross-claimants file and serve written submissions in response to the submissions of the applicants/cross-respondents.

Background

Background to the litigation

On 10 July 2006, the Court ordered that, save in relation to any questions concerning quantum of damages or account of profits on each party’s copyright claims and save in relation to any expert evidence concerning the quantification of damages arising on the trade practices and passing off claims, the matter was to proceed to trial. At the trial, all matters of liability fell for determination. B. CONTEXTUAL FACTS MedEntry offers preparation courses for the UMAT. The UMAT, which is conducted by the Australian Council for Educational Research on behalf of certain admitting universities, is used by these universities to assist with the selection of students into medicine, dentistry and other health science degree programs at the undergraduate level. The UMAT is conducted annually in late July and is a closed-book, multiple-choice examination. The UMAT is essentially an aptitude test designed to assess critical thinking and problem-solving, interaction skills and abstract non-verbal reasoning. Whilst the questions change from year to year, the exam maintains the same basic structure. The UMAT generally consists of a number of sections designed to test:(a) logical reasoning and problem-solving (section 1 – 44 questions);(b) interaction skills and understanding people (section 2 – 36 questions); and(c) abstract, non-verbal reasoning (section 3 – 30 questions). When the Boyapatis commenced to set up their business in December 2003, various organisations were already selling UMAT preparation or training courses, an important part of which was providing prospective candidates with UMAT-style practice exams and answers. These organisations included the respondents’ business, Australian Medical Entry Preparation Program (“AMEPP”), National Institute of Education (“NIE”), and “Agoneyes”, which was the trading name of a Mr Ryan Schulman. All but Agoneyes provided workshops and tutorials at schools and other locations in Australia and New Zealand. Ray and Ann Boyapati both sat the UMAT to gain admission to Monash University medical school. Ray did so in July 2001 and Ann, in July 2003. In order to prepare for the UMAT, they both took courses offered by these providers, including the respondents. After taking these courses and doing the UMAT, Ray and Ann Boyapati perceived deficiencies in the then providers’ practice exams and determined that they might improve upon them so as to simulate the UMAT more accurately. Ann gave evidence, which I accept, that the respondents’ questions were deficient because many contained an American flavour in their language, grammar and style instead of the Australian style of the UMAT. Furthermore, the respondents’ exams had a five-multiple choice format instead of the four consistently used in the UMAT and, generally, the respondents’ exams did not reflect the structure of the UMAT. As a consequence, in December 2003, Ann and Ray Boyapati decided to prepare their own sample questions and answers to sell to students intending to sit the UMAT in 2004. They did so with the encouragement of their father, Edward. Ray and Ann Boyapati gave evidence that they originally had in mind to operate their business under the name ACE UMAT (as the sixth cross-respondent is called). They registered this as a business name and Ray Boyapati established a website with the domain name “ In December 2003, however, before their business was fully operational, they changed their business name to “MedEntry”, and Ray Boyapati created a new website with the domain name “ following Dallas Gibson’s warning telephone calls to Dr Nimi Boyapati’s practice.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

KENNY J
The respondents challenged the applicants’ dealing with certain evidence, saying in written submissions that it was “suspicious that the applicants appear to have deliberately destroyed potentially relevant evidence and refused to discover it or otherwise make it available”. Generally speaking, the applicants provided adequate explanations for their inability to provide documents formerly held by them. I accept these explanations.(4) Conclusion on the applicants’ infringement claim I reject the respondents’ submission that their use of the applicants’ copyright material was innocent and that they ceased to use it as soon as doubts were raised and communicated to them about its origins. I accept that the applicants’ claim for copyright infringement is made out. I reject the respondents’ innocent infringement defence. I am satisfied that both the respondents directly infringed the applicants’ copyright. I am also satisfied that Dallas Gibson authorised RMC’s infringing conduct within the meaning of s 36 of the Copyright Act. They are jointly liable for the infringement. The onus was on the respondents to make out their innocence infringement defence. For the reasons stated, they have not shown that, at the time of the infringement of the applicants’ copyright, the respondents did not know, and had no reasonable grounds for suspecting, that the acts constituting the infringements were infringements of copyright.(5) Additional damages The applicants sought additional damages pursuant to s 115(4) of the Copyright Act. This subsection provides the following:Where, in an action under this section:(a) an infringement of copyright is established; and(b) the court is satisfied that it is proper to do so, having regard to:(i) the flagrancy of the infringement; and(ia)the need to deter similar infringements of copyright; and(ib)the conduct of the defendant after the act constituting the infringement or, if relevant, after the defendant was informed that the defendant had allegedly infringed the plaintiff’s copyright; and(ii)whether the infringement involved the conversion of a work or other subject-matter from hardcopy or analog form into a digital or other electronic machine-readable form; and(iii)any benefit shown to have accrued to the defendant by reason of the infringement; and(iv) all other relevant matters;the court may, in assessing damages for the infringement, award such additional damages as it considers appropriate in the circumstances. Having made out their copyright infringement claim, the applicants have established an entitlement to relief under s 115(2) of the Copyright Act, the respondents having failed in their innocent infringement defence under s 115(3). I have already found that para (a) of s 115(4) is satisfied, because the applicants have established that the respondents have infringed the works in suit. The respondents have not, however, addressed any submissions on the issue of additional damages under s 115(4). It is possible that they deferred their submissions on this issue because they considered that the Court’s order of 10 July 2006 required the issue, if it arose, to be dealt with at a later stage of the proceeding. Accordingly, I propose to invite the parties to make submissions on the question whether or not the court should be satisfied that it is proper to award additional damages for the infringement. D. THE RESPONDENT’S CROSS-CLAIM FOR COPYRIGHT INFRINGEMENT

Ratio Decidendi

Legal Principle Established

Established by: KENNY J

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