Burge & Ors v Swarbrick

[2006] HCATrans 415

[2006] HCATrans 415

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Perth  No P2 of 2006

B e t w e e n -

BRENT BURGE

First Applicant

TREVOR ROGERS

Second Applicant

BENJAMIN WARREN

Third Applicant

BOLD GOLD INVESTMENTS PTY LTD

Fourth Applicant

GLEN PETER BOSMAN

Fifth Applicant

SERGIO EDWARD ZAZA

Sixth Applicant

and

JOHN HARLEY SWARBRICK

Respondent

Application for special leave to appeal

GLEESON CJ
CRENNAN J

TRANSCRIPT OF PROCEEDINGS

FROM PERTH BY VIDEO LINK TO CANBERRA

ON FRIDAY, 4 AUGUST 2006, AT 12.43 PM

Copyright in the High Court of Australia

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MR J.J.J. GARNSEY, QC:   May it please the Court, I appear with MR R.J.L. McCORMACK for the applicants.  (instructed by Stables Scott)

MR D.M. STONE:   May it please the Court, I appear with my learned friend, MR T.J. CARMADY, for the respondent.  (instructed by Williams & Hughes)

GLEESON CJ:   Yes, Mr Garnsey.

MR GARNSEY:   Your Honours, this case involves copyright claims in relation to a small racing yacht intended to be reproduced and in fact reproduced in industrial quantities.  The decision of the Full Court involved claims by the respondent for infringement of copyright in relation to the following four matters:  first, a plug which was a three‑dimensional construction in wood for the hull and deck of the yacht; secondly, moulds which were a mirror image of the plug formed on the plug and taken apart; thirdly, mouldings which are the products of the moulds and are a mirror image of the moulds but reproduce the plug; and fourthly the complete yacht with mast and keel and other accoutrements.  There was also a claim for infringement of copyright in drawings, which is not material to any application for special leave to appeal to this Court.

The Full Court upheld the decision of the trial judge in part only and allowed the appeal in part.  The Full Court only upheld the appeal in respect of the finding and holding of copyright and infringement of copyright in relation to the hull and deck mouldings.  That is the third item that I indicated in the list of four.  It did not uphold copyright and find infringement of copyright in respect of the plug, the moulds or the complete yacht.

As the case ended up before the Federal Court, the court was asked to determine whether copyright subsisted in the plug, the mouldings – that is the third of the matters – and the complete yacht.  The moulds fell by the wayside.  However, the court in its judgment did appear to treat the moulds as there for the subject of its decision.

The Full Court upheld the trial judge’s findings and holdings that the hull and deck mouldings were works of artistic craftsmanship, relying on their coming within the phrase “work of artistic craftsmanship” in parentheses in section 77(1) of the Copyright Act which deals with the circumstances when a work which is registrable under the Designs Act and has not been registered is deprived of copyright in respect of the industrial application of a corresponding design to an article.

When analysed, the Full Court’s decision is internally inconsistent, contrary to the authorities and, we respectfully submit, manifestly wrong in respect of the construction and application of section 77 of the Copyright Act.  That is in part because the court failed to analyse the authorities and enunciate a reasoned decision as to the proper construction of the phrase “work of artistic craftsmanship” as it is used in the Copyright Act.

The proper construction of that phrase is of great public importance, we respectfully submit, for the following reasons.  First, it affects the operation and construction of two important Acts - the Copyright Act and the Designs Act - and their interrelationship.  Secondly, it affects the integrity and function of the designs register and the implementation of the policy concerning the copyright designs overlap in force so far as that policy is reflected in the provisions of the Designs Act and the Copyright Act.

In that respect, the interrelationship of the Acts and the construction of the Act is all the more important because the Designs Act 2003 has intensified the need for an examination of work of artistic craftsmanship insofar as it reflects designs of the 2003 Act, making the requirement of distinctiveness in relation to designs much more significant.

Thirdly, in relation to the matters of general importance the register of designs and its integrity is a matter upon which commercial enterprises rely, and indeed designers rely, to determine first whether it is worth registering a design which secondly may be the subject of commercial exploitation and manufacture.  Reliance on the register is of great importance even to large organisations.  There was evidence in this case of registrations by car manufacturers and boat manufacturers.  For instance, if there is to be an undefined and open‑ended exception to the designs register as to works of artistic craftsmanship, whatever that may mean, with no defined content, the worth of the designs register is cast into serious doubt.

CRENNAN J:   You really want to argue, do you not, that work of artistic craftsmanship should be read much more narrowly, having regard to amendments based on the Copyright Act and the designs legislation than it has been read in the past.

MR GARNSEY:   We submit, with respect, it has not really been read in the past.

CRENNAN J:   Yes, there is some force in that, I know.

MR GARNSEY:   The answer is yes, your Honour, and that is why we advanced a case at trial and before the Full Court that work of artistic craftsmanship should be given a positive content so that one can see there are positive requirements with boundaries which can be identified and it is an inadequate approach to construe the phrase by reference to a number of negative propositions which circle around whatever may or may not be the central concept.

GLEESON CJ:   To what extent was the decision of the Full Court of the Federal Court in this case fact specific?

MR GARNSEY:   It was almost completely – if your Honour pleases, I should answer your Honour’s question very carefully.  The Full Court upheld the trial judge saying that all work of artistic craftsmanship involved on this proper construction were questions of fact.  The Court did not analyse and refer to the authorities which were at considerable length analysed before it and, indeed, the subject of lengthy written submissions at the request of court after the conclusion of the appeal.

The trial judge did examine the authorities a little more extensively but did not accept our construction of the phrase “work of artistic craftsmanship”.  The Full Court did not refer to the trial judge’s examination of those authorities in the sense of reviewing it and saying they agreed with his Honour or not in any respects.

CRENNAN J:   One problem, perhaps, is that whilst the trial judge did not accept your narrower construction, when he looked at the evidence and made findings he in fact approached the evidence as though he had accepted your narrower construction.

MR GARNSEY:   We submit not because his Honour gave primacy, we say, to the subjective intention of the creator and we submit ‑ ‑ ‑

CRENNAN J:   Because that evidence was not contested, was it?

MR GARNSEY:   No, if your Honour pleases, but there was a large body of evidence which his Honour simply ignored and which the Full Court ignored, including the admissions of the creator that “I approach the design of this just like a car manufacturer”, including the advertisements for his particular yacht and his advertised benefits for the yacht which did not include, in almost all instances, any reference to its beauty or appearance, including the process of manufacture and exploitation that he had engaged in.

That evidence was not disputed in the sense of the primary facts.  Likewise, the trial judge, with respect, elevated what the respondent said in relation to his aesthetic intent.  He did not say that his predominant main or main intent was to create a yacht although his Honour seems to have taken that and the Full Court, in not examining matters any more extensively than they did, seemed to have accepted that.  He put it less and we have set that out in the outline of summary of argument.

When your Honour the Chief Justice said how is it fact specific, the answer is the Full Court, we say wrongly, approached the matter as if it could just gloss over the facts without considering the construction of work of artistic craftsmanship which was put before it at great length and the subject of extensive submission.  That led to a serious error which makes the decision of the Full Court untenable in the light of what one can get out of the existing authorities and it is in this respect ‑ ‑ ‑

GLEESON CJ:   You are not suggesting, are you, that if we grant special leave we are going to listen to argument at great length and extensive submissions?

MR GARNSEY:   No, your Honour, I am not.  I want to make this point and I will make it very shortly, if your Honour pleases, because it shows the danger of being fact specific before you construe the statute.  The Full Court ended up by saying the trial judge may have been wrong in finding a subsistence of copyright in the plug and we think he probably was but we will not say too much about that.  The trial judge was wrong and no

one seriously contended that there was copyright in the complete yacht as a work of artistic craftsmanship as a whole.

What we have found - and we do not really need to consider the moulds because the trial judge did not really expressly consider them, although the question that went to the Full Court because that reason did not mention the moulds.  Then the Court said but the hull and deck mouldings - which are made from the moulds which are made from the plug – are works of artistic craftsmanship in which copyright can subsist.

Now, one thing one gets from the House of Lords in Hensher’s Case and indeed from Justice Drummond in Coogi’s Case is that you do not have subsistence of copyright in a derivative work which reproduces an earlier copyright work.  If there was going to be any work of artistic craftsmanship it was the plug and Hensher’s Case, the whole case was conducted on the basis that there was a prototype chair which had been destroyed but that is what all the courts were considering in Hensher’s Case from the first instance in the House of Lords.

Justice Drummond in Coogi’s Case says the same thing succinctly at – I do not think I need to give your Honours the reference, but his Honour says exactly the same thing, that in Coogi’s Case his Honour found, or was trying to find, whether or not there was a work of artistic craftsmanship in relationship to the first run of a material.  His Honour made it clear that the only thing one could talk about was the first run, the design of the material and that was in fact made by computer.

GLEESON CJ:   I think we get the drift, Mr Garnsey.  Perhaps we would be assisted at this stage to hear what Mr Stone has to say.

MR GARNSEY:   If your Honour pleases.

GLEESON CJ:   Yes, Mr Stone.

MR STONE:   If the Court pleases, we rely on our written submissions insofar as they address my learned friend’s written outline.  There are three points by way of response to Mr Garnsey’s oral submissions.  With respect, the applicant does invite a far narrower reading of the expression “work of artistic craftsmanship” than has been given to date by the courts and certainly then a narrower reading than was given by the House of Lords in Hensher’s Case.

We say, again, with respect, that when one looks at the argument advanced for the narrow reading the argument is insufficiently persuasive to justify the grant of special leave.  If I can take the Court into the grounds, the special leave questions identified, which are at the application book at page 103.  In our respectful submission, special leave questions 1 and 2(a) really cover the same ground.  Question 2(a) advances the construction which Mr Garnsey contends for and what it amounts to is this.  If an author of a work, a craftsman, who is crafting a useful or a functional work, has a substantial purpose of creating something which is useful, then however important the aesthetic aspirations and however successful the aesthetic result achieved, that work is not a work of artistic craftsmanship. 

That is the proposition which Mr Garnsey would have the Court consider.  It was rejected by the trial judge expressly, rejected by the Full Court.  It is contrary to the approach which has been taken by the House of Lords in Hensher.  It is contrary to the legislative purpose of granting copyright protection to works of artistic craftsmanship which was to protect the works of the arts and crafts movement.  It is contrary to the legislative intention disclosed by the amendments to the Copyright Act made in 1989 which inserted works of artistic craftsmanship as an exception to the limited defence in section 77 of the Copyright Act.

It gains no warrant in authority and it also leads to absurd outcomes.  For example, on the argument or the definition which is being put up, if the craftsman intends to craft a beautiful chair, if he intends it also should also be a comfortable chair and achieve that objective, it is not a work of artistic craftsmanship but if he ‑ ‑ ‑

GLEESON CJ:   I suppose the same applies to a rug.

MR STONE:   Yes, it applies to floor tiles and so on.  If he intends to make it comfortable, intends it to be useful, then on the argument that is being put up it is not a work of artistic craftsmanship and that gets no support from anything.  Historically, and in particular in Hensher’s Case, the courts have treated the question of work of artistic craftsmanship as a simple point of statutory construction.  You give the words their ordinary meaning in the context of the statute with regard to the legislative history and you pay particular regard to the fact that the legislative purpose of initially granting protection was to protect the works of the arts and crafts movement.

If your Honours please, we would say, with respect, that point is not attended with sufficient doubt to warrant the grant of special leave.  We would also respectfully submit that it is not a point of any real importance.  This case is the first time the point has ever been considered by an intermediate Court of Appeal in Australia and the applicant’s submissions go so far as to invite this Court to consider the point because it may never arise again, to paraphrase what they say.

Mr Garnsey did not advance any particular argument in relation to ground 2(b), suffice to say, in our respectful submission, the courts below

were plainly right, (a); and (b) the point is of no importance because, of course, the provision to be construed has been clarified by the 2003 amendments to the Copyright Act.

That leaves the third special leave ground, which I call the plug ground.  It is important to recognise the basis upon which the Full Court decided that it would not uphold the trial judge on the question of the plug.  It did not decide the plug was not a work of artistic craftsmanship.  If I can take the Court into the application book and to page 82 at paragraph 58 at the foot, the basis of the decision there appears.  The court, in reliance upon Hensher’s Case or doubts expressed in three of the speeches in Hensher’s Case, said:

There may be some doubt as to whether an object that . . . is intended to be used only as a step in a commercial operation and has no value in itself, could be a work of artistic craftsmanship –

relying on Hensher and for that reason decided, if one goes over to page 84, that it would not decide that question and for reasons the Full Court expressed it was not necessary for it to do so.  There is nothing incongruous in holding that copyright subsists in the mouldings which are, after all, the manifestation or the shape of the plug which has been handcrafted.

The case was, with respect, highly fact specific.  It was highly fact specific to the extent that the respondent’s experts doubted in their initial evidence – and it is not in dispute – referred to in the trial judge’s reasons, that the applicant – I withdraw that.  The applicant’s witnesses doubted that the respondent could have crafted the yacht in the way that he said he did.  The method by which the yacht was created is in terms of modern day production quite atypical.  It is, however, typical of the methods by which the old shipwrights of the 18th and 19th century created their vessels.

With respect, the case is entirely fact specific. The facts of the case are probably, because of that, never likely to arise again.  The applicant points to the dangers in the decision as extending the ambit of works of artistic craftsmanship to a range of products, eg, motor cars, but that ignores one point.  In modern production very little is made by craftsmanship and much is made by machine.  This was a case about hand craftsmanship.  If the Court pleases, those are the points we would make in response to the application.

GLEESON CJ:   Thank you, Mr Stone.  Yes, Mr Garnsey.

MR GARNSEY:   Your Honour, the proposition we advance is not the principal proposition as to work of artistic craftsmanship.  It is not as my friend said.  We do not say that function destroys work of artistic craftsmanship.  Indeed, the genesis of the term in the arts and crafts movement of William Morris shows we would not advance any such contention.  The difference is, if I might say so with the greatest respect, between your Honour’s carpet in this Court and a William Morris rug.  One is to be appreciated on our contention primarily for its aesthetic qualities.

The second matter is that there is no – when my friend says the case was fact specific, first, there was no dispute as to the evidence and as to the factual findings.  Where our complaint is is that the trial judge and the Full Court did not consider a large amount of undisputed evidence which was plainly relevant had they turned their minds, and particularly the Full Court, to the proper construction of work of artistic craftsmanship.

Thirdly, in relation to the matter that I put before your Honour and was touched upon by my friend as to the order of creation, the case did very much turn on the sequence of plug, moulds, mouldings, and then yacht which the Full Court went through at some length, from pages 82 to 83 of the application book, in paragraphs 58 through to 64, and in that sense the case is fact specific but the facts there highlight, we say, the need for a clear and elevated consideration of work of artistic craftsmanship which no appellate court of any country, with the exception of the House of Lords in very diverse and difficult judgments, if one tries to reconcile them, has ever given.  In our respectful submission, this is a most important case for this Court.

In relation to the section 10 “artistic work” definition, which has been the subject of amendment in 2003, there is the first, if I could say as an ad misericordiam submission - it is a little point and will not take long and if we get special leave as to the main point we would ask that respectfully leave be granted also in respect of it.  But secondly, it is about the application of a section in a large number of cases which can still have application.  Thirdly, and perhaps most importantly, as to an abstract matter of construction, it is of general importance, because it raises what subsequent legislative intention can be used for to construe a previous form and normally when a section is reversed the inference is the opposite was meant and the legislator has changed its mind.  In this case, the trial judge and the Full Federal Court found the opposite.

CRENNAN J:   Just on your main point, Mr Garnsey, what about the proposition that it is really contained, is it not, in 2(a)?  Do you really need special leave questions 1(a) and (b), looking now at 103?

MR GARNSEY:   Your Honour, 2(a) does cover everything.  Perhaps 1 was put in to, with respect, attract the attention of the Court.  But, your Honour, those arguments would be put under 2(a) in any event, as the

summary of argument makes clear, then I have made my submissions as to (b).  If your Honours please.

GLEESON CJ:   Thank you.  In this matter there will be a grant of special leave to appeal.

We will adjourn for a short time to reconstitute.

AT 1.11 PM THE MATTER WAS CONCLUDED