Cortis Exhaust Systems Pty Ltd v Kitten Software Pty Ltd - [2001] FCA 1189

FEDERAL COURT OF AUSTRALIA
Cortis Exhaust Systems Pty Ltd v Kitten Software Pty Ltd [2001] FCA 1189
CONTRACT – deed of assignment for the assignment of some assets of a business – whether deed breached – restraint of trade provision – where restriction on the “development” of software products – whether applicants have engaged in unconscionable conduct
COPYRIGHT – whether applicant’s copyright in software manual and logo infringed – where work is “trivial”
TRADE PRACTICES – whether respondents have engaged in misleading or deceptive conduct
WORDS AND PHRASES – “public edition copyright”
Trade Practices Act 1974 (Cth) s 52
Copyright Act 1968 (Cth) s 88
Restraints of Trade Act 1976 (NSW) s 4
Judiciary Act (1903) (Cth) s 79
Nationwide News Limited v Copyright Agency Limited (1996) 65 FCR 399
Blomley v Ryan (1956) 99 CLR 362 at 415
Commercial Bank of Australia Limited v Amadio (1983) 151 CLR 447
Louth v Diprose (1992) 175 CLR 621
C G Berbatis Holdings Pty Ltd v ACCC [2001] FCA 757
Trego v Hunt [1896] AC 7
Commissioner of Taxation v Murry (1998) 193 CLR 605
Castlemaine Tooheys Ltd v Carlton & United Breweries Ltd (1987) 10 NSWLR 468
Australian Securities and Investment Commission v Edensor Nominees Pty Ltd (2001) 177 ALR 329
Nationwide News Pty Ltd v Copyright Agency Limited (1996) 65 FCR 399
The Commonwealth v Amann Aviation Pty Ltd (1991) 174 CLR 64
E & Skone James et al, Copinger and Skone James on Copyright, 1991, 13th ed
CORTIS EXHAUST SYSTEMS PTY LIMITED v
KITTEN SOFTWARE PTY LIMITED, JOHN MILSON and IRENE COOK
NG 639 OF 1998
TAMBERLIN J
SYDNEY
28 AUGUST 2001

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

NG 639 OF 1998

BETWEEN:

CORTIS EXHAUST SYSTEMS PTY LIMITED
(ACN 003 923 911)
APPLICANT

AND:

KITTEN SOFTWARE PTY LIMITED
(ACN 052 040 247)
FIRST RESPONDENT

JOHN MILSON
SECOND RESPONDENT

IRENE COOK
THIRD RESPONDENT

JUDGE:

TAMBERLIN J

DATE:

28 AUGUST 2001

PLACE:

SYDNEY

REASONS FOR JUDGMENT
INTRODUCTION

On 28 January 1997, the applicant (“Cortis”) entered into a Deed of Assignment (“Deed”) with the respondents (who will be individually referred to as “Kitten”, “Milson” and “Cook”) for the assignment of some assets (but not the goodwill) of Kitten’s business. The assigned assets included copyright in certain computer software, confidential information, a list of existing users of the Kitten software together with operational and other manuals and promotional materials. The assignment did not include the Kitten name. Cortis claims that the respondents have breached the Deed and have also infringed the applicant’s copyright in the manuals supplied with the software and a logo. It also claims that the respondents have engaged in misleading or deceptive conduct within s 52 of the Trade Practices Act 1974 (Cth) (“the TPA”).
FACTUAL SETTING
The factual background of the matter is as follows. Cortis was incorporated approximately fourteen years ago to purchase an existing business engaged in the repair and manufacture of motor vehicle exhaust systems. The Managing Director of…

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.

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Details

Case: [2001] FCA 1189
Decision Date: 28 AUGUST 2001

CaseChat Overview and Summary

Cortis Exhaust Systems Pty Ltd sought relief against Kitten Software Pty Ltd, John Milson, and Irene Cook in the Federal Court of Australia. Cortis claimed that the respondents had breached a deed of assignment, engaged in unconscionable conduct, infringed copyright, and engaged in misleading or deceptive conduct under the Trade Practices Act 1974 (Cth). Cortis argued that the respondents had developed a Windows 95 based program, ServiceMaster, which directly competed with the DOS based SIM product, in breach of a restraint of trade provision in the deed. Cortis also claimed that the respondents had infringed copyright in the ServiceMaster manual and logo. Finally, Cortis argued that the respondents had engaged in misleading or deceptive conduct in promoting ServiceMaster as an upgrade of the SIM product. The court found that the respondents had breached the restraint of trade provision and engaged in misleading or deceptive conduct. However, the court found that there was no copyright infringement. The court awarded Cortis $80,000 in damages. The court did not make any orders at that stage and directed Cortis to bring in short minutes to give effect to the reasons for judgment.

Orders