Data Access Corporation v Powerflex Services Pty Ltd
[1996] FCA 38
•9 FEBRUARY 1996
CATCHWORDS
Intellectual Property - Copyright - Nature and subject matter of copyright - Computer programs - Words of a computer language copied, source code expression of the meanings of the words not copied, computer functions performed under the instructions expressed by the words identical - Infringement of copyright in the computer programs constituted.
Copyright Act 1968 ss 10(1), 14(1)
Autodesk Inc. v. Dyason (1992) 173 C.L.R. 330
Autodesk Inc. v. Dyason [No. 2] (1995) 176 C.L.R. 300
Lotus Development Corporation v. Paperback Software International (1990) 18 I.P.R. 1
Lotus Development Corporation v. Borland International Inc. 49F. 3rd. 807 (1st Circ. 1995)
DATA ACCESS CORPORATION v. POWERFLEX SERVICES PTY. LTD., POWERFLEX CORPORATION PTY. LTD., DAVID MEREDITH BENNETT, MARGARET ANN BENNETT and DEMILEIGH PTY. LIMITED
No. VG473 of 1993
Jenkinson J.
Melbourne
9 February, 1996
IN THE FEDERAL COURT OF AUSTRALIA )
VICTORIA DISTRICT REGISTRY ) No. VG473 of 1993
GENERAL DIVISION )
BETWEEN:DATA ACCESS CORPORATION
Applicant
AND: POWERFLEX SERVICES PTY. LTD.
First Respondent
AND:POWERFLEX CORPORATION PTY. LTD.
Second Respondent
AND:DAVID MEREDITH BENNETT
Third Respondent
AND:MARGARET ANN BENNETT
Fourth Respondent
AND:DEMILEIGH PTY. LIMITED
Fifth Respondent
CORAM: Jenkinson J.
PLACE: Melbourne
DATE: 9 February, 1996
MINUTES OF ORDER
THE COURT ORDERS THAT:
Further consideration of the proceeding be adjourned to a date to be fixed.
(Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules)
IN THE FEDERAL COURT OF AUSTRALIA )
VICTORIA DISTRICT REGISTRY ) No. VG473 of 1993
GENERAL DIVISION )
BETWEEN: DATA ACCESS CORPORATION
Applicant
AND:POWERFLEX SERVICES PTY.LTD.
First Respondent
AND: POWERFLEX CORPORATION PTY. LTD.
Second Respondent
AND:DAVID MEREDITH BENNETT
Third Respondent
AND:MARGARET ANN BENNETT
Fourth Respondent
AND:DEMILEIGH PTY. LIMITED
Fifth Respondent
CORAM: Jenkinson J.
PLACE: Melbourne
DATE: 9 February. 1996
REASONS FOR JUDGMENT
Trial of questions arising in a proceeding for infringement of copyright in computer programs.
The applicant Data Access Corporation ("Data Access") is a company incorporated under the law of the State of Florida in the United States of America. Data Access claims to be the owner of copyright alleged to be subsisting
in computer programs first published in that country. The provisions of the Copyright Act 1968 (Cth) having been applied to those "literary works" by s.184 of that Act and Regulation 4 of the Copyright (International Protection) Regulations, acts done by the respondents in this country are alleged to have constituted infringements.
A director of Data Access, Cory Casanave, and others of its employees, developed the works in and after 1979. First publication of any of the works occurred in 1981. Before this proceeding commenced, on 5 November 1993, eighteen revisions of the works had been published, many of them including additional works. The name of the works is DataFlex. They are compendiously described as an application development system. In the usage of the computer industry the word "application" in the context of that phrase signifies the compilation of a set of computer programs to be used to perform a specific task. The task which the DataFlex works are intended to perform is the development of such applications and of databases (by which word are signified in that industry classes of information stored in a computer in an organised way). Computer programmers and developers, for whose use DataFlex is designed, use programs included in the system to develop computer programs designed to establish and manage and manipulate databases by providing facilities for the storage, organisation and retrieval of information and for computation and comparison with respect to the information. DataFlex also includes developed computer programs which the purchaser may use to manage and manipulate databases instead of developing his own programs. DataFlex incorporates a "run time" program which enables computer programs and databases developed by means of the system to operate or "run". Data Access charges a licence fee for the run time program. Data Flex has been in use in this country since 1982.
The third respondent Dr. David Meredith Bennett is a legally qualified medical practitioner whose interest in computer science led him, after four years' practice of medicine, to take an appointment as Fellow in Computer Medicine at the Alfred Hospital, where in 1983 he used DataFlex. In 1985 he joined C. J. Bellamy and Associates as a computer consultant where he remained for six years. He aspired to create an application development system which would be highly compatible with the DataFlex computer language in which source code is written and with the DataFlex database file structure, so that persons who had been using the DataFlex application development system would be persuaded to acquire also the system Dr. Bennett proposed to create. By December 1987, when he purchased the latest version of DataFlex, Dr. Bennett had gained a profound understanding of that system and was steadily preparing his own system. By early 1989 he had so refined the system that he procured members of the Victorian DataFlex Users' Group, a voluntary association of persons who used or were otherwise interested in the DataFlex system, to test and report on his system. In September 1989 he and his wife, the fourth respondent Margaret Ann Bennett, caused the second respondent to be incorporated and that company began selling Dr. Bennett's system under the name "Powerflex", which in 1990 was changed to "PFXplus". Thereafter PFXplus was subject to revisions from time to time.
The evidence showed that the same word may be found in a number of computer languages. But use of that word in source code does not necessarily cause a device having digital information processing capabilities to perform the same function when the use is in one language as when the use is in another language. In the PFXplus language use is not made of the 29 words of the DataFlex language which express commands for developing graphics. Of the other 225 words of the DataFlex language which are listed in the DataFlex Encyclopaedia (version 2.3b) 192 are in the PFXplus language (version 2.10). And the use of each of those 192 words in the source code of either language contributes to cause a device having digital information processing capabilities to perform the same function. The same may be said of what are called "the reserved words" of each language : nearly all the words are the same in each language and contribute to cause performance of the same function. However, there was no objective similarity between the expression in the source code of PFXplus and the expression in the source code of DataFlex, either of the syntax or of the semantics of most of the words, except that in each case the word of which the syntax and semantics were defined was found in that expression. Dr. Bleechmore of counsel for the respondents submitted that each word considered separately from the defining source code text, is a label or tag for an idea not capable of copyright protection. The respondents had, it was said, "adopted .... the meaning and function of each of the words .... but the expression of that meaning in terms of the underlying set of instructions is completely different and there is no objective similarity between the two at whatever level of abstraction is considered, save for the highest level of abstraction which is the idea of meaning expressed in the short English descriptions contained in the DataFlex Encyclopaedia".
Each of the words of the DataFlex language found also in the PFXplus language is in my opinion an expression of a set of instructions intended to cause a device having digital information processing capabilities to perform a particular function. The circumstance that the expression of those instructions in source code is different is in my opinion immaterial. At the level of abstraction under consideration the objective similarity is complete : the set of instructions intended to cause the performance of the particular function is expressed, at that level where the "language, code or notation" is based upon concatenations of letters of the alphabet, by the same concatenation of letters in each language. If at that level some of the concatenations constitute or resemble words of the English language descriptive or suggestive of the functions to be performed, that may facilitate the use of the computer program by those who understand English. But each concatenation of letters is none the less an expression of a set of instructions intended to cause the device to perform a particular function, in my opinion, and therefore a "computer program" within the meaning of that expression in the Copyright Act 1968.
Dr. Bleechmore sought to make applicable to the words of command in the DataFlex language the reasoning of the United States Court of Appeals in Lotus Development Corporation v. Borland International Inc. 49 F. 3rd 807 (1st Cir. 1995). Like the defendants in Lotus Development Corporation v. Paperback Software International (1990) 18 I.P.R. 1, to which Dawson J. referred in Autodesk Inc. v. Dyason (1992) 173 C.L.R. 330 at 345, Borland International Inc. deliberately copied the Lotus 1-2-3 menu command hierarchy for a computer spreadsheet program. Title 17 of the United States Code (which is entitled "Copyrights") provides in s.102(b):
"In no case does copyright protection for an original work of authorship extend to any idea, procedure, process, system, method of operation, concept, principle, or discovery, regardless of the form in which it is described, explained, illustrated, or embodied in such work."
The Court of Appeals reasoned thus (49 F. 3rd. at 815-817):
"[7-9] We think that `method of operation,' as that term is used in § 102(b), refers to the means by which a person operates something, whether it be a car, a food processor, or a computer. Thus a text describing how to operate something would not extend copyright
protection to the method of operation itself; other people would be free to employ that method and to describe it in their own words. Similarly, if a new method of operation is used rather than described, other people would still be free to employ or describe that method.[10] We hold that the Lotus menu command hierarchy is an uncopyrightable `method of operation.' The Lotus menu command hierarchy provides the means by which users control and operate Lotus 1-2-3. If users wish to copy material, for example, they use the `Copy' command. If users wish to print material, they use the `Print' command. Users must use the command terms to tell the computer what to do. Without the menu command hierarchy, users would not be able to access and control, or indeed make use of, Lotus 1-2-3's functional capabilities.
The Lotus menu command hierarchy does not merely explain and present Lotus 1-2-3's functional capabilities to the user; it also serves as the method by which the program is operated and controlled.
........ ........ ........ ........ ........ .......
The district court held that the Lotus menu command hierarchy, with its specific choice and arrangement of command terms, constituted an `expression' of the `idea' of operating a computer program with commands arranged hierarchically into menus and submenus. Borland II, 799 F.Supp. at 216. Under the district court's reasoning, Lotus's decision to employ hierarchically arranged command terms to operate its program could not foreclose its competitors from also employing hierarchically arranged command terms to operate their programs, but it did foreclose them from employing the specific command terms and arrangement that Lotus had used. In effect, the district court limited Lotus 1-2-3's `method of operation' to an abstraction.
[11,12] Accepting the district court's finding that the Lotus developers made some expressive choices in choosing and arranging the Lotus command terms, we nonetheless hold that that expression is not copyrightable because it is part of Lotus 1-2-3's `method of operation.' We do not think that `methods of operation' are limited to abstractions; rather, they are the means by which a user operates something. If specific words are essential to operating something, then they are part of a `method of operation' and, as such, are unprotectable. This is so whether they must be highlighted, typed in, or even spoken, as computer programs no doubt will soon be controlled by spoken words.
The fact that Lotus developers could have designed the Lotus menu command hierarchy differently is immaterial to the question of whether it is a `method of operation.' In other words, our initial inquiry is not whether the Lotus menu command hierarchy incorporates any expression. We think that the Altai test would contemplate this being the initial inquiry. Rather, our initial inquiry is whether the Lotus menu command hierarchy is a `method of operation.' Concluding, as we do, that users operate Lotus 1-2-3 by using the Lotus menu command hierarchy, and that the entire Lotus menu command hierarchy is essential to operating Lotus 1-2-3, we do not inquire further whether that method of operation could have been designed differently. The `expressive' choices of what to name the command terms and how to arrange them do not magically change the uncopyrightable menu command hierarchy into copyrightable subject matter.
Our holding that `methods of operation' are not limited to mere abstractions is bolstered by Baker v. Selden. In Baker, the Supreme Court explained that
the teachings of science and the rules and methods of useful art have their final end in application and use; and this application and use are what the public derive from the publication of a book which teaches them.... The description of the art in a book, though entitled to the benefit of copyright, lays no foundation for exclusive claim to the art itself. The object of the one is explanation; the object of the other is use. The former may be secured by copyright. The latter can only be secured, if it can be secured at all, by letters-patent.
Baker v. Selden, 101 U.S. at 104-05. Lotus wrote its menu command hierarchy so that people could learn it and use it. Accordingly, it falls squarely within the prohibition on
copyright protection established in Baker v. Selden and codified by Congress in § 102(b).In many ways, the Lotus menu command hierarchy is like the buttons used to control, say, a video cassette recorder (`VCR'). A VCR is a machine that enables one to watch and record video tapes. Users operate VCRs by pressing a series of buttons that are typically labelled `Record, Play, Reverse, Fast Forward, Pause, Stop/Eject.' That the buttons are arranged and labelled does not make them a `literary work,' nor does it make them an `expression' of the abstract `method of operating' a VCR via a set of labelled buttons. Instead, the buttons are themselves the `method of operating' the VCR.
When a Lotus 1-2-3 user chooses a command, either by highlighting it on the screen or by typing its first letter, he or she effectively pushes a button. Highlighting the `Print' command on the screen, or typing the letter `P,' is analogous to pressing a VCR button labelled `Play.'
Just as one could not operate a buttonless VCR, it would be impossible to operate Lotus 1-2-3 without employing its menu command hierarchy. Thus the Lotus command terms are not equivalent to the labels on the VCR's buttons, but are instead equivalent to the buttons themselves. Unlike the labels on a VCR's buttons, which merely make operating a VCR easier by indicating the buttons' functions, the Lotus menu commands are essential to operating Lotus 1-2-3. Without the menu commands, there would be no way to `push' the Lotus buttons, as one could push unlabelled VCR buttons. While Lotus could probably have designed a user interface for which the command terms were mere labels, it did not do so here. Lotus 1-2-3 depends for its operation on use of the precise command terms that make up the Lotus menu command hierarchy."
This reasoning, Dr. Bleechmore submitted, was applicable to the words of the DataFlex language which Dr. Bennett had appropriated. In the hands of those using DataFlex programs to develop applications the words of the language are tools by which the computer is operated, it was submitted. And, the submission continued, although the Copyright Act 1968 has no provision corresponding to s.102(b) of the American Act, the principle to which that section gives expression, stated in Baker v. Selden, supra, and re-affirmed in Autodesk v. Dyason 173 C.L.R. at 344-345) - that "when the expression of an idea is unseparable from its function, it forms part of the idea and is not entitled to the protection of copyright" - applies to deny the words of the DataFlex language the protection of copyright.
In re-affirming the principle on which Dr. Bleechmore relied Dawson J. gave a reference to Lotus Development Corporation v. Paperback Software International (1990) 18 I.P.R. 1 at 25. As I have noted, the facts of that case were virtually indistinguishable from the facts of Lotus Development Corporation v. Borland, supra. In the Paperback Case reference to s.102(b) is cursory. Examination by Keeton D.J. in that case of the principles in accordance with which the copyrightability of the Lotus menu command hierarchy was to be determined is extensive. The passage to which Dawson J. referred and what immediately precedes and follows that passage are in these terms (18 I.P.R. at 25-26):
"Accordingly, I conclude that a court, in determining whether a particular element is copyrightable, must not allow one statutory mandate - that functionality or usefulness is not itself a basis for copyrightability - to absorb and destroy another statutory mandate - that elements of expression are copyrightable. Elements of expression, even if embodied in useful articles, are copyrightable if capable of identification and recognition independently of the functional ideas that make the article useful. This mandate may be viewed as a corollary of the central distinction of copyright law between idea and expression, which is explored further immediately below.
B. THE IDEA-EXPRESSION RIDDLE; FOUR ADDITIONAL CONCEPTS
It is by now plain that an idea is not copyrightable and an expression may be. It does not follow, though, that every expression of an idea is copyrightable. To begin to get an understanding of the legally significant contrasts among an idea, non-copyrightable expressions of the idea, and a copyrightable expression, we must take account of four more concepts.
Earlier parts of this opinion refer to two of these four: `originality' and `functionality'. The expression of an idea is copyrightable only if it is original - that is, if the expression originated with the author. 17 USC § 102(a): see part III(A)(s)(b), supra. Even then the expression of the idea is not copyrightable if the expression does no more than embody elements of the idea that are functional in the utilitarian sense. 17 USC § 102(b): see part IV(A), supra.
The third concept is `obviousness'. When a particular expression goes no farther than the obvious, it is inseparable from the idea itself. Protecting an expression of this limited kind would effectively amount to protection of the idea, a result inconsistent with the plain meaning of the statute: E. H. Tate Co. v. Jiffy Enterprises Inc. 16 FRD 571, 573 (ED Pa 1954) (small sketch and accompanying instruction `Apply hook to wall' so obvious that it is not entitled to copyright protection).
It is only a slight extension of the idea of `obviousness' - and one supported by precedent - to reach the fourth concept: `merger'. If a particular expression is one of a quite limited number of the possible ways of expressing an idea, then, under this fourth concept, the expression is not copyrightable; `When the uncopyrightable subject matter is very narrow, so that "the topic necessarily requires" if not only one form of expression, at best only a limited number, to permit copyrighting would mean that a party or parties, by copyrighting a mere handful of forms, could exhaust all possibility of future use of the substance. In such circumstances it does not seem accurate to say that any particular form of expression comes from the subject matter. However, it is necessary to say that the subject matter would be appropriated by permitting the copyrighting of its expression. We cannot recognise copyright as a game of chess in which the public can be checkmated': Morrissey v. Proctor & Gamble Co. 379 F 2d 675, 678-9 (1st Cir 1967) (citations omitted). See also Concrete Machinery Co. v. Classic Lawn Ornaments Inc. 843 F 2d 600, 606 (1st Cir 1988) (`When there is essentially only one way to express an idea, the idea and its expression are inseparable and copyright is no bar to copying that expression.'); Herbert Rosenthal Jewelry Corp. v. Kalpakian 446 F 2d 738, 742 (9th Cir 1971) (idea of a jewel-encrusted life-like bee pin inseparable from expression; thus expression not copyrightable because `protecting the "expression" in such circumstances would confer a monopoly of the "idea" upon the copyright owner'): cf Atari Inc. v. North American Philips Consumer Electronics Corp. 672 F 2d 607, 616 (7th Cir), cert denied, 459 US 880 (1982) (scènes à faire of literary works - `stock literary devices' such as `incidents, characters or settings which are as a practical matter indispensable, or at least standard, in the treatment of a given topic' - `are not protectible [sic] by copyright'); Landsberg v. Scrable Crossword Game Players Inc. 736 F 2d 485, 489 (9th Cir) (scènes à faire not copyrightable because granting a copyright `would give the first author a monopoly on the commonplace ideas behind the scènes à faire'), cert denied, 469 US 1037 (1984).
If, however, the expression of an idea has elements that go beyond all functional elements of the idea itself, and beyond the obvious, and if there are numerous other ways of expressing the non-copyrightable idea, then those elements of expression, if original and substantial, are copyrightable."
Unlike the bookkeeping forms in question in Baker v. Selden, most of the words - that is, the concatenations of letters -
of the DataFlex language which have been used as words of the PFXplus language in my opinion go beyond the functional elements of the ideas they express, and beyond the obvious, and are in my opinion elements of expression original and substantial and therefore copyrightable. And, whatever the effect which must be given to the phrase "method of operation" in the American Act, I must attempt to give effect to legislative provisions wherein the phrase is not found.
Three words of the DataFlex language were alleged by the applicant to be the subject, if not of reproduction by Dr. Bennett in the PFXplus language, of adaptation by Dr. Bennett. The allegation was made in respect of all the reserved words of the Data Flex language which are words of the PFXplus language, but particular attention was given in evidence to these three words, which are called "macros". They are the commands "Report", "Entergroup" and "Enter". The corresponding words in the PFXplus language are "Report. PFA", "Entgroup.PFA" and "Enter.PFA". When PFXplus was first published each of the three DataFlex macros was encoded in a program component of DataFlex called FMAC, in an intermediate code called I-Code. The expression of the three commands in PFXplus was in source code. A translation of each command from the DataFlex I-Code instructions in FMAC to source code was compared by a number of expert witnesses with the PFXplus source code instructions. Each of the three commands cause the performance of a more complex function than many words. The objective similarity of the two versions of source code are in each of the three macros strong, and of course in each case compile to cause the computer to perform the same complex function. And that was the objective Dr. Bennett sought to achieve by close study of FMAC. In my opinion Dr. Bennett made an adaptation of the expression in I-Code of each of the three sets of instructions invoked by the three commands by his expression of that set of instructions in source code.
Each of DataFlex and PFXplus incorporates into its computer program what is called an error text table. When the program recognises an error in function or an error by the operator of the computer to which a number is assigned in the error table the program causes to be displayed on the screen a short phrase or sentence which describes the error. Each table runs from the number 1 to the number 100. For many of the numbers the corresponding screen text is identical in the two tables, for some of the numbers the text is very similar and descriptive of the same error. Every one of the DataFlex table numbers has a screen text descriptive of an error. But some of the PFXplus table numbers have the text "unknown error".
It was submitted on behalf of the applicant that, while the error text table is data, rather than a set of instructions, it is part of the DataFlex computer program. But the reproduction of that part of the DataFlex program was not reproduction in relation to a substantial part of the program. The program could function without an error text table, which was a convenience for operators.
Mr. Burnside Q.C., who appeared with Mr. Le Grand for the applicant, submitted in the alternative that the Data Flex error text table is a compilation, expressed in figures and words, and therefore a literary work, a substantial part of which Dr. Bennett reproduced in the PFXplus error text table. But the words of the table in each case is one of a quite limited number of the possible ways of expressing the idea which it is the function of that collocation of words to communicate. The expression of the idea is inseparable from its function and is not copyrightable, in my opinion.
The applicant alleges that Dr. Bennett has reproduced as part of the PFXplus program called "Runtime Program" that part of the DataFlex runtime program which contains the DataFlex Huffman Compression Table. Huffman compression, named for the man who first described it, is a system by which characters in a file expressed in a code of eight bits for each character are represented by much shorter strings of numbers. The shortest string is assigned to the most frequently occurring character and the length of each string is inversely proportional to the probability of occurrence of the character. Thus the saving of space required for the storage of data on memory devices such as hard disk drives and tapes is very great. It was common ground that the two tables, DataFlex and PFXplus, of the compressed code and corresponding character in eight bit code are identical and that Dr. Bennett intentionally caused them to be identical.
Dr. Bleechmore submitted that what had been reproduced was not a substantial part of the run time program : it was merely a means of conserving data file space. If it is removed from a run time program, the program still functions. There is force in the submission. But what has been reproduced is a compilation, expressed in figures (not ordinarily in a visible form) and therefore a "literary work". But Dr. Bleechmore denied that the making of the table involved sufficient judgment or skill to attract copyright protection. He pointed to the circumstance that the DataFlex table was produced by the operation of a computer program, which Mr. Casanave had devised, as supporting his submission. I cannot accept the submission. The use of the Huffman system to produce a compression table requires the employment of substantial skill and judgment and a very great deal of hard work, the evidence showed. It was for that reason that Mr. Casanave devised the computer program, in order to reduce the extent of the hard work. As it was put by Mr. Burnside, a logarithm table would not be uncopyrightable because a calculator had been used in its production, instead of unmediated human arithmetical calculation.
A further submission by Dr. Bleechmore was that, if a person whose application development system was the DataFlex system is using a PFXplus program to develop a computer program, it is essential that the PFXplus compression table be identical with the DataFlex compression table. "So", the submission continues, "there is only one way of expressing that idea of function, that idea of function through compatibility, and we would submit that this is an instance in which the idea has merged with the expression, there is only one table that will do the job for these DataFlex customers and therefore the expression, merged as it is with the idea, cannot be subject to copyright protection". I cannot accept the submission. The conception of "merger", as it was labelled by Keeton D.J. in Lotus Development Corporation v. paperback Software International (18 I.P.R. at 25), is applied before consideration of any question of infringing reproduction. The function of compression by means of the Hoffman method may be, and has been, performed by any one of very many different expressions in integer code. The expression given in the DataFlex table is but one of the many possible expressions. The conclusion is established that the DataFlex table is copyright before consideration is given to the PFXplus table. The desire of Dr. Bennett for the compatibility he achieved by reproduction of the DataFlex table, not any inseparability of function and expression of the Hoffman compression method, constrained him to merge function and expression.
The DataFlex language allocates, to each one of sixteen particular functions which is performed by a computer upon the pressing of a function key on the computer keyboard, a word suggestive of the function. The operator is thereby saved the labour of pressing the letter keys of the keyboard to spell out a concatenation of letters. Although more or less suggestive of the correlative function, the expression which the word gives is by no means one of a limited number of ways of expressing the function : each is merely a short mnemonic label. Each of the sixteen words is reproduced in PFXplus language, allocated to the same function. Each word in my opinion in an expression in the DataFlex language of the set of instructions which, by the pressing of the correlative key, causes the computer to perform a particular function and is therefore a computer program.
Mr. Burnside alleged infringement of the applicant's copyright in what the witnesses called the file structure of the DataFlex programs. It was common ground that the file structures in the two systems are identical and that that must be so if files compiled under one system are to be run under the other. The instructions which create file structure do not initiate activity, but they determine the way in which the activity proceeds. The instructions are in the runtime version of a program. The source code version of these instructions, like the source code versions of all the other instructions in question in the proceeding (except perhaps the macros) in PFXplus is not objectively similar to the source code version of the instructions in DataFlex. There was no evidence that there was such a similarity at the level of machine code, just as there was no evidence of such a similarity at machine code level in respect of any of the other instructions in question in the proceeding. But that, Mr. Burnside submitted, did not matter. All that was necessary was to show identity of function achieved, as Dr. Bennett freely admitted, by intensive and prolonged study and permitted use of the DataFlex programs. If there was not reproduction of the expression of a set of instructions intended to cause the computer to perform a particular function, there was an adaptation of the set of instructions, according to Mr. Burnside's submission.
The evidence does not enable me to find that in copying the file structure of DataFlex files Dr. Bennett expressed his set of instructions in a word of the Data Flex language and accordingly I am unable to find a reproduction of a computer program in that copying of function. But I accept Mr. Burnside's submission that there was an adaptation of the set of instructions which determine file structure.
The Copyright Amendment Act 1984 provided, for the purposes of the Copyright Act 1968, a definition of "computer program" as a species of "literary work", and a definition of "adaptation" in relation to "a literary work being a computer program". The word "adaptation" was defined to mean, in that relation, "a version of the work (whether or not in the language, code or notation in which the work was originally expressed) not being a reproduction of the work". The Explanatory Memorandum for the Bill which was enacted as the Copyright Amendment Act 1984 includes the following:
"Clause 3 - Interpretation
(a) `Adaptation'
10. The existing definition of adaptation will be amended by including a provision that an adaptation of a computer program means a version of the work, whether or not in the same language, code or notation as that in which the work was originally expressed, other than a reproduction of the work.
11. Copyright in literary works includes exclusive rights to reproduce or adapt such works and computer programs will be treated as literary works. However, the present definition of adaptation in relation to literary works only includes translation, conversion between dramatic and non-dramatic forms, and conversion to a pictorial form.
12. Of these, only translation is likely to be relevant to adaptation of programs and there are legal doubts as to whether this refers only to translations between human languages.
13. The new definition is intended to cover translation either way between the various so-called `high-level programming languages' in which the programs may be written by humans (often called `source code') and languages, codes or notations which actually control computer operations (often called `machine code' or `object code'). Thus `adaptation' is intended, for example, to cover the compilation of a FORTRAN program to produce machine code which will directly control the operation of a computer. Languages, etc. of intermediate level would also be covered.
14. It is also possible for a program to be converted from object code into source code, or between different languages of similar level. In some circumstances this process will result largely in a substantial reproduction of the original program. In other cases, however, such as compilation followed by de-compilation, the differences may be so substantial that one cannot speak of a reproduction although the final product is clearly derived from the original. The new definition of adaptation is intended to cover such situations."
In Autodesk Inc. v. Dyason [No. 2] (1995) 176 C.L.R. 300 at 329-330 Gaudron J. observed:
"As has been seen, the respondents have at all stages relied on the fact that the look-up table in Widget C is not itself an instruction or, as it was sometimes put, is data rather than instructions. It may be that, so far as the computing profession is concerned, there is a dichotomy between data and instructions. And, so far as the definition of `computer program' in the Act proceeds by reference to `a set of instructions (whether with or without related information)', it may be that it also recognizes that it is possible to draw a distinction between instructions and data. But that does not mean that, for the purposes of that definition, a computer program does not include data or information.
An instruction operates as such only to the extent that it conveys a command to its recipient. What is required to achieve that result in a given case will vary according to circumstances and according to the knowledge of that recipient. In general terms, the less knowledgeable the recipient, the greater will be the need for the instruction to be accompanied by information. To take an everyday example, it may be sufficient in one case to say `Go to the shop and buy butter'; in another it may be necessary to say `Go to the shop at the end of the street, the one painted green with groceries in its window, and buy butter'. As a matter of ordinary usage, each, viewed in its entirety, is an instruction. And it is an instruction whether or not accompanied by information about the shop.
Given ordinary usage and given that it has never been suggested that the expression `set of instructions' in the definition of `computer program' in s.10 of the Act is a technical or art term, it is, in my view, clear that that expression directs attention to an entire instruction or, more accurately, an entire set of instructions, and not merely those parts that consist of bare commands. So much is confirmed by the language used in the definition and by its context. The words `set of instructions' necessarily direct attention
to instructions in their entirety. And that direction is in no way cut down, but, rather, is reinforced by the parenthetical description of the instructions involved as instructions `whether with or without related information'. Moreover, the definition is concerned with instructions which `cause a device having digital information processing capabilities to perform a particular function' and in many cases it will be necessary for instructions to be accompanied by related information if those devices are to perform quite ordinary computer functions.Ordinary usage and the language and context of the definition of `computer program' in s.10 of the Act compel the conclusion that the words `set of instructions (whether with or without related information)' extend to comprehend information as well as commands. There is thus no basis for an argument that the Act does not extend copyright protection to information forming part of a set of instructions of the kind falling within the definition of `computer program', at least if that information is a substantial part of the relevant set of instructions."
If I have been in error in treating a single word of the Data Flex language as "a set of instructions", within the meaning of that expression in the definition of "computer program" (perhaps by placing too much reliance on the word "particular" in that definition, or perhaps by treating the word, divorced from the source code statement of its semantics and syntax, as an expression in a language of a set of instructions), I would be of the opinion that Dr. Bennett's copying of the words constituted an adaptation, within the defined meaning of that word, of a substantial part of each of the computer programs comprising the DataFlex application development system : an adaptation because PFXplus is a version of part of each of those programs and a substantial part because what has been copied informs virtually all of the expression of the instructions which cause the device having digital information processing capabilities to perform the functions of the development application system.
It was submitted by Dr. Bleechmore that certain parts of the works in respect of which the applicant alleged that it was the owner of copyright were not protected because under the law of the United States of America copyright in those parts had been invalidated by failure to place notice of copyright on copies publicly distributed in that country. But, for reasons expressed by a Full Court of this court in Enzed Holdings Ltd. v. Wynthea Pty. Ltd. (1984) 57 A.L.R. 167 at 180-181, "[t]he protection afforded by the Australian Act in relation to the subject matter and persons referred to in s.184 and reg. 4 (of the Copyright (International Protection) Regulations) is no greater and no less than that provided for works first published in Australia by a qualified person", and lack of conformity with legislative conditions of copyright protection in the foreign country where a work is first published is of no effect under those Australian provisions.
In the middle of 1989, before Powerflex (as it was then called) was first published, Dr. Bennett sought and obtained legal advice as to whether, if Powerflex were published and marketed in Australia, copyright in DataFlex would be infringed. The advice, which was in writing, was given by a solicitor Dr. Bennett believed, on the advice of his own solicitor, to be expert in the law of copyright in relation to computer programs. The first written advice suggested to Dr. Bennett's mind that the adviser had not correctly appreciated the facts and further communication about the facts was directed to the adviser, who responded with further written advice which Dr. Bennett swore that, having regard to his own knowledge of the facts, he regarded as "entirely favourable". In the printed matter subsequently published with Powerflex and PFXplus assertions were made that those who so published "acknowledged" and "respected"the copyright in DataFlex and that "Powerflex is not a copy of DataFlex". When in December 1989 Cory Casanave obtained the first published version of Powerflex from Australia, he undertook what he described as a preliminary examination of it, verified its compatibility with DataFlex and undertook no "close study" because at that time he did not think it to be "a threat to [DataFlex's] market to warrant taking expensive international legal proceedings". In August 1992, after a new version of DataFlex had been followed by a new version of PFXplus, Data Access instructed its attorneys to engage Australian solicitors to advise concerning a possible copyright infringement proceeding in this country.
After Dr. Bennett had given copies of his application development system to members of the Victorian DataFlex Users' Group for testing and report, Charles Casanave, the brother of Cory Casanave and President of Data Access, visited Melbourne in June 1989. At two functions for those interested in computing science Dr. Bennett and Charles (known as "Chip") Casanave met. Dr. Bennett deposed that he expected of Chip Casanave "either an offer to talk, or threats and demands". But Chip Casanave said nothing about Powerflex and he neither said nor did anything to suggest disapproval of what Dr. Bennett was doing. Thereafter there was no contact between Dr. Bennett and any senior representative of Data Access until October 1991 when Mr. Chip Casanave again visited Melbourne. At a function attended by both men Mr. Casanave said : "We need to talk"; and invited Dr. Bennett to have lunch with him at his hotel. Again Dr. Bennett deposes that he considered the possibilities that Mr. Casanave "might be going to buy us out, or threaten to take us to court, or to negotiate some sort of joint ventureship". Dr. Bennett's account of the luncheon meeting was:
"24.4In the event, the meeting was cordial and friendly, with little substance. We had lunch at his hotel in Queens Road, at a table for two. Pat Kloepfer was there for a time at another table, but did not take part in the discussions.
24.5During a period of about 3 hours we covered a wide range of issues. We discussed something of my motivation and method in creating PFXplus, and something of the origins of Dataflex.
24.6We discussed at some length the attitude Data Access Corporation took to Dataflex-compatible products. I said that I had heard of at least one and probably two previous Dataflex-compatible products (including one from Germany), which I had been told had been bought up and suppressed by Data Access Corporation. He responded that they had never bought up or suppressed any product and knew of no such products. He did not show any hostility to the idea of such products.
24.7He asked about my plans for PFXplus. I told him that we would complete the addition of a limited set of 3.0 compatible features into PFXplus, excluding the User Interface. Mostly we would be concentrating on adding new features of our own devising.
24.8The User Interface Management System (UIMS) was a portion of Dataflex new in 3.0, which comprises so-called object-oriented features (also known as OOPS). I told him that I believed that Data Access Corporation had made a mistake in its implementation of the UIMS and OOPS, that they would lose some customers to us because of this, and that PFXplus would never incorporate these features.
25.1I asked him about their plans for Dataflex. He told me that they were totally committed to the UIMS and OOPS line of development, so it seemed our paths would tend to diverge. On this we agreed.
25.2He told me that Data Access Corporation were currently exploring areas of possible co-operation with third party developers, and would be most interested to consider whether co-operation with us would be possible. I told him that we would be most interested in co-operating with them on any areas of mutual benefit.
25.3I suggested that it might be possible for us to find directions such that our products could compete and avoid coming into head-on competition. He rejected that idea, and told me that outside the scope of any possible co-operation, I should expect that Data Access Corporation would continue to compete with us vigorously in all market areas.
25.4We did not discuss legal advice we had received. We did not discuss the possibility of litigation.
25.5He specifically did not at any time give me any grounds to believe that Data Access Corporation regarded our activities as a breach of copyright or an infringement of their rights in intellectual property. On the contrary, his attitude and approach led me strongly to the point of view that Data Access Corporation were not planning to raise any objection to our activities, and saw some possibility for it being to their advantage.
25.6Chip made no claim or complaint about the methods we had used to develop PFXplus. His behaviour was entirely consistent with what I would expect for a meeting of any two direct competitors.
25.7We parted on friendly terms. He asked to be placed on our mailing list for promotional literature, and I agreed. In return he promised to do the same, and to take the issue of possible co-operation further.
25.8I heard no more and received no literature from him. After sending him our literature for about 4 months, we took him off the mailing list. I wrote to him and received no reply."
Thereafter there was no communication between the principal directors of the two companies until September 1992 when Mr. Chip Casanave again visited Melbourne. He and Dr. Bennett met at a meeting of the Victorian DataFlex Users' Group. Their meeting was cordial. Nothing was said by Chip Casanave to suggest any change in the attitude he had manifested a year before, except that he made no reference to the possibility of co-operation between the two companies. In early April 1993 Dr. Bennett received this facsimile transmission:
"To: David Bennett/Powerflex Corporation
From: Chip Casanave
Subject:What is our future relationship (or non-relationship)?
Date: 6 April, 1993
-----------------------------------------------
David:
We appear to be heading down similar paths toward the same market. I think you will agree that real growth and opportunity for us both lie in servicing existing customers and building new business outside the currently defined community. In this context, I believe that there are mutually beneficial gains to be had in determining:
·If you have an interest in a collaborative technical and/or marketing relationship with Data Access Corporation that positively leverages both companies' prospects for satisfying the market's needs. This FAX is confirmation that there is such an interest on our part.
·If our respective technologies, when coordinated or integrated, could produce a market expanding product suite. In other words, could our collective products technologies and capabilities form a resource that can support and expand the market more effectively than we could individually?
·What our attitudes are toward each other, based on the answers to the above. Can we be friends and colleagues or are we foes? Given the size of the opportunity offered in the market, the formidable competition and our respective sizes, I think prudence would dictate some form of cooperation.
If you concur that there could be benefits for both Powerflex Corporation and Data Access Corporation in defining these answers, then let's talk. I look forward to your reply."
There followed an exchange of such communications, in which expressions of interest in co-operation predominated and in which no very specific proposal emanated from either party. One such a communication from Dr. Bennett, dated 5 May 1993, included the following:
"We continuously receive information about DAC and its activities, and we are in contact with many people in the international Dataflex community. Recently we have heard a surprising number of rumours to the effect that DAC is planning aggressive action towards us, towards our friends or towards its own employees or ex-employees who might have been in contact with us.
I honestly don't know what to do about this. On the one hand, I would very much like to have normal relations with the people and companies we deal with, whether as friends or as competitors, and especially with yourselves. On the other hand, in this climate it is hard for us to be entirely open.
I think that you could do a great deal to ease the situation. You could for example, issue a clear denial that you have any plans of legal action against ourselves or our friends. You could make some public statement to the effect that we are exploring avenues of mutual co-operation (we would happily co-operate in that)."
Chip Casanave's reply, dated 10 May 1993, included the following:
"With regard to your fax of 5 May, let me try to put the prospect of legal process into perspective for you. To us it is simply a component of competition; it is an element of business. We have had a prosecutable legal position with regard to PFX for some time. It has been our choice not to proceed. As the competitive aspects of your products, and the competitive actions of you and/or your sales channels increase, then we will make various forms of competitive response. Let's be honest, you've `raised the bar' of contest between our products and companies lately and it is reasonable that we will respond. Any form of competitive response (legal or otherwise) is an alternative available to us."
Dr. Bennet's response was an analysis of the position in which each company was placed, particularly in relation to what he called "the crucial Windows market". There was no response to the passage I have quoted from Chip Casanave's transmission dated 10 May, except the following postscript:
"the rumours we heard had nothing to do with your taking legal action against us; that was my suggestion of the type of statement you might make. I am surprised you still contemplate such a pointless waste of resources."
There was no response by Chip Casanave, until in November 1993 the originating application and an Anton Pillar order in the proceeding were served.
Mr. Chip Casanave did not give evidence, nor was evidence adduced that he was unable to give evidence.
The respondents base on the facts stated in the foregoing paragraphs 22-25 and on certain further facts alleged a number of defences. It is convenient first to consider the defence that the things done which are alleged to have infringed the applicant's copyright were done with the implied licence of the applicant. (I call the contention a "defence", but acknowledge that the onus of proof is on the applicant : Avel Pty. Ltd. v. Multicoin Amusements Pty. Ltd. (1990) 170 C.L.R. 88 at 119-120.) The mere silence of Data Access in the face of what Mr. Cory Casanave learnt about Powerflex when he examined the system at the end of 1989 or early in 1990 cannot in my opinion be taken to signify a licence. There was no evidence that Dr. Bennett knew or believed that Powerflex had been subjected to any particular degree of examination by employees of Data Access. All he knew was that Data Access had obtained a copy of the work. His own published material accompanying each copy of the work proclaimed his "respect" for the copyright of which Data Access claimed ownership. Mr. Chip Casanave's cordial politeness and his failure to express any disapproval of what Dr. Bennett was doing in June 1989 does not lend any support to the suggestion of licence. Mr. Chip Casanave was known by Dr. Bennett not to be technically expert and all that was apparent to him was the claimed compatibility of the two systems in their functioning. When in October 1991 Dr. Bennett received Mr. Chip Casanave's invitation to lunch one of the possibilities he contemplated was that Data Access might, through Chip Casanave, be going to "threaten to take us to court," a state of mind not consistent with the implication of a licence. By the end of the lunch the natural inference to be drawn by one in the position in which Dr. Bennett has professed himself to be was, not that the respondents had been licensed by Data Access to do what would without that licence be an infringement of copyright, but that Data Access shared the opinion he professed to hold, that there had been no infringement of copyright by the respondents, or at least no act by the respondents which Data Flex was confident that the courts would hold to be such an infringement. Nothing thereafter was shown by the evidence to have occurred to cast doubt on the correctness of that inference until shortly before Dr. Bennett composed the facsimile transmission, dated 5 May 1993, which he sent to Mr. Chip Casanave, whose reply to that communication was quite inconsistent with an implication of a licence.
There are further circumstances which tell against implication of a licence by Data Access. In advertising material introducing Powerflex to professional program developers, whose patronage both companies earnestly strove to win, was included the following:
"We are sure you will be as excited as we are about this more favourable form of licensing, and we are confident that it will further complement your current use of DataFlex. This impressive product is fully compatible with your existing DataFlex data files and indexes and can compile your existing source code without modification in most cases. More importantly however, you can now market and sell your small low price applications using the same language you use for your larger projects. With our Professional Developer's Edition you no longer pay a royalty fee for each application that you sell. You instead pay a once only moderately priced licence fee.
........ ........ ........ ........ ........ .......
So why not break the runtime burden today?"
In another advertising brochure entitled "PowerFlex Product Brochure" appears the following:
"Break the DataFlex runtime barrier with POWERflex, Multiuser, Database.
........ ........ ........ ........ ........ .......
If you already develop programs in DataFlex, most of your programs can already be used with POWERflex without change. Since POWERflex compiles to fast threaded code, those programs will even run an amazing 2 to 20 times faster than they ever did under DataFlex! With either POWERflex professional or the Network Developer's Edition you can now eliminate forever paying for individual DataFlex Runtimes for every site you install your application. You instead pay a one time fee, leaving you free to sell and market your application unhindered."
Similar inducements were expressed in advertising of a later version of PFXplus which was published in response to a version of DataFlex numbered 3.00. The respondents were inducing persons who had purchased the DataFlex system to transfer their patronage to the PFXplus system in order to reduce substantially the amount of money payable to Data Access in licence fees. To the extent that the respondents were successful - and the degree of success increased during 1990, 1991 and 1992 - the applicant lost money which it would otherwise have gained. In those circumstances failure to threaten suit for infringement of copyright and suggestions of co-operation between the companies bespeaks not licence but fear of failure if suit were brought or a conviction that the trouble and expense of suing would be more onerous than the loss of licence fees.
The respondents pleaded that the applicant is precluded from relief for infringement of its copyright by laches and by reason of estoppel. I shall first consider the question of estoppel.
The allegation is made in the further amended defence that "the applicant is estopped from denying that at all material times there existed a licence to do the things which the Respondents did". I have already stated my conclusion that no such a licence is to be implied. I find that Dr. Bennett at no time believed that Data Access had in any way manifested, by any of its agents, any indication that the respondents might adopt the assumption that relations between the parties would be like those of licensor and licensee in relation to the copyright. Dr. Bennett was, as I find, at material times
(a)an expert in computer science;
(b)of a subtle intelligence apt to comprehend the conceptual and linguistic complexity involved in the application of copyright law in the field of computer science;
(c)opiniated and emotionally and intellectually committed to the exploitation of the extensive and challenging work he had expended, in and before 1989, on his application development system.
I do not accept Dr. Bennett's evidence that he regarded the legal advice he received in the middle of 1989 as "entirely favourable", having regard to his own understanding of what the processes were which underlay his development of his system. I am persuaded that, whatever his assessment of the probabilities of success in defence of an action for infringement of the copyright in Data Flex, he recognised, in the light of his own considerable intelligence and the advice he received, that anybody's assessment of those probabilities could not reasonably be reached with any strong confidence. He had sought and obtained what he believed to be expert legal advice. I am persuaded that he recognised that any expert legal advice on the same question which the applicant might obtain would almost certainly concede the impossibility of confidence in such an assessment. Dr. Bennett's experience of the world - and of the business of computer program development - led him, as I find, to reject as unfounded any supposition that may have occurred to him that anything in the behaviour of either Casanave gave an indication that the assumption could be adopted that relations between the parties would be like those of licensor and licensee. I am persuaded that he believed that they, too, had received expert legal advice that the question whether infringement had occurred could not be given a confident answer and that their complete silence on that subject signified no more than that they thought that a suggestion that infringement had, or may have, occurred was not a worthwhile tactic, until 10 May 1993.
The allegation is made that "the respondents have been encouraged to believe that no copyright existed in" the DataFlex programs. There is no evidence to support the allegation, which is of course contradicted by the respondents' public acknowledgment of the copyright.
It is alleged in the alternative that the applicants have been encouraged to believe that the applicant would not enforce its legal rights in relation to the copyright. When was that belief induced? No express evidence of the time of formation of the belief was given. In paragraph 25.5 of Dr. Bennett's affidavit which is set out in paragraph 23 of these reasons a belief is stated that "Data Access Corporation were not planning to raise any objection to our activities". That may have reference to planning for a limited time into the future. Ten months later, according to Dr. Bennett's affidavit, he "became aware that some copies of the Dataflex system were being sold with a new licence agreement which now prohibited reverse engineering and decompilation. I had expected that I might be one of the first recipients of the new licence agreement, and speculated as to what I would do if that were the case.... This did not happen. Although Data Access Corporation had an easy opportunity to supply my upgrades to Dataflex version 3.0 and then to version 3.01 under the terms of a new licence agreement which would prohibit me from using reverse engineering, they did not do so. This was fully consistent with the tolerant attitude and implied permission that had characterised our relationship since our first contact,". This passage may not be wholly consistent with a belief that the applicant would not enforce its rights in relation to the copyright. In oral evidence Dr. Bennett was asked:
"Did you form any belief as to what the intentions of the company were during this time?---The belief I formed was that they had decided not to seek a solution by legal means, that they had decided to (?no) action, and that they were at various times likely to be receptive to perhaps some co-operation, some joint venture, some way of working together, but there were mixed signals, I would have to confess that I was not - I had no clear idea of exactly what they would do, it was a fairly puzzling situation."
Earlier questions had defined "this time" as between 1989 and 1993. The reference to "mixed signals", in relation to the period which ended with Mr. Chip Casanave's facsimile transmission dated 10 May 1993 was evoked principally, or perhaps solely, by statements to Dr. Bennett by persons other than agents of the applicant. The evidence strongly suggested - and to an extent established - that, among people concerned with one or other or both companies or with one or other or both of the two systems, much rumour and report circulated about the applicant's attitude to the PFXplus system and those who were introducing it to the market. Accordingly I have not taken that reference as an admission by Dr. Bennett that he received "mixed signals" from agents of the applicant. On the whole of the evidence I am not persuaded that a belief, based on conduct of agents of the applicant, was ever formed by Dr. Bennett that the applicant would not enforce its rights in relation to copyright. For two years from April 1991 a Swiss company to which reference was made in evidence as Abacus provided funds to Powerflex Corporation Pty. Ltd. Abacus had been closely associated with the applicant, but wished to use the respondents' application development system. With the funds provided the respondents expanded their activities and formed connections with distributors to market PFXplus in several European countries and the United States of America. In his facsimile transmissions dated 5 may 1993 and 14 May 1993 Dr. Bennett does not hint at his having previously formed any belief that the applicant would not enforce its rights in relation to the copyright. I am persuaded that at all material times Dr. Bennett believed that an attempt to establish and enforce the copyright in curial proceedings was in the contemplation of the applicant as a possible course of action, and that the applicant's abstention from that course and from any reference to that course signified nothing but that, in all the circumstances from time to time between 1989 and May 1993, as they appeared to the applicant, the applicant judged that abstention to be in its best interest, and that one of the most important of those circumstances was the difficulty of predicting the outcome of such litigation.
That difficulty of prediction was greater for the applicant than for Dr. Bennett, as he believed. According to his evidence he had not decompiled DataFlex code, nor examined, for the purpose of developing PFXplus, the secret DataFlex source code, activities which he believed would be infringements of copyright and which would, if proved in the litigation the applicant might institute, greatly weaken his whole case, founded as it was to be - and was in the event - on the distinction between idea and expression. He knew himself, according to his evidence, to be innocent, but he could expect that the applicant would probably suspect, but not know, him to have been guilty, in those respects, and would be so much the more doubtful as to the outcome of the litigation. In the result the applicant's suspicions led it to seek the Anton Piller order which was served with the originating application.
If, contrary to my findings, Dr. Bennett had been induced by the conduct of the applicant's agents to believe that the applicant would not enforce its rights, yet I am not persuaded that it was the influence of such a belief which induced him to take the course he did and to cause the other respondents to take part in that course of action. In oral evidence Dr. Bennett said that, if in 1989, before he had started to market his system, he had received a solicitor's letter alleging infringement of the applicant's copyright and threatening legal action, "I would have been very worried and would have sought legal advice .... I can't believe that in any circumstances I would have proceeded to market this product .... I would have perhaps hoped to sell it to Data Access and gone and done something different." It was put against acceptance of that evidence that when these proceedings were instituted against them the respondents continued to develop and market PFXplus. But that is at a time when all the commercial realities had changed and curial exposition of the law of copyright in relation to computer programs had developed and the possibility of defences of the kind I am now discussing had appeared. No such a possibility existed in 1989. The time at which the influence on Dr. Bennett of conduct of the applicant's agents is to be considered is between the time when he met Mr. Chip Casanave in October 1991 and May 1993. I am not persuaded on the whole of the evidence that any belief induced in Dr. Bennett by conduct of the applicant's agents that the applicant would not enforce its rights made any substantial contribution to his perseverance in development and marketing of his system. Having persuaded himself to regard the legal advice he had received as favourable, if not "entirely favourable", and justifiably proud of his intellectual achievement in creating a system compatible with, and in several respects more attractive to users of such systems than, DataFlex, Dr. Bennett, as I find, did not at any time between 1989 and November 1993 rely for reassurance on any such a belief, nor would he have been deflected from the course he took during that period by any threat by the applicant to sue the respondents for infringement, if such a threat had been made.
The respondents allege that the applicant "is guilty of prolonged, inordinate and inexcusable delay in bringing this proceeding and seeking the relief claimed herein, and it thereby has caused or permitted the Respondents to believe, as in fact they did, that it did not intend to make the claim herein and in this belief the Respondents have acted to their prejudice and have otherwise been prejudiced."
The parties to this proceeding could at any time since 1989 have reasonably expected that the trial of such a proceeding would take at least eight of the ten days which the trial of this proceeding in fact occupied, that independent expert witnesses and at least one witness resident in the United States would be required, that the processes of discovery would be extensive, and that an appeal from judgment at trial was likely. The market within this country for systems such as DataFlex and PFXplus is a small part of the world market and the export of a substantial number of PFXplus programs was achieved only after a substantial time had elapsed. As I have found, the application to computer programs of the copyright law of this country has, during the period under consideration, been attended by uncertainty, as Mason C.J. observed in Autodesk Inc. v. Dyason (1993) 176 C.L.R. 300 at 303. I do not consider that the delay in bringing this proceeding has been, in all the circumstances, inordinate or inexcusable. And I have not been persuaded that the delay caused the respondents to believe that the applicant did not intend to institute at any time a proceeding for infringement, nor persuaded that such a belief influenced the respondents to take the course which they did take during the period of delay.
It is alleged in the further amended statement of claim that the respondents' infringements "were done flagrantly and with knowledge of the Applicant's copyright". Although the questions for trial did not involve determination of the relief to be granted, except by way of injunction, the issue as to whether the circumstances should attract an exercise of the discretionary power conferred by s.115(4) of the Copyright Act 1968 was treated by the parties as determinable now.
I find nothing in the circumstances to attract the exercise of that discretion. I find that Dr. Bennett believed at all material times that what he was doing did not infringe the applicant's copyright. How far he permitted his strong desire to market his system to influence his interpretation of the expert legal advice he received in 1989 I find it difficult to determine, but I am not persuaded that there was anything approaching the perverse in his reasoning to that interpretation. Further, it is in my opinion a consideration within the ambit of "other relevant matters" in s.115(4)(iii) that the directors of the applicant deferred until November 1993 the institution of this proceeding because they judged that deferment (and until May 1993 silence with respect to the infringement) best suited the applicant's economic interests. Neither they nor Dr. Bennett allowed a concern for the interests of those who were purchasing and using PFXplus during that period to drive them to seek a curial or an arbitral determination of the question they all knew to be attended by uncertainty.
Some submissions were made about the respective liabilities of the individual respondents. On the evidentiary material drawn to my attention and those submissions I am not prepared to make a determination of those questions, upon which I will hear the parties further. And I will hear the parties as to the orders which should be made. It will be ordered that further consideration of the proceeding be adjourned to a date to be fixed.
I certify that this and the 42 preceding pages are a true copy of the Reasons for Judgment of the Honourable Justice Jenkinson.
Associate
Dated: 9 February, 1996
Counsel for the Applicant : Mr. J.W.K. Burnside Q.C. and Mr. S. Le Grand
Solicitors for the Applicant : Stephens
Counsel for the Respondents : Dr. J.F. Bleechmore
Solicitors for the : Trumble Szanto Braham
Respondents
Dates of Hearing : 14, 15, 16, 17, 18, 21, 22, 28, 29 and 30 August, 1995
Date of Judgment : 9 February, 1996
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