Dixon Investments Pty Ltd v Hall

[1990] FCA 477

Re: DIXON INVESTMENTS PTY. LTD.
And: K. HALL and V. HALL
No. G214 of 1988
FED No. 477
Copyright
18 IPR 490

COURT

IN THE FEDERAL COURT OF AUSTRALIA

QUEENSLAND DISTRICT REGISTRY
GENERAL DIVISION
Lockhart(1), Spender(1) and Ryan(1) JJ.

CATCHWORDS

Copyright - Infringement - Builders' plan for project house - Whether respondent had infringed right of appellant to reproduce the work in a material form - whether there had been a reproduction of a "substantial part of a work" - Measure of damages.

Copyright Act 1968 - ss. 10(1), 14(1)(b), 21(3)(a), 31, 36, 71, 115(4).

HEARING

BRISBANE

#DATE 3:9:1990

ORDER

The appeal be dismissed.

The appellant pay the costs of the respondents of the appeal.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

JUDGE1

This is an appeal from a single Judge of this Court (Pincus J.) who held that the respondents had not infringed the appellant's copyright in a plan or drawing for a project house called the "Blackwood Games Plan" ("the basic plan"). The appellant is a builder of project houses in Queensland and produced the basic plan for the project house known as "Blackwood Games", an example of which was built as a "display home" at Mermaid Waters.

1. The respondents Kenneth Wayne Hall and Victoria Madeleine Hall are husband and wife. Mr. Hall was engaged at relevant times in cleaning up building sites for the appellant. The display home was built on one of those sites. The respondents built a house at Robina in Queensland which is similar to the display home at Mermaid Waters.

2. The basic plan was advertised in newspapers and included in an advertising brochure distributed by the appellant, so the public had access to it.

3. The appellant sued the respondents alleging that they had infringed its copyright in the basic plan. The basic plan consists of a perspective drawing of a Blackwood Games house and below it a drawing showing the location and nature of the walls, both exterior and interior viewed from above, the dimensions of most of the rooms, and some other points such as the location of built-in cupboards, bathroom fixtures and moveable furniture.

4. Pincus J. said that, if one ignored the drawings of the furniture other than what was apparently intended to be built-in, what was left was "a fairly conventional looking arrangement of rooms in a house of roughly rectangular shape". His Honour found that the final plan of the respondent's house looked rather similar to the basic plan.

5. His Honour posed the relevant test of infringement in this case as being whether it was established that the respondents had infringed the right of the appellant "to reproduce the work in a material form": ss. 31 and 36 of the Copyright Act 1968 ("the Act") which includes reproducing a two-dimensional work in a three-dimensional form (s. 21(3)(a)). His Honour said that the critical point in the case was whether there had been a reproduction of a "substantial part of a work" (s. 14(1)(b)).

6. Pincus J. said that the appellant was entitled to succeed if it could show that the house of the respondents was a reproduction of the basic plan or a substantial part of it. He said that the simpler and more commonplace the drawing in which copyright subsisted, the closer must be the adherence to it by the alleged infringer for liability to exist; and that in deciding whether there has been reproduction it is necessary to consider, not only how close the allegedly infringing material is to the copyright drawing, but the quality of what is said to have been taken.

7. His Honour found that there were many houses of about the same size as the one in issue here and with similar facilities including a bathroom for general use and an "en-suite" intended to be used by the occupants of the main bedroom, as well as a family or general purpose room. He said that, if one adheres to the idea of having a roughly rectangular shape with rooms all on one level, there is only a limited number of ways in which the rooms can sensibly be arranged and that here the bedrooms and bathrooms are along one side of the rectangle and the other rooms along the other side.

8. His Honour found that the respondents designed their house having at the outset close regard to the basic plan. He posed as the first question for him to consider whether the respondents' house is "properly described, not necessarily as identical with but as a reproduction or adaptation of" the appellant's plan, relying on a passage from the judgment of Diplock L.J. in Francis Day and Hunter Limited v Bron (1963) Ch 587 at 623.

9. His Honour engaged in a detailed comparison of the basic plan with the respondents' house which it is unnecessary for us to set out in detail. He said that the process of comparison was assisted by the expert evidence of two architects, one from each side, who gave evidence at the trial. His Honour preferred the evidence of the respondents' architect. He found that on one side there was simply a row of small bedrooms with a bathroom and laundry interpolated, but that there was a little more distinctiveness about the layout on the other side. He found that the particular arrangement of the full length glazed recessed walls in the living area side of the house as set out in the basic plan was "quite distinctive". He concluded, however, that to a person looking from the outside at the front of the respondents' house, which was an important aspect, it would look completely different from a house built in accordance with the basic plan. His Honour had the benefit of a view of the respondents' house.

10. His Honour considered the history of the development of the design of the respondents' house, though he expressed the view that in the end it was not of central importance. He found that the respondents had access to the basic plan, but he was not satisfied that they had access to any of the appellant's working drawings.

11. His Honour concluded that the design of the respondents' house derived originally from the basic plan and that Mrs. Hall had the advantage of an inspection by her of the display home at Mermaid Waters; but that copying of the display home itself was not part of the appellant's case. His Honour inferred that Mrs. Hall produced to a draftsman engaged by her husband and herself a plan which included certain features of the basic plan, that the draftsman then turned it into some draft plans and finally into a plan which was the one submitted to the local council for approval and to which the respondents' house was built.

12. His Honour found that the "direct inspiration" of the respondents' design was the basic plan, but that this was not sufficient in law to enable the appellant to succeed, relying upon Ownit Homes Pty. Limited v D and F Mancuso Investments Pty. Limited (1988) AIPC 90-488. He held that the respondents' house as constructed had sufficient differences of a genuine character from the basic plan not to constitute an infringement.

13. Pincus J. considered s. 71 of the Act which provides:
    

"For the purposes of this Act -

(a) the making of an object of any kind that is in three dimensions does not infringe the copyright in an artistic work that is in two dimensions; and

(b) the making of an object of any kind that is in two dimensions does not infringe the copyright in artistic work that is in three dimensions, if the object would not appear to persons who are not experts in relation to objects of that kind to be a reproduction of the artistic work."

1. His Honour said that although s. 71 was not argued before him he thought it had to be considered, but that the result of the case would have been the same whether or not he considered it. He found that the person of the kind mentioned in s. 71, whether or not armed with a suitable measuring device, on comparing the respondents' house as built with the basic plan would be unlikely to conclude that the house was a reproduction of the basic plan.

2. His Honour went on to assess damages in case the view he took of the facts on infringement was wrong. He said that if he had been of the opinion that the respondents' house or the plans for it constituted an infringement of the appellant's copyright, he would not have assessed damages on the basis of a licence fee likely to be charged, a basis frequently adopted in infringement cases; nor would he have awarded damages on the basis of a flagrant infringement as he did not think it ever occurred to Mrs. Hall that what she did was unlawful. His Honour found that there was no rational foundation for finding that the value of the appellant's copyright was diminished by the respondents' actions, and that it seemed likely that the proceeding was brought not because any loss was suffered, but because the appellant wished (quite reasonably from its own point of view) to discourage any unauthorised imitation of its houses or ideas that its houses embodied. His Honour said he would have awarded damages of fifty dollars.

3. Counsel for the appellant challenged on appeal both the finding of no infringement of copyright and the assessment of damages at fifty dollars. He submitted that, although his Honour identified the critical point in the case as being whether there had been a reproduction by the respondents of a substantial part of the basic plan, his Honour erred in answering that question in the negative in two ways. First, because having found that there were elements of distinctiveness in the basic plan, the learned primary Judge should have asked himself the question whether the reproduction of those distinctive elements, and not other elements, amounted to a reproduction of a substantial part of the basic plan. It was argued that, if this test had been applied, the answer had to be that there was infringement. The second error was said to be that his Honour distracted himself from this primary task by looking at detailed instances of points of similarity and dissimilarity between the basic plan and the respondents' plan and house including numerous features of no distinctiveness. What his Honour should have done, so it was submitted, was that, having identified the matters of distinctiveness in the basic plan, his Honour should have asked himself the question whether those elements, ignoring any elements of absence of distinctiveness, constituted a reproduction of a substantial part of the basic plan. Counsel's statement of the alleged second error is really a statement in different form of the alleged first error.

4. Counsel for the appellant submitted that his Honour's consideration of s. 71 was inappropriate because the section had not been pleaded by the respondents, the appellant did not have a fair opportunity to adduce relevant evidence on the point and his Honour's observations about s. 71 were irrelevant because he did not consider the section with particular reference to the points of distinctiveness.

5. We should say now that the course which his Honour took did not affect the result of the case, as his Honour himself said. Nor is the result of this appeal affected by the questions relating to s. 71. We therefore shall not consider it.

6. As to damages, it was submitted by counsel for the appellant that his Honour fell into error in assessing only fifty dollars damages; that a common measure of damages appropriate in a case of this kind is the amount of a notional licence fee for use of the infringing plans and that is the measure that should have been applied here. It was argued that it is not appropriate to reduce the sum awarded because part only of a plan is reproduced and that various factors are relevant in the assessment of damages in a case like this which his Honour did not take into account, namely, the following:
   

. the basic plan was very successful and of great value to the appellant;

. a licence fee for use of plans of the kind with which this case is concerned would be 5% of the cost of the house (approximately $70,000);

. an architect's fee for a house of this kind was 70% of 10.5% of the building cost;

. a draftsman would charge $500 to $1,000 to produce a plan for a house of this kind and that the draftsman who drew the respondents' plan, a Mr. Gibbs, was paid $200 for essentially converting a sketch plan with dimensions to scale drawings. Having regard to these matters it was submitted that the assessment of damages of fifty dollars was unreasonably low.

1. It was submitted for the respondents that his Honour did not err in awarding only fifty dollars damages. Some matters upon which reliance was placed to support this submission were the following:
   

. some aspects of the basic plan, but not others, were adopted by the respondents;

. almost all of what is in common with the basic plan and the respondents' house is stock, standard or commonplace; . there was no evidence that the value of the copyright in the basic plan had been diminished; . there was no suggestion that, if it had been made clear to the respondents that they had the choice of paying a fee or choosing another design, they would have paid the fee; . it was obvious that the respondents were building a house economically and it would be unlikely that they would have paid 5% for a design fee; and

. the infringement is not asserted to be flagrant so that additional damages of the kind to which s. 115(4) of the Act is directed would be inappropriate.

1. The first question is whether Pincus J. correctly found that the respondents had not infringed the right of the appellant to reproduce its copyright in the basic plan in material form because they had not reproduced a substantial part of the basic plan.

2. The requirement about a substantial part of a work being reproduced is found in s. 14(1)(b) of the Act which first became a statutory part of copyright law in the English Copyright Act 1911; but it was a requirement of the common law long before then.

3. It is well established that the phrase "substantial part" refers to the quality, rather than the quantity, of what is taken by the infringer : see Hawkes and Son (London) Limited v Paramount Film Service Limited (1934) 1 Ch 593; Ladbroke (Football) Limited v William Hill (Football) Limited (1964) 1 WLR 273 per Lord Pearce at 293; L.B. (Plastics) Limited v Swish Products Limited (1979) RPC 551; S.H. Hart and Co. Pty. Limited v Edwards Hot Water Systems (1985) 159 CLR 466.

4. In determining whether the quality of what is taken is a substantial part of the copyright work various circumstances are relevant. A significant element is the importance which the alleged substantial part bears in relation to the work as a whole. If it is a vital or material part, even though it may be only a small part of it in quantity, it may nevertheless be sufficient: see Blackie and Sons Limited v The Lothian Book Publishing Company Pty. Limited (1921) 29 CLR 396. In G. Ricordi and Co. (London) Limited v Clayton and Waller Limited (1928-35) MacG. and McC. Cop. Cas. 154 (Ch) it was held at 162 that eight bars of a particular air may in some circumstances form a substantial part of that air, although Luxmoore J. held that on the facts of the case the taking of eight bars which formed part of a particular motif in Puccini's "Madam Butterfly" did not constitute infringement.

5. It is always a question of judgment in each case whether the parts taken from the work in which copyright subsists represent the taking of a substantial part of the work: S.H. Hart and Co. Pty. Limited v Edwards Hot Water Systems (supra). The question of what is a substantial part of a work may involve fine questions of degree. Bauman v Fussell (1978) RPC 485 is an interesting example. There will be infringement if the defendant's work bears a similarity to a substantial part of the plaintiff's work even if it differs markedly in other ways. It is not necessary that there be a substantial similarity overall between the two works: Bauman v Fussell.

6. Sometimes perspective or the balancing of features may represent a substantial part of the plaintiff's work in which copyright subsists; and if they are substantially reproduced in the defendant's work then the latter will infringe: see Krisarts S.A. v Briarfine Limited (1977) 3 FSR 557 a case concerning the plaintiff's paintings of well-known views of London.

7. The subject of reproduction of a work in which copyright subsists was discussed by the High Court in S.H. Hart and Co. Pty. Limited v Edwards Hot Water Systems (1985) 159 CLR 466. Gibbs C.J. said at 472:
   

"The notion of reproduction, for the purposes of copyright law, involves two elements - resemblance to, and actual use of, the copyright work, or, to adopt the words which appear in the judgment of Willmer L.J. in Francis Day and Hunter Ltd. v Bron ... 'a sufficient degree of objective similarity between the two works' and 'some causal connection between the plaintiffs' and the defendants' work'. Lord Reid said in Ladbroke (Football) Ltd. v William Hill

(Football) Ltd. ...:

'Broadly, reproduction means copying, and does not include cases where an author or compiler produces a substantially similar result by independent work without copying. And, if he does copy, the question whether he has copied a substantial part depends much more on the quality than on the quantity of what he has taken.'

... In the same case, Lord Evershed said ... 'that what amounts in any case to substantial reproduction ... cannot be defined in precise terms but must be a matter of fact and degree'."

1. Wilson J. said at 482:
   

"Reproduction does not require a complete and accurate correspondence to a substantial part of the work. As Megarry J. pointed out in British Northrop Ltd. v Texteam Blackburn Ltd. ..., when speaking of the concept of reproduction expressed in the Copyright Act 1956 (U.K.):

"... section 48(1) (the English counterpart to s. 21 of the Act) necessarily indicates that 'reproduction' is not confined to a copy of complete precision, from its use of the words 'version', 'converting' and 'form', quite apart from the inevitable differences between two dimensions and three. Furthermore, I do not think that the word 'reproduction', in its normal use, carries any necessary implication of exactitude of likeness between that which is reproduced and the reproduction itself. Not every reproduction is a perfect reproduction ..."

In my opinion, the question whether there has been a reproduction is a question of fact and degree depending on the circumstances of each case. The emphasis upon quality rather than quantity directs attention to the significance of what is taken."

1. The courts are less ready to find infringement when the subject matter of the work in which copyright subsists and its representation are of a simple and straightforward nature. This is well illustrated by Kenrick and Co. v Lawrence and Co. (1890) 25 QBD 99. The plaintiff claimed copyright in a card depicting a representation of a hand holding a pencil in the act of completing a cross within a square, for the purpose of guiding illiterate voters in the marking of their ballot papers and alleged that this had been infringed by a similar drawing made by the defendant. Wills J. found for the defendant and said that in essence that the plaintiff's drawing was so simple that it could not be the subject of copyright.

2. The law of copyright prevents reproductions of architects' or builders' plans and the reproduction of other plans or houses built in accordance with the plans in which copyright subsists. The law does not prevent the development and expansion of ideas and the furtherance of architectural concepts. The determination of the dividing line between ideas and the form in which they are expressed sometimes raises a fine point and a matter of degree. This fine line was discussed by Street J. in Ancher, Mortlock, Murray and Woolley Pty. Limited v Hooker Homes Pty. Limited (1971) 2 NSWLR 278. See also Half Court Tennis Pty. Limited v Seymour (1980) 53 FLR 240 per Dunn J. at 251; Hay and Hay Construction Co. Limited v Sloan (1958) 12 DLR (2d) 397, a decision of the High Court of Ontario.

1. It is more difficult to prove infringement of copyright in a plain building than in one showing marked originality. Copinger said at paragraph 262:
   

"An architect, who has erected a facade showing six windows and a door, clearly could not complain of another building showing the like number of windows and doors, for each architect may have drawn from common sources. But if his plain building has been servilely copied down to the smallest detail, there seems no good reason for depriving him of the right to complain. Slight differences between buildings of no marked originality will prevent them from being held to be copies of each other, which would not be the case if the buildings were of an original character."

1. The basic plan is an "artistic work", an expression defined by s. 10(1) of the Act as meaning, amongst other things, a drawing, whether the work is of artistic quality or not and a building, whether the building is of artistic quality or not. A "drawing" is defined in the same sub-section as including a diagram, map, chart or plan.

2. The Ownit Homes Case, a decision of the Full Court of the Federal Court (Fisher, Pincus and Einfeld JJ.) also concerned copyright in a display home built by the first appellant and designed by a draftsman in the employ of the second appellant. The respondents obtained brochures containing details of the house and then instructed a draftsman to design them a house like the one in the brochures. The draftsman did this and showed a design incorporating some of the basic concepts of the plaintiff's "Envoy Series 2 House". Although the learned trial Judge listed similarities and dissimilarities, the Full Court held that he had decided the issue of similarity on a qualitative rather than a quantitative basis, and that the alleged infringing work adopted no more than the concept or idea behind the copyright and did not constitute a breach of copyright.

3. We discern no error on the part of Pincus J. in his finding that there had not been a reproduction by the respondents of a substantial part of the basic plan. His Honour set out in his reasons a list of the similarities and dissimilarities between the basic plan and the design of the respondent's house; but we are satisfied that he considered the question of similarity on a qualitative rather than a quantitative basis. We have already referred to the findings of his Honour and the conclusion which he reached in consequence of those findings that the respondents had not infringed the appellant's copyright in the basic plan. His Honour correctly posed the basic question as being whether there had been a reproduction of a substantial part of the basic plan. His Honour looked at the various elements in the basic plan to discern its essential features. It is true that he found that the "particular arrangement of the glass wall in the basic plan is quite distinctive"; but he did not find that this "quite distinctive" feature was a substantial part of the basic plan as that expression is understood in the authorities. He considered the essential features of the basic plan in relation to the plan as a whole and concluded that the respondents had not reproduced a substantial part of the work. His Honour did not, as we read his reasons for judgment, apply the impermissible test of asking whether there was a substantial similarity overall between the basic plan and the respondents' house. It is significant that the basic plan was of a project house and was of a relatively simple kind, notwithstanding what his Honour described as some "quite distinctive" features.

4. The case is illustrative of the fine line between the protection given by copyright to artistic works, which include plans, but not to the ideas which created them.

5. We see no basis for disturbing his Honour's finding that there was an absence of a sufficient degree of objective similarity between the basic plan and the design of the respondents' house.

6. When his Honour proceeded to look at the second of the two elements involved in the notion of reproduction for the purposes of copyright law (see S.H. Hart and Co. Pty. Limited v Edwards Hot Water Systems per Gibbs C.J. at 472), namely, whether there was actual use of the basic plan or some causal connection between it and the respondents' house, his Honour concluded that the design of the respondents' house derived originally from the basic plan and that Mrs. Hall had taken advantage of her inspection of the Mermaid Waters display home. After stating that that was not an element of copying that was alleged in this case by the appellant, his Honour held that the respondents' house as constructed had sufficient differences of a genuine character from the basic plan not to constitute infringement. In our opinion these findings of his Honour have not been shown to be erroneous.

7. The question of damages did not strictly arise before his Honour in view of his finding of no infringement. Nor does that question necessarily arise on appeal, but we shall deal with it as it was fully argued before us.

8. We agree with his Honour that this is not a case in which damages should be assessed on the basis of a licence fee likely to be charged by the copyright owner and that it is not a case to award damages on the basis of flagrant infringement. However there was evidence before his Honour that a draftsman would charge between $500 and $1,000 to produce a plan for a house of the kind with which this case is concerned and that Mr. Gibbs, the draftsman who was engaged by the respondents to draw the plans for their house, was paid $200 essentially for converting a sketch plan given to him by Mrs. Hall into scale drawings.

9. In all the circumstances in our opinion the assessment of damages of fifty dollars was unduly low. Damages of five hundred dollars would have been an appropriate award.

10. We would dismiss the appeal with costs.