Fire Nymph Products Ltd v Jalco Products (WA) Pty Ltd

[1983] FCA 85

Re: FIRE NYMPH PRODUCTS LIMITED AND ALPEN HOLDINGS PTY. LTD.
And: JALCO PRODUCTS (W.A.) PTY. LTD.
Re: KENT HEATING LTD. AND ALPEN HOLDINGS PTY. LTD.
And: JALCO PRODUCTS (W.A.) PTY. LTD. (1983) 74 FLR 102
Nos. WA G1 AND G11 of 1982
Trade Practices - Copyright and Designs - Trade and Commerce

COURT

IN THE FEDERAL COURT OF AUSTRALIA

WESTERN AUSTRALIA DISTRICT REGISTRY
GENERAL DIVISION
Toohey J.(1)

CATCHWORDS

Trade Practices - metal, woodburning fireplaces - copyright - whether substantial reproduction - non-expert defence - application of artistic work as individual design without registration of design - misleading and deceptive conduct - passing off - injunction - delivery up of products - damages - appropriate relief

Trade Practices Act 1974, s.52

Copyright Act 1968, ss.71, 74, 77, 115(2) and 116(2)

Designs Act 1906, s.18

Copyright and Designs - Alleged infringement of copyright in drawings and brochures by manufacture of metal wood-burning fireplaces - Whether manufacture a substantial reproduction of copyright material - Copyright Act 1968 (Cth).

Copyright and Designs - Infringement - Artistic work - Non-expert defence - Whether drawing showing three dimensions is "artistic work . . . in two dimensions" - Copyright Act 1968 (Cth), s. 71(a).

Copyright and Designs - Infringement - Artistic work - Design based on functional characteristics - Design not registerable before 1 April 1982 - Whether defence of "corresponding design" available - Whether products and parts functional - Copyright Act 1968 (Cth), s. 77 - Designs Act 1906 (Cth), s. 18.

Trade Practices - Consumer protection - Similar products causing confusion in minds of consumers - Products clearly labelled - Whether misleading or deceptive conduct - Trade Practices Act 1974 (Cth), s. 52(1).

Trade and Commerce - Passing off - Similar products causing confusion in minds of customers - products clearly labelled - Whether a misrepresentation as to origin of products.

HEADNOTE

The first and second applicants designed, developed and manufactured metal wood-burning fireplaces which were marketed in Australia. The respondent, whose business included the manufacture and sale of fireplaces, decided to expand its activities in that field. It took measurements and made sketches of the applicants' products and had access to brochures for heating units produced by several companies including the applicants, but at no stage did it have access to the applicants' drawings or technical information. The respondent proceeded to manufacture and sell a range of fireplaces which the applicants alleged were copies of their own products. The applicants claimed that in making sketches of their products, in using their brochures, and in manufacturing similar fireplaces, the respondent breached the applicants' copyright in the drawings and brochures. The respondent denied breach of copyright and, alternatively, relied on the defence that, inter alia, its fireplaces would not appear to a non-expert to be a reproduction of the drawings, a defence provided by s. 71(a) of the Copyright Act 1968 (Cth).

The respondent also relied on s. 77 of the Act which permits the reproduction of an article where a "corresponding design" had been applied industrially by the copyright owner, provided the reproduction was within the scope of the copyright in the corresponding design if the corresponding design had been registered under the Designs Act 1906 (Cth). The applicants argued that their products' designs served a functional purpose and were incapable of registration under that Act at the relevant time which was prior to the introduction of s. 18 into the Act enabling registration of function-based designs.

The applicants also claimed that the respondent's conduct was deceptive or misleading to the public thereby infringing s. 52(1) of the Trade Practices Act 1974 (Cth), and also constituted the tort of passing off.

The applicants sought delivery up of the offending products, damages, and injunctions against the respondent.

Held: (1) Although the very making of sketches by the respondent from examination of the applicants' products and brochures relating thereto may have constituted breaches of the applicants' copyright, it was not conduct which of itself caused any damage to the applicants. Damage was alleged to have been caused by the respondent's production and sale of similar products, and breach of copyright must therefore be tested by reference to the respondent's products.

(2) There was no infringement of copyright unless what resulted was a substantial copy of the applicants' drawings or products for which copyright was claimed, but the concept of substantial reproduction does not demand that the product complained of be identical in every respect.

Ladbroke (Football) Ltd v. William Hill (Football) Ltd (1964) 1 WLR 273 at 293 per Lord Pearce, referred to.

(3) (a) The respondent's products complained of by the first applicant lacked in appearance and function a substantial copying of the latter's product, and therefore there was no breach of the latter's copyright in its drawings and brochures.

(b) One of the respondent's products complained of by the second applicant possessed similarities of external and internal design to the latter's product that were too strong to be explained on the grounds of coincidence, and there was a breach of the latter's copyright in its drawings and brochures. However, the other of the respondent's products contained some striking differences, and there was no breach of copyright as regards that product.

(4) The second applicant's drawings, including those showing height, width and depth on the one drawing, were on paper and must therefore be regarded as being in two dimensions for the purpose of determining whether the "non-expert" defence in s. 71(a) of the Copyright Act 1968 has been made out.

Merchant Adventurers Ltd v. M. Grew & Co. Ltd (1972) Ch 242 at 255 per Graham J., referred to.

(5) In respect of the respondent's product which was in breach of the second applicant's copyright, it has not been demonstrated that, on a comparison of the applicant's drawings and the respondent's product, the product would not appear to a non-expert to be a reproduction of the drawings. Therefore the defence based on s. 71(a) of the Copyright Act 1968 has not been made out.

Ogden Industries Pty Ltd v. Kis (Australia) Pty Ltd (1982) 2 NSWLR 283 at 289-290 per Kearney J., applied.

(6) Section 18 of the Designs Act 1906, which permits registration of a design based on some functional characteristic, came into force on 1 April 1982 by which time the second applicant had sold a large quantity of the products in question the result of which was that the applicant's designs were not registrable under that Act because of the operation of s. 77 of the Copyright Act 1968 and the complementary provisions of the Designs Act 1906 itself. In this situation, the operation of s. 77 of the Copyright Act 1968, permitting the reproduction of an article within the scope of the copyright in the "corresponding design", should be considered as if s. 18 of the Designs Act 1906 had no application.

(7) The second applicant's product, reproduction of which involved breach of copyright by the respondent, was a functional unit and all its components, including those with a design aspect, were functional. As the design of that product was not capable of registration under the Designs Act 1906 at the relevant time, the defence based on the respondent's application of a "corresponding design" under s. 77 of the Copyright Act 1968 cannot succeed.

(8) The evidence went no further than establishing that there may have been misunderstanding or confusion in the minds of consumers causing them to wonder whether the two products came from the same source. That is not enough to render the respondent's conduct misleading or deceptive or likely to mislead or deceive in terms of s. 52(1) of the Trade Practices Act 1974 particularly as it was possible, on reasonable inspection, to discern from labels the identity of the products here in question.

Parkdale Custom Built Furniture v. Puxu Pty Ltd (1982) 56 ALJR 715, referred to.

(9) The claim based on passing off fails because the evidence did not establish a misrepresentation in the sense required by the authorities. The respondent did not offer, intentionally or otherwise, its products as those of the applicants.

Warnink v. Townend and Sons (Hull) Ltd (1979) 3 WLR 68 at 74-75 per Diplock L.J.

HEARING

Perth, 1982, October 5-8; December 8-10; 1983 February 14-16; May 5.

#DATE 5:5:1983

APPLICATIONS.

Applications for injunctions to restrain the respondent from manufacturing and selling products alleged to be in breach of the applicants' copyright in certain artistic works, for damages for the alleged breach, for relief under the Trade Practices Act 1974 against the respondent for alleged misleading or deceptive conduct in contravention of s. 52(1) of that Act, and for damages and relief for conduct of the respondent alleged to constitute passing off.

R. J. Meadows, for the applicants.

A. J. Templeman, for the respondent.

Cur. adv. vult.

Solicitors for the applicants: Muir Williams Nicholson.

Solicitors for the respondent: Stone James Stephen Jacques.

F.P.C.

ORDER

1. Each application stand for judgment on a date to be fixed.

2. Not less than 3 days before motion for judgment the solicitors for the applicants in WA G11 of 1982 lodge with the District Registrar and serve on the solicitors for the respondent a minute of the judgment for which they intend to move in that application.

3. Not less than 3 days before motion for judgment the solicitors for the respondent lodge with the District Registrar and serve on the solicitors for the applicants in WA G1 of 1982 a minute of the judgment for which they intend to move in that application.

ORDER

Orders accordingly.

JUDGE1

This litigation is about metal fireplaces, wood burning fireplaces.

There was no order for consolidation of the two actions but, at the request of the parties, I agreed to hear them together. They raise common questions of law and to some extent of fact though the applicants' products are different from each other.

It is convenient to deliver one set of reasons for judgment, drawing a distinction between the two applications where distinction needs to be drawn.
THE APPLICATIONS

The first application concerns Fire Nymph Products Limited ("Fire Nymph"), a New Zealand company; Alpen Holdings Pty. Ltd. ("Alpen"), a West Australian company; and Jalco Products (W.A.) Pty. Ltd. ("Jalco"), also a West Australian company.

The second application concerns Kent Heating Ltd. ("Kent"), a New Zealand company; and Alpen and Jalco, already mentioned.

Although Fire Nymph and Kent are New Zealand companies, they are not connected in any way. They do however distribute their products in Western Australia through Alpen. They distribute their products elsewhere in Australia but no other distributor is involved in these proceedings.

In or about 1977 Fire Nymph designed, developed and manufactured a metal fireplace which is sold under the name "Alpine". It has marketed those fireplaces in New Zealand since 1978, in New South Wales and Victoria since July 1979 and in South Australia and Western Australia since early 1980. Fire Nymph contends that its fireplace has a distinctive appearance and design and an unique interior system; that its product has become widely known in Australia as a result of advertising and promotion; and that the Alpine fireplace is distinctive in appearance and design, readily recognizable by members of the public as Fire Nymph's product.

Fire Nymph claims that in or about December 1980 Jalco copied the design of the Alpine fireplace and since then has, in Australia, manufactured and marketed fire-places under the names "Nordanse" and "Nordess", which are almost identical in design, dimension and appearance to the Alpine fireplace so that the public has been led to believe that Nordanse and Nordess are Australian versions of Alpine. Jalco denies those allegations.

In or about 1978 Kent acquired a licence to manufacture and distribute throughout New Zealand and overseas a log burning heater known as the "Kent Log Fire". In 1979 Kent designed and began manufacturing a variation of the Kent Log Fire known as the "Kent Tile Fire". Kent has been marketing its heaters in Australia since 1978. The essential difference between the log fire and the tile fire is that the former is inbuilt while the latter is freestanding.

Kent contends that its log fire and tile fire are distinctive in appearance and design, readily recognizable by members of the public as its products, and that through advertising and promotion those products have become widely known in Australia. It alleges that in or about November 1981 Jalco copied the design of the log fire and tile fire and proceeded to manufacture and market heaters under the names "Home Fire Inbuilt Model" and "Home Fire Free Standing Model". Kent claims that the former is almost identical in design, dimensions and appearance to the log fire and that the latter is almost identical to the tile fire.

In the first application Fire Nymph and Alpen, and in the second application Kent and Alpen, seek relief against Jalco by way of injunction, damages and the delivery up of offending products. They rely upon three causes of action - breach of copyright, passing off, and misleading and deceptive conduct under the Trade Practices Act 1974. The claims for breach of copyright are brought only by Fire Nymph and Kent; Alpen makes no claim in that regard.
THE EVIDENCE

Much evidence, oral and written, was adduced by the parties and it is appropriate now to consider aspects of that evidence in regard to each of the applications.
DEVELOPMENT OF FIRE NYMPH PRODUCTS

Norman Wilkinson has been the managing director of Fire Nymph since its incorporation in 1974. He described how, after manufacturing some models which have now been discontinued, the company produced the Alpine 900 and the Alpine 700. The former is slightly larger than the latter, the numbering being descriptive of the width of each unit. The earlier models produced by Fire Nymph were open fireplaces and the intention in developing the Alpine was to combine the notion of an open fireplace with that of a high performance slow combustion heater. The open fireplace appeals to many people but it is inefficient. What Fire Nymph was seeking to achieve was a fireplace with glass doors, giving some of the appearance of an open fire with the efficiency of a slow combustion burner. Folding back the doors emphasises the aspect of open fire, though at the expense of efficiency.

A succinct description of the Alpine, borrowed from the report of Dr. J.J. Todd whose evidence is referred to later in these reasons, is that it is an enclosed non-airtight heater with a grate, ash pan, flue damper, glass panelled doors and multiple skins to reduce surface temperatures. Its external appearance is characterised by large glass doors, glass side panels and a sloping hood above the doors.

Asked to identify the functional features of the Alpine, Mr. Wilkinson referred to the controlled entry of air under the grate and over the ash to pre-heat the ash pan chamber, and to the grate itself which is of cast iron to cope with different fuels (wood and coal). Also significant is the combustion chamber. In earlier experiments Fire Nymph found that the heat would go directly up the chimney so it sought to have the surface area of the top of the fire-box exposed to the heat. A backing plate behind the grate was designed to do this. But this had the effect of rolling smoke down on to the glass doors and dirtying them. To overcome this the company designed a smoke shelf at the top of the combustion chamber. This directed the smoke away from the glass doors. Mr. Wilkinson added :

". . . the flue is actually overset behind the back of the fire-box. That allowed us to have more room to the surface area in the front and eventually allowed us to use a ducting system up the back which would help keep the rear wall cool. I believe that is unique with our fireplace".

As to the damper arrangement, he mentioned that normally in a fireplace the damper is operated with a handle beside the flue. In the case of the Alpine, to avoid the situation of a control at the top where there was a hot air outlet, the control was brought down to the front of the unit. The damper unit is a separate unit that can be removed and replaced if necessary.

Asked about the 'skin' of the fireplace, Mr. Wilkinson answered :

"When we came to develop the Alpine we found . . . the heat rise was quite dramatic within the unit and we found that we had to devise a second type of ducting system within the unit to form double flows through to protect the outside skin. We achieved this and we have, to my knowledge, the only fireplace with protected copper on the outside, it is protected by a lacquering - except for of course, another one in court at the moment". This was a reference to the Jalco Nordess tendered in evidence.

Other less significant features were described by Mr. Wilkinson. There are side covers of a particular configuration to balance the large ashpan in the base. There are runners. There is an airflow underneath the unit to protect the floor, and the airflow up through the unit is related to the design of the base. There is on top of the unit a guard or screen to protect children from the flue and also to protect the wall at the back of the unit.
DEVELOPMENT OF KENT PRODUCTS

Robert Noel Lockhart has been the managing director of Kent for 17 years. He is a qualified engineer. Mr. Lockhart described how Kent began as a small company making oil fired heating equipment. At the time of the oil crisis, he said, "the market crashed quite dramatically for oil heating and we switched to solid fuel heating and we have built up quite a substantial business now in wood-burning heating".

Mr. Lockhart estimated that Kent has about 80% of the New Zealand market for wood-burning stoves and about 20% of the Australian market. It distributes and sells to the United States, Canada, Europe and Chile.

He described the development of Kent's wood-burning appliances. In the 1960's a New Zealander, Anthony Barker, was working on the idea of a wood-burning appliance. Mr. Barker had a technical background in chemistry. He had developed prototypes in which Kent was interested but which it felt were not yet at a marketable stage. Kent entered into an agreement with Barker so that, building on his ideas, the company could develop a marketable product. In return Barker received money under a written agreement.

The Kent log fire and tile fire function in this way. Air for combustion flows in through the top of the unit, changes from white to blue and flows down inside the door. This has the dual effect of keeping the door glass clean and at the same time preheating air for combustion. Through a natural draught, the system is connected to a flue which develops a negative pressure inside the heater causing air to be induced into the heater. The air flows to the bottom of the heater and circulates through the wood. Gases then circulate within the primary combustion chamber, immediately above which is a secondary burning chamber and a baffle. The secondary chamber serves to complete the combustion of the wood.

Wood is composed of about 80% volatile material and about 20% solid material; the volatile material has a very high energy content. In an ordinary open fireplace the smoke goes up the chimney and that heat and accompanying energy are lost. In the Kent units the volatile material is burned almost completely, through a combination of primary and secondary combustion chambers.

Immediately below the flue there is a bypass damper arrangement which can be opened and closed. It is opened when the heater is first lit and the gases then bypass straight up the chimney. After the heater warms, up the bypass damper may be closed and the only way out for the gases is through the secondary chamber where the temperature is elevated and complete combustion occurs. The bypass damper is also used when refuelling the heater. When the door is open the damper opens at the same time; this ensures that the flame will not come through the door but will pass up through the chimney, thereby operating as a safety device.

Asked to describe the principal functional characteristics of the Kent design, Mr. Lockhart answered :

"The main functional characteristics are a sealed combustion chamber with a door which will ensure that the only air which can be admitted is through the air inlet and in our case it is shown at the top. The second is the deflector which deflects the air down inside the glass keeping the glass clean and ensuring that a visual flame is there all the time. The third is the secondary chamber which permits the gases to burn completely. The fourth one would be the bypass damper arrangement inside the secondary chamber, isolating it from the primary chamber".

Mr. Lockhart stated that at the time the Kent units were being developed there were no other heaters, of which he was aware, having these functional characteristics. In terms of wood-burning heating applicances, the most common was the open fireplace. There were some sealed units, mainly coal burning, which had refractory linings and cast iron grates, some with solid doors and some with doors with small glass apertures. There was the Scandanavian type of cast iron stove or pot bellied stove. Also there was a canopy type freestanding fireplace.

According to Mr. Lockhart, what Kent was seeking was a heater which could be used as an insert into a fireplace or as a freestanding heater. The company was looking at a heater that could burn natural timber efficiently; that could be used for cooking and heating water to some extent, and that contained a large combustion chamber holding sufficient wood to enable the heater to operate overnight.

The first log fire produced commercially by Kent was in 1978 and the first tile fire was in 1979. The log fire was generally available in Australia from 1979 onwards and in early 1980 the tile fire was introduced to this country.

Kent's heaters have not remained identical in design since they were first manufactured. Mr. Lockhart expressed the view that although there had been some changes, with the tile fire it would be very difficult to detect them. The log fire has changed in appearance but the original unit is still in production to meet requests made from time to time.

Although they function in a similar way, the log fire and tile fire are not alike in appearance. The combustion chamber of the log fire is of plate steel and once installed what is visible is a metal front with glass door and grille above. The freestanding tile fire is rectangular with ceramic tiles on each side. It has a single door with glass panel and a patterned perforated metal grille on top. The flue is of course visible.
DEVELOPMENT OF JALCO PRODUCTS - EVIDENCE

Jalco is a West Australian company, in business for more than 30 years. It has manufactured a wide range of products including bathroom cabinets, kitchen canopies, flue kits and fireplaces. It was described by its managing director, Richard Pangbourne Bird, as a "general sheetmetal jobbing-type company".

Mr. Bird has been the managing director of Jalco for about 3 years; during that period Jalco began to manufacture the units which have given rise to this litigation.

The manufacture of fireplaces and flue kits is the most substantial part of Jalco's business; it was estimated by Mr. Bird at 65% to 70%.

In 1980 Jalco made a decision to get more involved in the solid fuel heating industry because it was believed to have growth potential. The company spent a lot of time and money developing new products.

A brochure tendered in evidence (exhibit 60) shows the range of Jalco heating products being offered for sale in 1981. There are a number of fireplaces. Some are open and a few, the Nordess and Nordanse in particular, have doors.

The brochure contains a sketch showing the outline of an appliance and a number of arrows. Mr. Bird explained that the sketch was intended to demonstrate "the flow of convected air around an internal fire-box and out into the room at the top of the fire-box". He further explained that a number of the heaters shown in the brochure embodied that principle as did other heaters which did not appear but which were manufactured by Jalco and marketed through other companies.

According to Mr. Bird, Jalco came to be involved in the development of the Nordanse and Nordess in this way. Jalco was selling fireplaces in other States and in particular to a company in South Australia. One of the proprietors of that company rang Mr. Bird one day to say that he had in his premises a fireplace called the Fire Nymph and suggested that Jalco look at it. In August 1980 Jalco received from South Australia what was referred to as an Alpine Nymph. Mr. Bird described the unit as similar to the Fire Nymph tendered in evidence. He said that he was not impressed with the appearance of the Fire Nymph but it was put in Jalco's showroom and much to his surprise it was sold rather quickly. However, before it was sold Mr. Bird asked one of Jalco's senior employees, Mr. Baldwin or Mr. Davis, to examine the unit. Mr. Baldwin is the works manager of the company; he is a sheetmetal worker by occupation and has been employed by Jalco for over 20 years. Mr. Davis is also a sheetmetal worker and he has been employed by Jalco for nearly 20 years.

Mr. Bird did not think that the Fire Nymph unit was dismantled by the company's employees but steps were taken to get hold of some brochures. According to Mr. Bird :

"We studied it primarily to find out whether the design of the product was registered, whether there were any patents on it or anything of that nature. Having sought legal advice on this I then suggested, through our methods of production, that we produce something similar to it".

Notwithstanding Mr. Bird's expressed concern as to whether any patent existed in respect of the Fire Nymph and the consultation of a patent attorney, his investigations were cursory. Apart from the attorney's examination of the brochure itself to see whether any mention was made of a design registration or patent, no steps by way of search or otherwise were taken.

Jalco then began the development of the Nordanse and Nordess appliances, experimenting with prototypes. It was just before Christmas 1980 that, In Mr. Bird's words, "we finally came up with a product that worked".

Mr. Bird himself played little part in the development of the Nordanse and Nordess. This was left mainly to Mr. Baldwin, from the design viewpoint, and to Mr. Davis, on the construction side. The first units built had straight tops. Mr. Baldwin thought that it would be more aesthetically pleasing if the top was scalloped as had been other units built by Jalco over the years. Nordanse was the name given to the unit as first designed; with the scalloped top it was called Nordess. The latter was so clearly more acceptable to buyers that Jalco ceased making the Nordanse about February or March 1981.

It was not suggested by Jalco that there was any difference between the Nordess and Nordanse produced for sale other than the shape of the hood or canopy.

The production of Jalco's inbuilt and freestanding units came about in this way. According to Mr. Bird, early in 1981 he "issued a directive to our staff to develop a slow combustion fireplace with a glass door; believing this was the way the market was going".

Mr. Bird was adamant that the units should have two doors not one, because he believed that people like to see as much of the fire as possible.

Various prototypes were built but they were not successful, primarily because of inability to control the air flow. This meant that doors were not as clean as was thought desirable nor could the requisite degree of slow combustion be obtained. As a result the notion of a two doored unit was abandoned and about June 1981 Jalco began to look at a unit with a single door. Once again various prototypes were built until what Mr. Bird described as "a successful fire-box" was produced about October 1981.

While this development was taking place, Jalco had in its possession brochures relating to appliances produced by a number of companies including Kent. The prototypes that Jalco was developing bore resemblance to several of these products. These prototypes, said Mr. Bird, were not built from engineering drawings. This may seem curious; he explained it in this way :

"First of all we did not have the capability of doing these drawings that really meant anything and, secondly, we have found by experience that we can produce these units without drawings. It was basically - what would you call it - a suck-it-. and-see exercise, trial and error, build and then rebuild".

Although this seems a strange way for a company to conduct its operations, Mr. Bird's evidence in this respect was corroborated by that of Mr. Baldwin and Mr. Davis. I accept that explanation as to the way in which Jalco developed its inbuilt and freestanding units.

With the Jalco freestanding unit, it was decided to place a decorative surround on the side walls. Mr. Bird suggested to Mr. Baldwin that tiles be used for they could be changed to suit the decor.

The building of the Jalco inbuilt model was described by Mr. Bird as

"a different kettle of fish altogether . . . what I wanted to achieve was a unit that would take the place of the old Vulcan oil heaters because oil was getting expensive and if we could develop a unit that you could literally put in the place of an old Vulcan oil heater I believed we would have something that was very marketable".

To do this, according to Mr. Bird, a number of things were necessary. The dimensions of the fire-box had to be smaller than those of the freestanding model, the dimensions of the former being very much controlled by the dimensions of the Vulcan oil heater. It was necessary to put a casing around the inbuilt model to direct the flow of outer air and then to make a fascia panel. A decision was made, said Mr. Bird, that as the Vulcan oil heaters had been so successful it would be as well to settle for a fascia which was not dissimilar. "That is precisely what we did".

While this development was taking place, Mr. Bird was aware of the Kent log fire. With Mr. Baldwin he had seen one in the display room of the Housing Industries Association in West Perth about the middle of 1981. They did not take any measurement of it. And, said Mr. Bird, he did not take any measurement of the tile fire when he first saw one at Esperance about May 1981.

Mr. Bird stated that he had seen tiles on appliances other than the Kent model, more accurately that he had seen brochures from Italy and the United States showing tile sided fires, and these had been available to him as early as 1980.

Late in 1981 Jalco produced its first run of 20 inbuilt and freestanding units. The fire-boxes were identical except that 10 were 100mm shorter than the others, so that they might fit into fireplaces designed to take the Vulcan heater. In those 20 units the air inlet was above the door in the fire-box itself and there was a baffle plate and a bypass damper at the back. Asked whether the internal configuration of those 20 units was in any way similar to the Kent units, Mr. Bird answered "Yes, very similar".

Thereafter Mr. Bird sought advice from a patent attorney in Canberra and was told that Kent had applied for a patent which included an air inlet at the top and that if it were granted Jalco could well be infringing the patent. The attorney's advice was that it would be unwise for Jalco to continue to develop units with air inlets at the top.

As a result of this advice, Jalco altered the position of the air inlet on its units to the bottom. Of those original 20 units, most were sold. Mr. Bird believed that the patent attorney still had one; he had one and a former partner of his had one.

Further modifications were made to the Jalco inbuilt and freestanding units. A secondary baffle plate was installed because the air was no longer circulating around the fire-box but was going straight to the top.

The Kent units have a bypass damper consisting of a heavy circular plate which moves over a circular hole. The Jalco units have a bypass damper that sits at the back of the unit but is in the form of a flap on a 45 degree angle plate with a hole in it. The flap opens and closes the hole. That design was embodied in the Jalco units about March 1982.

Mr. Baldwin explained that he did no construction work himself on the Nordess or Nordanse or on the inbuilt and freestanding models. His role was to discuss with Mr. Davis how the units were to be built to be put into production.

He confirmed the origin of the Nordess and Nordanse in the arrival of the Fire Nymph from Adelaide. At that time Jalco was having problems with some of the units it was developing. In trying to keep the fire-box as small as possible there was a tendency for the unit to smoke at the front rather than draw efficiently up the chimney.

According to Mr. Baldwin, after the arrival of the Fire Nymph Jalco built a unit from measurements taken from it. Mr. Baldwin did not himself take measurements from the Fire Nymph but he believed that Mr. Davis did. The prototype was built without any glass enclosure, being just an internal fire-box. It was found to smoke. Thereafter Jalco went about enclosing the unit with glass to see if this made a difference to the draw. It did reduce the air coming into the unit which performed better. But it was not entirely satisfactory; there was still some smoking on the side glass. Thereafter Jalco completed a unit with the outer casings. As already mentioned, it was Mr. Baldwin who thought that a concave top would improve the appearance of the unit Jalco was developing.

Mr. Baldwin described various changes that were made in the course of development. A bar across the front of the unit was raised and lowered; the size of the flue was increased.

Asked whether Jalco had in fact deliberately copied the Fire Nymph unit, Mr. Baldwin replied :

"It was certainly similar to but as an absolute copy I would say, no, it was not an absolute copy because it had various components that we had built into it. In other words, by saying components I mean, by ways of forming the hearth around the ash box, the body of the firebox which we decided to bend in one piece rather than various pieces, to that extent, no. it is not an exact copy".

Questioned about the development of the inbuilt and free-standing models, Mr. Baldwin commented that early in 1981 Mr. Bird had asked him and Mr. Davis to produce a slow combustion fire box. They did so but it was not successful. They did in fact try to use the configuration of the Nordess front and turn it into a true slow combustion unit but this too was not successful. About the middle of 1981 they began to develop a two door model, without the configuration of side glass, but again without success. In all these units, air was coming in through the grate.

It seems that the main problem lay in keeping the glass clean. Mr. Baldwin described how he looked at brochures published by other manufacturers including Kent to see how they appeared to deal with the problem. He explained :

"We noted that the air inlet to these fire-boxes was common between these three (referring to the Woodsman, Warm Air and Kent). They were all delivered in a very similar manner, at the top of the unit and directed towards the glass panel, which obviously indicated to us that it was there for the purpose of keeping the glass clean and introducing the air at the base of the fire-box".

With this in mind Jalco proceeded to build a unit similar to the Woodsman with the configuration of an octagonal fire-box. In further development a unit was built similar to the Kent fire-box, using that air delivery method. Later the flue diameter was altered. In order to overcome the problem of a sticking air slide control a heavier bar was used.

Ultimately, in October or November 1981, a prototype was arrived at which appeared to be satisfactory. Asked whether that prototype was a direct copy of the Kent appliances, Mr. Baldwin replied :

"Not an absolute direct copy although we used the air flow system from the fire-box because to absolutely copy it - we did not really have machinery capacity to copy it in that manner, to that degree".

Mr. Baldwin acknowledged that what he extracted from the Kent brochures and from an inspection of the Kent unit were the approximate measurements of the fire-box (length, height and width) and its air delivery system. As to the Jalco freestanding appliance, it was decided that tiles on the side of the unit improved its appearance and so there were incorporated.

Mr. Baldwin confirmed Mr. Bird's evidence as to the absence of detailed working drawings. He explained that as Mr. Davis built the prototypes he (Mr. Davis) took measurements which he then recorded. With this record it was possible to provide a cutting list for the body of the unit, that is the fire-box. A cutting list with measurements was given to Elders Metal Ltd. and was used continuously. A phone call with an order number and identifying the model as freestanding or inbuilt was sufficient to obtain components.

As Christmas 1981 approached Jalco was anxious to get its units finalised. Mr. Baldwin came up with the idea of designing the fascia panel of the inbuilt unit as a Vulcan oil heater or similar thereto. He thought that as the Vulcan unit had been successful over many years it must be aesthetically pleasing to the public.

In answer to a question whether the design of the casing of the inbuilt model was influenced by any Kent appliance, Mr. Baldwin answered :

"No. The actual configuration of the louvres were derived from the Woodsman unit because, at that particular time, we did have a Woodsman in the factory".

Mr. Baldwin explained, as Mr. Bird had explained, that the size of the fire-box for the inbuilt model was governed by the desire to provide a unit which would replace existing oil heaters without the need to alter the brick work in the fireplace. Once these changes had been made the production run took place of 20 units, 10 inbuilt and 10 freestanding. Mr. Baldwin agreed that the freestanding units had an internal configuration similar to the Kent units.

In January 1981 a change was made to the Jalco units, affecting the second batch produced. The air inlet was moved from above the door to the bottom of the unit. To give effect to this change of position, the cutting lists had to be revised to allow for extra components.

Mr. Davis was the person most directly concerned with construction of the Jalco units. He recalled seeing a Fire Nymph Alpine in Jalco's premises in August or September 1980. Mr. Baldwin asked him to look at it and then asked him what he thought of it. Mr. Davis thought it was very impressive. Mr. Baldwin asked him to make some sketches of the unit before it was taken away by the customer who had bought it. Mr. Davis did so. Asked what sort of examination he had made in order to prepare the sketches, Mr. Davis replied :

"The appliance is in such a way that you can see down through the top of it. You can open the doors and inspect the inside section with ease. You can remove the ashpan and inspect all those details without much trouble. The thing that I thought was impressive about the unit or that struck me was the fact that it was a very narrow unit compared with the ones that we had been experimenting with before this one came on the scene".

By 'narrow' Mr. Davis meant from front to back. Mr. Davis was puzzled why the fire-box did not smoke since Jalco had had so many problems with smoke in the models it had thus far developed. His interest was only in the fire-box. He said :

"I might add that at no time was it ever suggested to me by Mr. Baldwin that we were undergoing a project here that would result in a complete copy of this unit".

Having made sketches and taken measurements in an exercise book, Mr. Davis, on instructions from Mr. Baldwin, proceeded to make up a fire-box. It had no glass and did smoke out the front. It was then thought that perhaps a bigger flue might rectify the problem. Jalco carried out a number of experiments aimed at reducing the smoke problem.

Finally, Mr. Davis installed doors on the prototype, doing so from his own specifications.

Asked about any resemblance between the first prototype and the Alpine unit, Mr. Davis replied :

"The first prototype would have been probably near identical as much as I could have possibly made it, going by the measurements I have here and by what I was able to remember from actually my visual inspection of it".

Mr. Davis described the changes that took place between the first prototype and the final model which was ready by Christmas 1981. In trying to eliminate the smoke problem various components of the fireplace had to be altered. That involved cutting sections off and welding other sections on the unit. He summed it up in this way :

"I did not change things probably to a great extent from the Fire Nymph design. It was still very much along the same appearance as that although, as I say, we did a lot of things differently from a manufacturing point of view".

He explained this by saying that when he first saw the Fire Nymph unit he was amazed at the number of little bits and pieces, particularly in the ashpan area. He therefore set to work to make a unit of more simple construction with less components.

Mr. Davis pointed out that the prototype developed by Jalco at the end of 1980 differed from earlier prototypes in having the damper control coming out of the top and having a handle protruding from the bottom of the heater, rather than the top.

Asked to describe the differences between the earlier prototype and the final model, Mr. Davis referred to the canopy section which became concave on the Nordess instead of straight-sided. The grate was different, being pressed steel rather than cast iron. In the earlier model, where the air inlet was at the bottom of the fireplace, there was an ashpan in the form of a slide operating by a handle moved from right to left to let air in underneath the fire. The damper control was at the top and operated at the top. In the later model the controls for the air inlet and the damper are in the front left hand side.

It is apparent from Mr. Davis' evidence that Jalco made a conscious decision to introduce some variations to the Alpine design. For instance he thought it would be far cheaper to put the air inlet in the front of the ashpan, so that the front of the ashpan and the slide were all constructed as one, making it easier to assemble all the front section under the fire-box without a need for an air inlet in that area.

Mr. Davis referred to differences in the back plate:

". . . you will notice in the drawing theirs is bent in such a way to strengthen it on the bottom, with a box section by the looks of it. We left ours at the bottom with a raw edge and simply tucked it . . . behind an angle iron frame which eliminated it from buckling with the heat. The top section of the Alpine has got a raw edge which means there are no angled bends on it to strengthen it, but ours we bent back towards the back of the fire and then bent it down again so that also hooked into an angle iron frame. That was simply to locate it and stop it from buckling".

As to the top plate, Mr. Davis described that on the Alpine as sloping down to the plinth and being fully welded right out to the outside edge of the front glass section. The Nordess is made in two sections - the middle section over the glass doors being separate from the two end pieces of the glass side panel.

As to the skin of the fire-box, Mr. Davis said that Jalco was quite familiar with the notion of protecting the outside skin of a fireplace. It had built units to give effect to this concept so that having constructed the fire-box it was just a matter of making up suitable components.

In cross-examination Mr. Davis was then asked to compare exhibit 35, 'exploded' or sectional drawings of the Alpine, with a notional exploded drawing of the Nordess and Nordanse appliances. For the most part he denied any close resemblance in this regard. I deal expressly with a comparison of the units later in these reasons.

When the prototype was completed about Christmas 1980, it was for Mr. Davis to prepare cutting and bending or processing lists. He said that he was quite familiar with all the components and as the prototype was being developed:

". . . I noted all the various parts, the measurements of them and their bends and so forth, and from that I was able then to draw up a complete cutting list which would be for the guillotine operator, all the various metals, their gauges and so forth. Then it was necessary for me to make up patterns in order to show where the various bends were, the angles required, holes and slots etcetera that were needed to be in those various parts. It was left to me to prepare all those things".

I accept Mr. Davis' evidence that, however unprofessional it may seem, he did not work from detailed drawings but provided cutting and bending lists to Elders Metal Ltd.

Mr. Davis was involved in the development of the inbuilt and freestanding appliances. Early in 1981 he was told, either by Mr. Bird or Mr. Baldwin, that the company wished to move into the slow combustion side of fireplaces. In his words:

"We agreed that we would try and make a slow combustion unit along the same lines as the front of the Nordess with the idea being the main part of the fireplace would be inside the brick work of an open fire and the glassed area would be able to protrude out more on to the hearth of the brick work, so I was instructed to make up a fire-box along that line. This I consequently did".

Mr. Davis described how Jalco tried first to make a slow combustion unit with two large glass doors. Although the fire-box worked quite well, there were problems with the glass smoking up. In the end it was decided to keep the glass area smaller. By that time there were in Jalco's office brochures relating to Kent and Warm Air units. I infer from his evidence that these provided some assistance to Jalco in deciding on the final shape of the glass doors.
DEVELOPMENT OF JALCO PRODUCTS - CONCLUSIONS

From the totality of the evidence of Messrs. Bird, Baldwin and Davis I draw these conclusions:

1. In 1980 Jalco made a decision to become more involved in the production of solid fuel heating units.

2. The initiative for the development of the Nordanse and Nordess came from the Fire Nymph sent from South Australia. Mr. Davis, on instructions, made sketches and took measurements of that unit. Jalco's first prototype was made as near identical to the Fire Nymph as possible, having regard to the fact that the unit had been sold and Jalco was dependent upon measurements taken by Mr. Davis and his recollection of the unit.

3. Various changes were made by Jalco as development proceeded. These changes were aimed at simplifying construction. Some changes were made consciously to avoid too close a resemblance to the Fire Nymph.

4. The Nordess replaced the Nordanse, the difference between the two being in the design of the hood. The hood of the Nordanse was much closer in appearance to that of the Fire Nymph than was the hood of the Nordess.

5. The initiative to develop the inbuilt and freestanding units came from a directive given by Mr. Bird early in 1981. The directive was to produce a unit with two doors but this proved difficult and in June 1981 Jalco began to look at the construction of a unit with one door.

6. While Jalco was developing its inbuilt and freestanding units it had access to brochures for heating units produced by several companies including Kent and Warm Air. The prototypes bore resemblances to several of these units. In particular Jalco borrowed the air flow system from the Kent fire-box though lacking the expertise and equipment to make an exact copy. Mr. Bird and Mr. Baldwin looked at a Kent log fire about the middle of 1981.

7. The prototypes provided by Jalco and the finished products were not built from engineering drawings. As prototypes were made Mr. Davis took measurements which he recorded and in the end had a cutting list from which orders were placed with Elders Metals Ltd.

8. The dimensions of the inbuilt model were determined largely by those of the Vulcan oil heater, Jalco's hope being that this model would replace the Vulcan. The fascia panel of the inbuilt model was derived mainly from that of the Vulcan.

COMPARISONS - ALPINE v. NORDANSE AND NORDESS

As mentioned earlier, the Nordanse is no longer in production. It is however part of Alpine's claim. With its straight sloping hood, its resemblance to Fire Nymph's Alpine is more striking that is Jalco's current model, the Nordess.

A comparison of the Alpine and Nordess was made in a report submitted by Dr.J.J. Todd, lecturer at the Centre for Environmental Studies, University of Tasmania. Dr.Todd had considerable experience in the energy field, in particular domestic heating, wood combustion, energy conservation and alternative energy systems. I accept his evidence.

In his report (exhibit 52) Dr. Todd commented :

"The two heaters are of the same type, that is they are enclosed, non-airtight heaters with grates, ashpans, flue dampers, glass panelled doors and multiple skins to reduce surface temperatures. Their external appearances are characterised by their large glass doors and glass side panels and the sloping hood above the doors. The external appearance of the two heaters differs in that the Fire Nymph Alpine has straight sloping panels on the hood whereas the Jalco Nordess has concave panels on the hood.

The dimensions of the combustion area are larger on the Jalco Nordess than on the Fire Nymph Alpine. The ratio of sold grate to grate openings on the Jalco Nordess is about 1.45:1 whereas on the Fire Nymph Alpine the ratio is 1.22:1. The Fire Nymph Alpine has a grate shaker, the Jalco Nordess does not. The layout of the combustion areas in the two heaters, that is the position of the grate, doors, side panels, rear heat liner, are very similar."

The similarities and differences noted by Dr. Todd may be seen in the series of photographs, exhibit 43.

COMPARISONS - KENT TILE FIRE v. JALCO HOME FIRE (FREESTANDING MODEL

The Kent tile fire and the Jalco home fire freestanding model were also the subject of a report by Dr. Todd (exhibit 51). He concluded :

"The two heaters are remarkably similar in external appearance but they are not identical".

I accept Dr. Todd's description of the two heaters which in any event was borne out by a visual inspection in the court room itself. The similarities and differences may be summed up in this way.
1. Both heaters are designed to have six 200mm x 200mm ceramic tiles attached to each side.

2. Both heaters have identically patterned perforated metal grilles on top though their external dimensions are slightly different.

3. Both heaters have single doors with a glass panel, the Kent with clear glass and the Jalco with mottled glass.

4. Both heaters sit on metal pedestals of similar shape.

5. Both heaters have a small metal spark or ashguard fixed below the door.

6. The air inlet controls and the baffle bypass control are differently located though both models make use of small spherical handles on the controls.

7. Externally the Kent is slightly wider and slightly taller than the Jalco; they are of about the same length.

8. Both heaters make use of the top exiting flue located near the rear of the heater.

9. The mounting feet on the heaters are different. 10. Both heaters have a single air gap between the sides of the combustion chamber and the tiles.

11. Both heaters have double air gaps between metal plates at the rear, the Jalco having a single heat shield under the fire box and the Kent a double heat shield.

Turning from the external appearance of the heaters to their combustion systems, these similarities and differences may be observed.

12. Both heaters have sheet steel fire boxes, neither making use of fire bricks in the combustion area and both relying on the build up of an ash bed to insulate the base of the fire.

13. Internally the fire boxes are of similar length but the Kent is slightly higher and somewhat wider. 14. Both heaters have a large baffle extending almost three quarters of the length.

15. The clearance between the baffle and the top of the heater is about 55mm for the Kent and 63mm for the Jalco.

16. Both heaters have a bypass damper through the baffle directly under the flue exit. The Kent has a catch system which only allows the door to be opened when the baffle damper is open whereas the Jalco has a lever arrangement which automatically opens the damper when the door is opened.

17. The dampers on the two heaters are shaped differently.

18. Both heaters have air tight seals around the door.

19. The most significant difference in the combustion systems of the two heaters is in the location of the air inlets. Both heaters direct the combustion air onto the inside glass on the door but in the Kent the air enters from above the door and in the Jalco the air enters on both sides of the door. The air inlet control of the Kent is above the door and on the Jalco it is below.

The operating characteristics of the two heaters are very similar but, as Dr. Todd observed, "it must be stressed that there are many factors which can influence how a heater operates and so these observations must be treated with caution" (exhibit 51 p.1). Dr. Todd's conclusion was in these terms :

"Over all I consider the appearance, combustion system and performance of the two heaters as being very similar".

I agree with this conclusion.

COMPARISONS - KENT LOG FIRE v. JALCO HOME FIRE (INBUILT MODEL)

From the very fact that the Kent log fire and Jalco home fire inbuilt unit is each inbuilt, the scope for resemblances in external appearance is more limited than in the case of the freestanding models.

A comparison of the two units is complicated by a change in the external appearance of the Kent log fire since its inception. The most significant change in the Kent log fire has been in the number of grilles, reduced from 7 to 5. The Jalco home fire has 7 grilles, giving it a stronger resemblance to the earlier and now largely superceded Kent log fire than to the current model. Nevertheless, there are similarities. They lie mainly in the overall dimensions and shape of both units, the air slide cover, door and door handle, ash spill tray, knobs, flue diameter, air inlet, door hinge, double skin, mounting plinth and baffle, primary and secondary burning chambers, damper location and arrangement, front panels, and fascia surround. The appearance of individual grilles is similar but in the case of the Kent log fire, the reduction from 7 to 5 has lessened the overall resemblance of the units.

JALCO INBUILT AND FREESTANDING UNITS - MODEL A

In dealing with the development of the Jalco products I mentioned the decision by Jalco, on advice from a patent attorney, to alter the position of the air inlets on its units from the top to the bottom. For the purpose of the proceedings the earlier units, of which there were 20, were referred to as model A. The contemporary units were referred to as model B.

In furnishing particulars of those aspects of Jalco's appliances said to be almost identical to Kent's units, Kent provided a list which included the following :

"Top air inlet Deflector Rectangular damper arrangement".

At the hearing counsel for the applicants made it clear that these similarities were alleged in respect of the earlier model A only.

When this hearing began counsel for the respondent stated that his client did not wish to fight the action so far as the model A units were concerned. In his words the respondent was :

". . . quite content to give an undertaking to the court in terms of the relief sought in the statement of claim and to submit to any other consequential order which is appropriate".

Thus whatever the outcome of the rest of the action, Kent is entitled to relief in respect of the 20 model A Jalco units. The nature and extent of that relief must be looked at in the context of the outcome overall of these proceedings.
COPYRIGHT

Each application asserts a breach of copyright on the part of Jalco. This contention gives rise to a number of questions of law and of fact. As a first step in making good their claim, Fire Nymph and Kent must each show the existence of drawings and writings capable of copyright and in which the copyright is vested in them.

Although Jalco does not admit that Fire Nymph or Kent holds copyright in any of the material in question, largely consisting of drawings prepared by each company for the purpose of manufacturing its units, it does not dispute that the drawings themselves are capable of copyright.
COPYRIGHT - FIRE NYMPH

Fire Nymph claims copyright in the following material :
(a) a series of drawings entitled "Fire Nymph Model 700 and 900 Room Heaters, dated 11 November 1979 and under the hand of J.B. Duke. These drawings show in detail Fire Nymph fireplaces model 700 and model 900.
(b) A drawing entitled "overall dimensions Alpine fireplace", dated 16 November 1979 and under the hand of J.B. Duke. This drawing depicts an Alpine fireplace.
(c) The drawings and writings in Fire Nymph's installation and operating manual.

Mr. Wilkinson identified a series of drawings (exhibit 35) as drawings prepared by Fire Nymph in connection with the development and manufacture of its fireplaces, being (a) and (b) above. He described them as :

". . . showing a series of parts and their inter-relationship to each other within the fireplace as a guide to assembly".

He said those drawings were the property of Fire Nymph and I accept that evidence.

Mr. Wilkinson then produced two brochures, both relating to the Fire Nymph Alpine. The first (exhibit 36) was published in February 1978 identifying the unit as a "Combination slow combustion and open fireplace". It contains a photograph of the unit, both series 900 and series 700, with sketches showing dimensions and features. The other brochure (exhibit 37) was published in 1980. Again it contains a photograph of the Alpine, reference to the series 900 and series 700, sketches of both units with dimensions and a cut away sketch showing features of both.

Mr. Wilkinson also produced documents in the form of Fire Nymph Alpine operating instructions (exhibit 38) and Fire Nymph Alpine location instructions (exhibit 39). As the names suggest, the operating instructions deal with the controls on the Alpine, the method of lighting a fire and the operating controls. The location instructions deal with such matters as hearth size and safe clearance requirements.

I accept Mr. Wilkinson's evidence that the documents comprising the brochures and instructions are the property of Fire Nymph.

As already mentioned, the respondent does not challenge that copyright subsists in the drawings and other documents to which I have referred. Copyright is therefore presumed to subsist in those works (Copyright Act 1968 s.126(a)). As to the ownership of that copyright, by reason of s.126(b) of the Act the applicant Fire Nymph is "presumed to be the owner of the copyright if (it) claims to be the owner of the copyright and the defendant does not put in issue the question of his ownership".

Warren Ivan Murray conducts Solid Fuel Heating Advisory service at Gosnells, a shop stocking heating units. He stocks Fire Nymph and Kent heaters as well as those made by other companies. He spoke of the good reputation that those products enjoy. In his opinion, the existence of the Jalco products has been a source of confusion :

". . . because people are genuinely confused about it because they do look alike - very similar - ".

Once again it appeared that the complaint customers were making to Mr. Murray was that they had seen products elsewhere which appeared to them to be the same, at a lower price. In his words :

"Of course, once I explained to them that there is a difference; that they are not in actual fact comparing the Tile Fire against a Tile Fire but they are comparing a Home Fire against a Tile Fire they are different and they accept that - most times they accept that".

There have been occasions when nevertheless they asked why they should buy a Kent product when they could buy another product at a cheaper price.

Douglas Andrich, a motor mechanic and business proprietor, had dealings with Reflective Insulations, the business conducted by Mr. Watters. He spoke of an occasion in early September 1982 when he contacted Mr. Watters regarding a tile fire. He asked Mr. Watters to visit him and give him a quote which Mr. Watters did. Mr. Andrich accepted the quote and about a week later saw an advertisement for what he described as the same type of tile fire but much cheaper than what Mr. Watters had quoted. Mr. Andrich was upset at what had happened until Mr. Watters explained that the cheaper heater was in fact a different one. In cross-examination Mr. Andrich said: "After Mr. Watters pointed this out to me, when I had another look at the advert I noticed the word 'Jalco' on it".

It is apparent that most of the confusion that has arisen is between the Kent tile fire and the Jalco freestanding unit. But it is confusion in the minds of customers rather than that they are deceived or misled.

In all cases it is possible, on reasonable inspection, to discern from labels the identity of the units in question. I base this conclusion upon the units tendered in evidence. The Fire Nymph has on its back a metal label headed "Fire Nymph Fireplaces", with a New Zealand address and description of the model and other details. The Jalco Nordanse has a metal label below the glass doors with the words "Jalco - Craftsmen in Metal". The Kent tile fire has a metal label at the rear with the words "Kent Heating Limited", an address and information about the unit. On its front is the name "Kent". The Jalco freestanding model has no identification on the back but it has a metal label attached to the front below the door and another stuck-on label above the door. Each bears the name "Jalco". The Kent log fire has the name "Kent" on the front of the unit in the bottom right hand corner. The Jalco inbuilt model has a metal plate bearing the name "Jalco" in roughly the same position.

Complaint was made by the applicants of newspaper advertisements, the complaint being that these further increased the extent to which the public might confuse the applicants' and the respondent's products. Some advertising tendered in evidence was a legitimate cause for complaint by the applicants had the advertisements been authorised by the respondent. But the evidence was that those particular advertisements had not been so authorised and that the respondent was not a party to the advertising in question. In so far as other advertisements might be said to lead to confusion, it is a fact that the advertising of the respondent's products was accompanied with the name Jalco.

The tests applied by the members of the court in Parkdale differ. Gibbs C.J. asked whether a consumer acting reasonably would be misled (at pp.6-7). Mason J. asked whether a purchaser to whom it was important to buy a particular brand would be misled (at p.16). Brennan J. asked whether a consumer, "not labouring under any mistake or imperfection of understanding of law" would be misled (at p.27). Underlying all judgments is the notion that it is not enough to establish a case under s.52 of the Trade Practices Act to show that there may be misunderstanding or confusion in the minds of consumers. And that is so even where one manufacturer has deliberately copied the product of another. Conduct does not breach s.52 merely because members of the public may have cause to wonder whether it might not be the case that two products came from the same source.

The applicants have not established that in the manufacture and sale of its heaters Jalco was guilty of conduct that was misleading or deceptive or likely to mislead or deceive.
PASSING OFF

The tort of passing off raises some considerations different to those operating in the case of an application based on s.52 of the Trade Practices Act. In particular it is concerned with damage to goodwill. But the facts relied upon by the applicants were much the same in each case.

Counsel for the parties took as a starting point the judgment of Lord Diplock in Warnink v. Townend and Sons (Hull) Ltd. (1979) 3 WLR 68 at pp.74-75.

"My Lords, Spalding v. A.W. Gamage Ltd., 84 L.J. Ch. 449 and the later cases make it possible to identify five characteristics which must be present in order to create a valid cause of action for passing off: (1) a misrepresentation (2) made by a trader in the course of trade, (3) to prospective customers of his or ultimate consumers of goods or services supplied by him, (4) which is calculated to injure the business or goodwill of another trader (in the sense that this is a reasonably foreseeable consequence) and (5) which causes actual damage to a business or goodwill of the trader by whom the action is brought or (in a quia timet action) will probably do so".

In my opinion the claim of each applicant based on passing off fails because each failed to establish that there was a misrepresentation in the sense required by the authorities.

Despite similarities in the applicants' products and those of the respondent, all of which have been noted earlier in these reasons, I am not satisfied that intentionally or otherwise Jalco offered its products as those of Fire Nymph or Kent. Jalco's products were identified as its own, both in their labelling and in any advertising for which Jalco was responsible. There was scope for confusion in the case of the Kent tile fire and Jalco home fire freestanding unit though not, I would have thought, in the case of Kent's current log fire and Jalco's inbuilt unit, nor in the case of the Fire Nymph Alpine and the Jalco Nordess. But I do not accept that there was deception or the likelihood of deception.
SUMMARY OF FINDINGS AND CONCLUSIONS

1. In manufacturing and selling the Jalco freestanding unit there was a breach of copyright in the drawings and other material relating to the Kent tile fire.
2. Otherwise there was no breach of copyright in respect of either the Kent or Fire Nymph drawings and other material.

3. Jalco did not contravene s.52 of the Trade Practices Act in respect of the manufacture and sale of its Nordess, Nordanse, or its home fire freestanding and inbuilt units.

4. There was no passing off of the Jalco units as those of Fire Nymph or Kent.

RELIEF TO BE GRANTED

Jalco argued that if Fire Nymph and Kent were otherwise entitled to relief, an injunction should be denied because of laches. I need only be concerned with Kent and there is no substance in the argument so far as that company is concerned. It acted with reasonable speed once it became aware of the Jalco units on the market.

I am of the opinion that this is a proper case for an injunction. A breach of copyright has been established by the manufacture and sale of the Jalco freestanding unit and Kent is entitled to an injunction to restrain any further breach.

Kent is also entitled to an order for delivery up of any Jalco freestanding units still in the possession of Jalco.

As to damages, s.116(1) of the Copyright Act reads:

"116.(1) Subject to this Act, the owner of the copyright in a work or other subject-matter is entitled in respect of any infringing copy, or of any plate used or intended to be used for making infringement copies, to the rights and remedies, by way of an action for conversion or detention, to which he would be entitled if he were the owner of the copy or plate and had been the owner of the copy or plate since the time when it was made".

Sub-section (2) of s.116 removes the entitlement to damages or other pecuniary remedy in certain circumstances, but in my view none of those circumstances is applicable here.

Section 115(2) of the Copyright Act empowers the court to grant by way of relief an injunction and either damages or an account of profits. Counsel for the applicants agreed that there was no entitlement to both damages and an account. In his submission damages were appropriate in respect of those units which had been sold.

Exhibit 71, the schedule of Jalco sales, shows that Jalco had sold 656 of its freestanding units to July 1982. Kent is entitled to damages in respect of the sale of those units. But counsel did not direct submissions to a precise figure. The matter is further complicated by the 20 Model A Jalco home fire units for which no defence was offered. In the circumstances I propose to give counsel an opportunity to be heard on the amount of damages appropriate in the light of these reasons.

As some matters remain to be resolved, including the question of costs, I propose to do no more than publish these reasons and direct that each application stand for judgment on a date to be fixed after discussion with counsel. I further direct that not less than 3 days before motion for judgment the applicants will lodge with the District Registrar and serve on the solicitors for the respondent a minute of the judgment for which they intend to move and that the respondent do likewise in respect of the application brought by Fire Nymph and Alpen.