Medium Neutral Citation: JR Consulting & Drafting Pty Ltd & Anor v Cummings & Ors [2014] NSWSC 1252
Hearing dates: 2 - 6 and 10 - 11 June 2014
Decision date: 12 September 2014
Jurisdiction: Equity Division
Before: Black J
Decision:
Parties to be heard as to orders that ought to be made to give effect to findings in the judgment.

Catchwords:
CONTRACTS - construction - where parties entered into contract for sale of non-exclusive "interest" in software - nature of "interest" acquired by first plaintiff - whether interest was limited to software which existed at relevant date - whether first defendant owned copyright in software to exclusion of second defendant - whether first plaintiff was limited to licensing software to particular customer - whether first defendant had express or implied obligation to provide first plaintiff with source code and updates for, and modifications and developments to, software - whether initial contract was abandoned by parties.

CONTRACTS - construction - where relevant parties entered into subsequent contract in respect of software - scope of licence granted under contract - whether licence was limited to specified period - whether second plaintiff was permitted to grant licences to new customers after that period - effectiveness of assignment - whether second defendant required to provide updates to second plaintiff to ensure software compatibility with other software.

CONTRACTS - breach - whether parties had breached obligation to deposit source code with escrow agent - whether conditions of agreement for release of software from escrow were satisfied - whether second defendant breached obligations to provide development services, information and assistance - confidentiality - whether second defendant had received and disclosed confidential information - good faith and cooperation - whether there was a breach of obligation of good faith.

CONTRACTS - termination - whether second defendant had properly terminated agreement - whether established that second plaintiff breached contract by non-payment of licence fees - whether second defendant had abandoned rights to termination - whether notice of termination of agreement was effectively served - whether there was a failure by second defendant to comply with dispute resolution clauses - whether termination was invalidated by non-compliance with dispute resolution clauses.

CONTRACTS - existence of contract - whether established that entity was granting licences under previous agreement - where person is director of two associated companies - whether sub-licence was created by decision of common director.

TORTS - tort of conspiracy - harm by unlawful means - where second and third defendants had entered into purchase agreement - where defendants had terminated earlier agreement - whether established that conduct constituted a tort of conspiracy - whether conduct was unlawful - whether established that a purpose of conduct was to harm second plaintiff - whether established that second plaintiff has suffered loss or damage caused by conduct.

TORTS - tort of inducing breach of contract - whether conduct constituted breach of earlier agreement - whether third defendant induced or procured second defendant to engage in conduct - whether third defendant had sufficient knowledge of terms of previous agreement - whether third defendant had requisite intention for second defendant to breach the previous agreement.

TRADE PRACTICES - misleading or deceptive conduct - where representations were made on website registered to company not party to proceedings - whether third defendant engaged in trade or commerce between Australia and another country - whether third defendant engaged in conduct involving the use of telegraphic or telephonic services - whether established that representations were made by third defendant - whether representations were misleading or deceptive or likely to mislead or deceive.

TRADE PRACTICES - unconscionable conduct - whether second and third defendants are corporations engaged in trade or commerce - whether plaintiffs were under a special disadvantage known to second and third defendants - whether second and third defendants unconscientiously took advantage of plaintiffs' special disadvantage - whether second and third defendants were engaged in conduct in connection with supply or possible supply of goods or services - whether second and third defendants engaged in unconscionable conduct under Australian Consumer Law ss 20 and 21.

INTELLECTUAL PROPERTY - copyright - groundless threats of legal proceedings - whether third defendant made threats in respect of infringement of copyright - whether statements constituted groundless threats of copyright infringement.

WORDS AND PHRASES - "interest", "customer".

INTELLECTUAL PROPERTY - copyright - original works in which copyright subsists - whether copyright subsists in each update or new release of software and user documentation - whether first cross-claimant owned copyright in software releases in relevant periods.

INTELLECTUAL PROPERTY - copyright - infringement - whether third cross-defendant infringed copyright in software - whether first, second and fourth cross-defendants had authorised alleged copyright infringement - liability of director of cross-defendants - whether cross-claimants are estopped from bringing an action for infringement of copyright - whether additional damages should be awarded under Copyright Act 1968 (Cth) s 115(4).

TRADE PRACTICES - misleading or deceptive conduct - whether established that alleged representations were made by first, second and third cross-defendants - whether representations were misleading or deceptive or likely to mislead or deceive - whether cross-claimants had relied on alleged representations - whether established that loss and damage suffered by cross-claimants was caused by representations - accessorial liability - application of Australian Consumer Law ss 18 and 29.

EQUITY - breach of confidentiality - whether information in licence key generator is property - whether information is confidential - whether second and third cross-defendants owed an obligation of confidentiality to cross-claimants - whether second and third cross-defendants breached obligation of confidence.
INTELLECTUAL PROPERTY - trade marks - infringement - where third cross-defendant had used phrase on website - whether first cross-claimant has standing to bring claim - whether cross-claimant is entitled to be registered as owner of registered trade mark - whether conduct of cross-defendants constituted trade mark infringement - whether cross-defendants are liable for additional damages.
Legislation Cited: - Australian Consumer Law ss 2, 18, 20, 21, 21(2), 21(5), 21(6), 29(g), 29(h), 151(g), 151(h), 236
- Competition and Consumer Act 2010 (Cth) s 6(2)(a)(i), 6(3)(a), 131, 163(4), Sch 2
- Competition and Consumer Legislation Amendment Act 2011 (Cth)
- Conveyancing Act 1919 (NSW) s 12
- Copyright Act 1968 (Cth) ss 10, 15, 31, 31(1)(a)(vi), 32, 35(2), 35(6), 36(1), 36(1A), 43B, 115, 115(4), 115(4)(b)(i), 115(4)(b)(ia), 115(4)(b)(ib), 115(4)(b)(iii), 115(4)(b)(iv), 129, 196, 196(2), 196(4),197, 202
- Designs Act 1906 (Cth) ss 19(2), 19(3)
- Evidence Act 1995 (NSW) s 140
- Trade Marks Act 1995 (Cth) ss 8, 17, 27(2), 88, 120, 120(1), 122(1)(b)
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- Aristocrat Technologies Australia Pty Ltd v Global Gaming Supplies Pty Ltd [2013] FCA 986; (2013) 102 IPR 400
- Armagas Ltd v Mundogas SA [1985] 1 Ll R 1
- Australasian Performing Rights Association Ltd v Valamo Pty Ltd (1990) 18 IPR 216
- Australian Broadcasting Commission v Australasian Performing Right Association Ltd [1973] HCA 36; (1973) 129 CLR 99
- Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd [2001] HCA 63; (2001) 208 CLR 199
- Australian Competition and Consumer Commission v CG Berbatis Holdings Pty Ltd [2003] HCA 18; (2003) 214 CLR 51
- Australian Competition and Consumer Commission v Samton Holdings Pty Ltd [2002] FCAFC 4; (2002) 117 FCR 301
- Australian Competition and Consumer Commission v SensaSlim Australia Pty Ltd (in liq) (No 5) [2014] FCA 340; (2014) 98 ACSR 347
- Australian Securities and Investments Commission v National Exchange Pty Ltd [2005] FCAFC 226; (2005) 148 FCR 132
- Autodesk Inc v Yee (1996) 68 FCR 391; 139 ALR 735
- Avel Pty Ltd v Multicoin Amusements Pty Ltd [1990] HCA 58; (1990) 171 CLR 88
- Ballard v Multiplex [2012] NSWSC 426
- Beck v Montana Constructions Pty Ltd [1964-5] NSWR 229
- BP Refinery (Westernport) Pty Ltd v Hastings Shire (1994) 180 CLR 266
- Bulun Bulun v R & T Textiles Pty Ltd (1998) 86 FCR 244; 157 ALR 193
- Burger King Corporation v Hungry Jack's Pty Ltd [2001] NSWCA 187; (2001) 69 NSWLR 558
- Butcher v Lachlan Elder Realty Pty Ltd [2004] HCA 60; (2004) 218 CLR 592
- Byrne v Australian Airlines Ltd [1995] HCA 24; (1995) 185 CLR 410
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- CBS Records Australia Ltd v Gross (1989) 15 IPR 385
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- Facton Ltd v Rifai Fashions Pty Ltd [2012] FCAFC 9; (2012) 199 FCR 569
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- Fazio v Fazio [2012] WASCA 72
- Fightvision Pty Ltd v Onisforou [1999] NSWCA 323; (1999) 47 NSWLR 473
- Fitzgerald v Masters [1956] HCA 53; (1956) 95 CLR 420
- Franklins Pty Ltd v Metcash Trading Ltd [2009] NSWCA 407; (2009) 76 NSWLR 603
- Freier v Australian Postal Corporation (No 2) [2012] NSWSC 61
- Gardex Ltd v Sorata Ltd [1986] RPC 623
- Gram Engineering Pty Ltd v Bluescope Steel Ltd [2013] FCA 508; (2013) 106 IPR 1
- Heydon v NRMA Ltd [2000] NSWCA 374; (2000) 51 NSWLR 1
- Hightime Investments Pty Ltd v Adamus Resources Ltd [2012] WASC 295
- Hospitality Group Pty Ltd v Australian Rugby Union Ltd [2001] FCA 1040; (2001) 110 FCR 157
- Iacullo v Hillam [2014] NSWSC 1021
- IceTV Pty Ltd v Nine Network Australia Pty Ltd [2009] HCA 14; (2009) 239 CLR 458
- Insight Oceania Pty Ltd v Philips Electronics Australia Ltd [2008] NSWSC 710
- Interlego AG v Croner Trading Pty Ltd (1992) 39 FCR 348; 111 ALR 577
- Interlego AG v Tyco Industries Inc [1989] AC 217
- Johnson v Brightstars Holding Company Pty Ltd [2014] NSWCA 150
- Johnson & Johnson Aust Pty Ltd v Sterling Pharmaceuticals Pty Ltd (1991) 30 FCR 326; 101 ALR 700
- Kalamazoo Australia Pty Ltd v Compact Business Systems Pty Ltd (1985) 84 FLR 101; 5 IPR 213
- Keller v LED Technologies Pty Ltd [2010] FCAFC 55; (2010) 185 FCR 449
- King v Milpurrurru (1996) 66 FCR 474; 136 ALR 327
- LED Builders Pty Ltd v Masterton Homes (NSW) Pty Ltd (1994) 54 FCR 196; 30 IPR 447
- Macmillan & Co Ltd v Cooper (1924) 40 TLR 186
- Mainteck Services Pty Ltd v Stein Heurtey SA [2014] NSWCA 184
- McCann v Switzerland Insurance Australia Ltd [2000] HCA 65; (2000) 203 CLR 579
- McKernan v Fraser [1931] HCA 54; (1931) 46 CLR 343
- Medical Benefits Fund of Australia Ltd v Cassidy [2003] FCAFC 289; (2003) 135 FCR 1
- Mentmore Manufacturing Co Ltd v National Merchandising Manufacturing Co Inc (1978) 89 DLR (3d) 195
- Microsoft Corp v Auschina Polaris (1996) 71 FCR 231; 142 ALR 111
- National Rugby League Investments Pty Ltd v Singtel Optus Pty Ltd [2012] FCAFC 59; (2012) 201 FCR 147
- Nature's Blend Pty Ltd v Nestle Australia Ltd [2010] FCAFC 117; (2010) 272 ALR 487
- Onesteel Manufacturing Pty Ltd v BlueScope Steel (AIS) Pty Ltd [2013] NSWCA 27
- Oren v Red Box Toy Factory Ltd [1999] FSR 785
- Pacific Brands Sport & Leisure Pty Ltd v Underworks Pty Ltd [2006] FCAFC 40; (2006) 149 FCR 395
- Pacific Brands Sport & Leisure Pty Ltd v Underworks Pty Ltd [2005] FCA 288
- Pacific Carriers Ltd v BNP Paribas [2004] HCA 35; (2004) 218 CLR 451
- Pacific Film Laboratories v Commissioner of Taxation [1970] HCA 36; (1970) 121 CLR 154
- Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd [1982] HCA 44; (1982) 149 CLR 191
- Pepsico Australia Pty Ltd (t/as Frito-Lay Australia) v Kettle Chip Co Pty Ltd (1996) 135 ALR 192; 33 IPR 161
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- RPR Maintenance Pty Ltd v Marmax Investments Pty Ltd [2014] FCA 409
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- South State Food & Beverage Pty Ltd v Kaur [2005] FCA 587
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- JW Carter, Breach of Contract, (2011, LexisNexis Butterworths)
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- N Seddon and MP Ellinghaus, Cheshire and Fifoot's Law of Contract, (9th Australian ed 2008, LexisNexis Butterworths)
Category: Principal judgment
Parties: JR Consulting & Drafting Pty Ltd (First Plaintiff/First Cross-Defendant)
Hayes Steel Framing Systems Pty Ltd (Second Plaintiff/Second Cross-Defendant)
Robert Cummings (First Defendant)
Tanmari Pty Ltd (Second Defendant/Second Cross-Claimant)
FrameCAD IP Ltd (Third Defendant/First Cross-Claimant)
Steel Framing Systems International Pty Ltd (Third Cross-Defendant)
Gianni Pacione (otherwise known as John Pacione) (Fourth Cross-Defendant)
FrameCAD Ltd (Fifth Cross-Defendant)
Representation: Counsel:
G Sirtes SC/T Catanzariti (Plaintiffs/First to Fourth Cross-Defendants)
S J Goddard SC/S L Ross (Defendants/Cross-Claimants)
Solicitors:
Simone Legal (Plaintiffs/First to Fourth Cross-Defendants)
Sparke Helmore (Defendants/Cross-Claimants)

File Number(s): 2012/282948

Judgment

These proceedings relate to the ownership and control of software known as Quik Series Software ("QSS"), which is used in the design and manufacture of cold form metal light gauge wall frames, trusses, flooring and roofing used in the construction of residential and commercial buildings.

The First Plaintiff, JR Consulting & Drafting Pty Ltd ("JRC"), is a company associated with Mr John Pacione. The Second Plaintiff, Hayes Steel Framing Systems Pty Ltd ("HSFS"), is also now a company associated with Mr Pacione. HSFS was incorporated on 3 February 2003 and Bradbury International Inc ("Bradbury International"), which is a manufacturer of roll forming machines, then held an 80% interest and JRC a 20% interest (Pacione 26.10.12 [34]); Cummings 14.10.13 [72.2]). Bradbury International was also the owner of Hayes International Ltd (a New Zealand company), which supplied rollforming machines manufactured in New Zealand. A Shareholders Agreement between Bradbury International and JRC was executed in March 2004 (Pacione 19.3.14 [77]). HSFS has been a wholly-owned subsidiary of JRC since 30 September 2008 (Pacione 19.3.14 [186]). A third entity, Steel Framing Systems International Pty Ltd ("SFSI") (which was previously known as SFS Australia Pty Ltd and changed its name on or about 8 December 2008 (T69)), is also a wholly-owned subsidiary of JRC, and Mr Pacione is a director of JRC, HSFS and SFSI. An earlier version of the Statement of Claim (Statement of Claim 26.10.12 [37]) pleaded that, after its authorisation to use QSS, SFSI acted as the agent of both JRC and HSFS and no leave was sought to withdraw that admission.

JRC and HSFS conducted and SFSI now conducts (at least in respect of new clients) a business supplying equipment to manufacture steel frame structures for residential and commercial construction and associated software. Mr Pacione described the Plaintiffs' business as follows:

"The Plaintiffs are in the business of designing and supplying manufacture systems for light gauge steel framing, utilising and integrating computer aided design software ("CAD"), computer aided manufacturing software ("CAM"), machinery and engineering data for the manufacture of light gauge steel wall panels, roof trusses and floors, typically used in residential, commercial and industrial buildings. As part of that work both Plaintiffs licence various software programs to their customers, including CAD software" (Pacione 26.10.12 [6]).

That evidence requires qualification to the extent that new business has for a significant time been undertaken, at least in respect of new clients, not by the Plaintiffs but by SFSI.

The First Defendant is Mr Robert Cummings, who developed QSS. The Second Defendant, Tanmari Pty Ltd ("Tanmari"), was incorporated on 11 November 2003 and is controlled by Mr Cummings and took over his business (Cummings 14.10.13 [72], [76]). On 2 November 2011, Tanmari and Mr Cummings assigned their rights in QSS to the Third Defendant, FrameCAD IP Ltd ("FIPL").

Mr Cummings' ownership of the relevant copyright is accepted in both parties' pleadings. Paragraphs 4 and 7 of the Plaintiffs' Amended Statement of Claim relevantly plead that:

"4. [Mr Cummings] was the author and the original owner of copyright in the QSS Application.

7 At all material times:

(a) copyright subsisted in the QSS Application; and

(b) [Mr Cummings] was the first owner of copyright in the QSS Application and would be the owner of copyright in any updates to the QSS Application when the copyright came into existence."

The term "QSS Application" is defined in paragraph 3 of the Amended Statement of Claim as a suite of computer programs known as Quik Series Software. Paragraph 7 of the Amended Statement of Claim is in turn particularised by a statement that the QSS Application and each of the computer programs was a literary work and that Mr Cummings was the author of that application and at the relevant time the updates to that application. The Defendants adopt the same position in pleading that copyright subsists in QSS as an original literary work (or works) under s 10 of the Copyright Act 1968 (Cth) and that Mr Cummings is and was at all material times the author of the computer programs (source code) for the purposes of s 35(2) of the Copyright Act. By paragraphs 1 and 2 of their Defence to the Cross-Claim, the Plaintiffs also admit that Mr Cummings made QSS and end user manuals and other documentation for use with QSS and updates and new releases of QSS and user documentation. These statements are an essential aspect of the Plaintiffs' claims.

Substantial evidence was led as to the history and functionality of QSS. By about 1996 or 1997, QSS included data files and software and was able to operate with rollforming machines, and included a computer numeric control file to permit the transfer of instructions between a computer and a roll form machine which contained the details necessary to produce the relevant steel item (Cummings 4.12.12 [16]-[21]), tables to calculate the placement of each structure in the relevant steel framework (Cummings 4.12.12 [24]) and "look-up" tables or data files containing the dimensions and other relevant information for each steel item within that framework (Cummings 4.12.12 [24]). Several user manuals in respect of the software and its applications are in evidence. After a user selects the relevant module which it wishes to use, the user can enter settings for, for example, applicable design standards and other information, and QSS is then used with third party computer aided design ("CAD") software to draw the roof, walls or floors, as the case may be, in layout form on the computer screen. The QSS software in turn applies the user's settings to that drawing to generate a drawing in elevation form and information about that drawing, and generates a file containing data that will be used to manufacture the relevant steel items.

From about 2002, JRC and later HSFS used (and, so far as new business is concerned, SFSI now uses) QSS software as one of several items used for the design and manufacture of steel framing. These include engineering tables and manuals in book and electronic form; computer aided manufacture software which reads the data file generated by QSS and prepares the relevant data for manufacturing; machine control software known as "frameware" that is used by the operator of the roll-form machinery to manufacture steel framing components from that data; and roll-form machinery which is controlled by the frameware.

The QSS software works together with CAD software, including software referred to as "IntelliCAD". That software is controlled by the IntelliCAD Technology Consortium, which is a group of third parties who use and license IntelliCAD and grants members the right to use and sub-license IntelliCAD and provides access to source code and technical support. There is an issue in these proceedings as to the impact of updates to IntelliCad on the use of the QSS software by the Plaintiffs. For a period, the IntelliCAD Technology Consortium had introduced a rule restricting its members from selling or marketing software programs that operated with earlier rather than current IntelliCAD code.

By orders made by Bergin CJ in Eq on 19 July 2013, questions of liability and quantum were separated, so that this aspect of the proceedings deals only with the question of liability. Each party relied on lengthy affidavits and made numerous objections, many of which were justified, to the admissibility of affidavit evidence of the other parties. Happily, many of the objections were resolved by agreement between Counsel and large parts of the affidavit evidence were not read. The Plaintiffs identified numerous issues to be determined in the proceedings, involving 40 issues in respect of the primary claim and 34 issues in respect of the Cross-Claim That list of issues, although elaborate, is of assistance in identifying the matters to be determined in the proceedings. Those issues can conveniently be grouped, as the Plaintiffs did in their lists of issues, into several categories. I will refer to those issues in addressing particular questions below.

A brief chronology of events

I should now outline several of the key events and agreements although I will refer to the terms of those agreements in greater detail below.

Mr Cummings and JRC entered into a Deed of Agreement date 28 July 2002 ("2002 Agreement") for the sale of a non-exclusive "interest" in respect of the QSS software. The matters in dispute between the parties include the nature of the right or interest sold under the 2002 Agreement; whether the 2002 Agreement was replaced or superseded by later licences granted to HSFS; and whether any licence under the 2002 Agreement was revoked or otherwise came to an end.

An agreement was entered into in July 2003 between HSFS, Mr Cummings and NBR (Australia) Pty Ltd ("NBR"), a company associated with a consulting engineer, Mr Nicholas Roulant (Ex P2, 48), by which Mr Cummings granted a software licence to HSFS which authorised HSFS to grant sub-licences of QSS (Pacione 26.10.12 [35], Ex P7, 3/143-158) ("Stramit Agreement"). The Defendants contend that, from July 2003, HSFS replaced JRC as the licensee of QSS with the right to grant sub-licences.

On 25 February 2004, Mr Cummings and Tanmari granted HSFS an exclusive licence, inter alia, to "use and exploit" QSS for the territory of Australia ("Exclusivity Agreement") (Pacione 26.10.12 [41], Ex P7, 3/185-199; Cummings 4.12.12 [87]). The Exclusivity Agreement was executed in the context of discussions between HSFS and Stramit, a customer, to provide it with exclusivity, which ended in about July 2004. The Defendants accept, in substance, that this included a licence of the copyright in QSS. The parties terminated the Exclusivity Agreement on 22 February 2005 with effect from 31 March 2005 (Pacione 26.10.12 [49], Ex P7, 3/232; Cummings 4.12.12 [104]-[105]).

By an undated letter on the letterhead of QSS, sent by Mr Cummings on 1 March 2004 (Ex P2, 79), Mr Cummings stated as follows:

"To whom it may concern:

This is to certify that [JRC] have been given non exclusive rights to on sell Quick Series Software as defined under the "Deed of Agreement" dated 28thth [sic] July 2002.

While not explicitly stated in this agreement, [JRC] has also been granted a non-exclusive right to market Quik Series Software under the HayesCAD banner."

At one point in cross-examination, Mr Pacione suggested that the rights held by HSFS arose from a technology licence from JRC, rather than from the 2004 Agreement. The Agreement headed "Technology Licence Agreement" between JRC, Mr Pacione and HSFS (Ex D2) was dated 12 March 2004 and recited that HSFS desired to acquire, and JRC and Mr Pacione desired to provide, a perpetual, royalty-free right to use "The Goods" and to grant sub-licences to them. The term "The Goods" was defined as a licence of the goods set out in Schedule 1 of the Agreement which referred, inter alia, to HayesCAD-QSS Version 11.231 and any other intellectual property subsequently licensed by JRC or Mr Pacione. Clause 2 of that agreement in turn provided that JRC and Mr Pacione licensed the irrevocable, worldwide, fully paid-up, royalty-free right and licence to use "the goods" as set out in that Schedule, with the right to grant sub-licences of the same scope to others, and represented and warranted that they had the right to license "The Goods" to HSFS under that agreement. That document was an annexure to the Shareholders Agreement between JRC and Bradbury International in respect of HSFS. That agreement was not given any substantial emphasis in the parties' pleadings or submissions. I do not consider that it had an overarching continuing operation, given the agreement subsequently entered between HSFS and Tanmari in August 2004 to which I refer below, which took effect as the basis of the parties' continuing relationship for the reasons noted below.

A further agreement titled "QSS Software Licence Agreement" between HSFS and Tanmari ("2004 Agreement") was executed on 11 August 2004 (Pacione 26.10.12 [46], Ex P7, 3/205). A Development Agreement, pursuant to cl 4.1 of the 2004 Agreement, was also signed on that date (Pacione 26.10.12 [48], Ex P7, 3/220; Cummings 4.12.12 [98]).

A memorandum of understanding was signed between Metal Forming Technology Ltd, a predecessor of FIPL, and Mr Cummings in September 2005 and there were further dealings and communications between FIPL and Mr Cummings in May 2006 (Taylor 31.10.13 [23]-[27]).

SFSI was incorporated in October 2007. The Plaintiffs contend that, in 2009, JRC sub-licensed SFSI to use QSS and that SFSI in turn licensed the use of that software to a number of its customers under contracts between SFSI and those customers.

Negotiations between Mr Cummings and FIPL for the sale of the interest in QSS to FIPL took place in mid-September 2011 (Taylor 31.10.13 [32]-[33]) and a Purchase Agreement ("FIPL Purchase Agreement") was executed on 31 October 2011 (Cummings 4.12.12 [33]; Taylor 31.10.13 [18]) and announced by FIPL in mid-November 2011 (Pacione 1.11.12 [13], Annexure "F"). The evidence of FIPL's chief executive, Mr Taylor, is that he first became aware of the terms of the 2004 Agreement on 18 November 2011, after the purchase of QSS had been completed (Taylor 31.10.13 [36]).

In December 2011, Tanmari and FIPL gave notice of breaches under the 2004 Agreement, by reference to licences granted by HSFS and/or SFSI on which licence fees had not been paid. On 13 January 2012, HSFS issued a notice of dispute to Tanmari under the 2004 Agreement. On 24 January 2012, Tanmari purported to terminate the 2004 Agreement by letter from its solicitors to HSFS's solicitors.

The witnesses

There are significant differences between the accounts given by Mr Pacione and Mr Cummings of particular conversations and of some events. Both were giving evidence of events that occurred many years ago, including conversations at about the time of the entry into the 2002 Agreement, the 2004 Agreement and the time the relationship between them deteriorated prior to April 2009. Both gave affidavit evidence setting out the effect of conversations between them, although Mr Cummings fairly conceded the limits of his recollection in cross-examination. Although I make several observations as to the credit of witnesses below, many issues in the proceedings turn on the construction of written documents, in the context of surrounding circumstances that emerge from contemporaneous correspondence or inferences that can properly be drawn from objective facts.

To the extent that credit issues need to be determined in respect of particular conversations, I have had regard to the fact that objective evidence is likely to be the most reliable basis for determining them. I summarised the relevant principles in Re Colorado Products Pty Ltd (in prov liq) [2014] NSWSC 789 at [10], where I noted that the credibility of a witness and his or her veracity may be tested by reference to the objective facts proved independently of the testimony given, in particular by reference to the documents in the case, by paying particular regard to his or her motives, and to the overall probabilities: Armagas Ltd v Mundogas SA [1985] 1 Ll R 1 at 57. I also referred to Atkin LJ's observation in Societe d'Avances Commerciales (Societe Anonyme Egyptienne) v Merchants' Marine Insurance Co (The "Palitana") [1924] 20 LI L Rep 140 at 152, recently cited by Sackar J in Craig v Silverbrook [2013] NSWSC 1687 at [141], that:

"an ounce of intrinsic merit or demerit in the evidence, that is to say, the value of the comparison of evidence with known facts, is worth pounds of demeanour."

In Camden v McKenzie [2007] QCA 136; [2008] 1 Qd R 39 at [34], Keane JA (as his Honour then was) similarly noted that:

"[u]sually, the rational resolution of an issue involving the credibility of witnesses will require reference to, and analysis of, any evidence independent of the parties which is apt to cast light on the probabilities of the situation."

That observation was recently cited with approval by Leeming JA (with whom Barrett JA and Tobias AJA agreed) in State of New South Wales v Hunt [2014] NSWCA 47 at [56].

I should, however, make several observations about the key witnesses. Mr Pacione's evidence was accurate and precise as to many issues including the technical aspects of his companies' business, and some aspects of it were supported by surrounding correspondence. He was plainly well-informed as to the issues in the Plaintiffs' case and it seemed to me that he sought to minimise the disclosure of matters that might be adverse to that case and would not make any concession that might be adverse to that case. His affidavit evidence verged on being misleading in respect of an important issue in the case, referring at length to the nature of the business of the Plaintiffs, JRC and HSFS, without acknowledging that HSFS had substantially ceased to conduct that business (in particular, ceasing to deal with new customers) in 2009 and that SFSI (which is not a Plaintiff) had, in effect, assumed its business. His evidence in cross-examination as to the nature of any continuing business of HSFS was contradictory, as he shifted positions as to the extent to which HSFS had conducted any business after that time. His attempt to avoid, in affidavit evidence, recognition of the confidentiality of the licence key generator supplied by Mr Cummings or Tanmari to JRC or HSFS was also implausible.

The Plaintiffs make adverse credit submissions in respect of both Mr Cummings and Mr Taylor, and submit that their evidence ought not be accepted where it is uncorroborated by independent evidence. In particular, the Plaintiffs submit that the Court should not accept Mr Cummings' evidence in relation to the circumstances surrounding the entry of the 2002 Agreement; the scope of the 2002 Agreement; his knowledge of SFSI; or the extent of his involvement in the decision-making concerning the notification of alleged breaches and the purported termination of the 2004 Agreement. I have considered the detailed criticisms made of Mr Cummings' evidence and the examples that the Plaintiffs give of evidence which is said to be internally inconsistent, untrue or contradicted by other evidence. I do not consider that Mr Cummings' evidence that he understood the 2002 Agreement to be limited to Stratco, a customer of JRC, to be adverse to his credit. There was nothing implausible about such an understanding, given the context of the entry into that agreement, notwithstanding that subjective intention is not taken into account in contractual construction, by reason of the objective theory of contract.

I accept that Mr Cummings' affidavit evidence may well have overstated the extent of his recollection of particular conversations and that there were occasions where Mr Cummings' evidence in cross-examination qualified his affidavit evidence. In some cases, that may be a matter adverse to a witness's credit. In this case, it reflected Mr Cummings' honest and direct answers to questions in cross-examination and his readiness to accept the limits of his recollection. Mr Cummings, without hesitation, conceded matters that were apparently adverse to his case, including the fact that he had withdrawn from engagement with Mr Pacione in the later part of the relevant period. I accept that (as the Plaintiffs contend) Mr Cummings cannot be treated by the Court as being independent of FIPL, where he is under a continuing retainer to provide services to FIPL. However, lack of independence is not the same as lack of honesty. I formed a generally favourable view of Mr Cummings' evidence, particularly in cross-examination.

The Plaintiffs also submitted, with some justification, that Mr Taylor's evidence ought also be approached with circumspection. They submit, and I accept, that there were occasions on which he was evasive, as they put it, or at least reluctant to address questions that he considered might be adverse to FIPL's interests (for example, T355; T373-374) and there were points where he did not accept matters that obviously followed form his evidence, including that he was seeking to dissuade a third party, Golden Homes, from dealing with SFSI and to attract its business to FIPL in December 2011 (T366-367). Having said that, Mr Taylor's evidence was largely relevant to the question of FIPL's knowledge of the 2004 Agreement and its purposes in dealings with Mr Cummings, Tanmari and the Plaintiffs. So far as his and FIPL's knowledge of the 2004 Agreement, at the time FIPL entered the FIPL Purchase Agreement is concerned, his evidence is plausible and corroborated by Mr Cummings' evidence which I accept, and the objective evidence provides the strongest basis for findings as to the purposes of FIPL in respect of the relevant dealings with Mr Cummings, Tanmari and the Plaintiffs. I am not satisfied by one aspect of Mr Taylor's evidence as to FIPL's standing to bring a claim for trade mart infringement, to which I will refer below.

The nature of the interest acquired by JRC under the 2002 Agreement (SOC [9]-[14]) (Plaintiffs' Issues 1, 5)

I now turn to the substantive issues raised in the proceedings. The first and fifth issues identified by the Plaintiffs involve alternative characterisations of the rights acquired by JRC under the 2002 Agreement and raise substantially overlapping issues. The Plaintiffs relevantly plead:

"10. Pursuant to the terms of the [2002 Agreement] [Mr Cummings] assigned to [JRC] an interest in copyright in the QSS Application including updates to QSS Application.

11. In the premises, [JRC] is an owner of an interest in copyright in the QSS Application and updates to the QSS application to non-exclusively use and sub-license the use of the QSS application in the development and use of [JRC's] steel frame manufacturing system."

The Plaintiffs' primary contention is that, under the 2002 Agreement, JRC purchased a non-exclusive interest in the copyright in QSS, which does not limit Mr Cummings' ownership or ability to use and sell QSS. The Plaintiffs contend that the 2002 Agreement is ongoing and was not open to unilateral termination, so far as it was a purchase agreement and rights vested in JRC without time limitation.

The Plaintiffs alternatively contend that the 2002 Agreement grants JRC a non-exclusive licence to QSS. Paragraph 12 of the Plaintiffs' Amended Statement of Claim relevantly pleads that:

"12. Further, and in the alternative, on or about 28 July 2002 [Mr Cummings] granted [JRC] a non-exclusive licence in the QSS Application to use and sub-licence the use of the QSS Application in [JRC's] steel framing manufacturing system."

This pleading is particularised by reference to recitals B and C and clause 2 of the 2002 Agreement. The Plaintiffs submit that, if the 2002 Agreement does not assign JRC a non-exclusive interest in QSS (and, implicitly, in the copyright constituting that application), then that agreement grants JRC a non-exclusive licence of the copyright in QSS and is not a mere right to resell QSS without any copyright rights. I will address that contention below.

It is common ground that the 2002 Agreement must be construed objectively. I have had regard to well-established principles as to the manner in which commercial contracts should be interpreted. In Australian Broadcasting Commission v Australasian Performing Right Association Ltd [1973] HCA 36; (1973) 129 CLR 99 at 109, Gibbs J (as his Honour then was) observed that:

"It is trite law that the primary duty of a court in construing a written contract is to endeavour to discover the intention of the parties from the words of the instrument in which the contract is embodied. Of course the whole of the instrument has to be considered, since the meaning of any one part of it may be revealed by other parts, and the words of every clause must if possible be construed so as to render them all harmonious one with another. If the words used are unambiguous the court must give effect to them, notwithstanding that the result may appear capricious or unreasonable, and notwithstanding that it may be guessed or suspected that the parties intended something different. The court has no power to remake or amend a contract for the purpose of avoiding a result which is considered to be inconvenient or unjust. On the other hand, if the language is open to two constructions, that will be preferred which will avoid consequences which appear to be capricious, unreasonable, inconvenient or unjust."

Attention must be given to the language used by the parties and the commercial circumstances that the document addresses and the objects that it is intended to secure: McCann v Switzerland Insurance Australia Ltd [2000] HCA 65; (2000) 203 CLR 579 at 589 [22] (per Gleeson CJ). In Pacific Carriers Ltd v BNP Paribas [2004] HCA 35; (2004) 218 CLR 451 at [22], the High Court noted that:

"The construction of commercial contracts is to be determined by what a reasonable person in the position of [the contracting party] would have understood them to mean (Gissing v Gissing [1971] AC 886 at 906; Christopher Hill Ltd v Ashington Piggeries Ltd [1972] AC 441 at 502; ABC v XIVth Commonwealth Games Ltd (1988) 18 NSWLR 540). That requires consideration, not only of the text of the documents, but also the surrounding circumstances known to the parties, and the purpose and object of the transaction (Investors Compensation Scheme Ltd v West Bromwich Building Society [1998] 1 WLR 896; [1998] 1 All ER 98.) In Codelfa Construction Pty Ltd v State Rail Authority of NSW ((1982) 149 CLR 337 at 350. See further Royal Botanic Gardens and Domain Trust v South Sydney City Council (2002) 76 ALJR 436 at 445 [39]; 186 ALR 289 at 301) ..."

The Plaintiffs refer, uncontroversially, to the statement of the relevant principles in Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52; (2004) 219 CLR 165 at [40], where the High Court observed (citations omitted):

"It is not the subjective beliefs or understandings of the parties about their rights and liabilities that govern their contractual relations. What matters is what each party by words and conduct would have led a reasonable person in the position of the other party to believe. References to the common intention of the parties to a contract are to be understood as referring to what a reasonable person would understand by the language in which the parties have expressed their agreement. The meaning of the terms of a contractual document is to be determined by what a reasonable person would have understood them to mean. That, normally, requires consideration not only of the text, but also of the surrounding circumstances known to the parties, and the purpose and object of the transaction."

The approach was confirmed in Electricity Generation Corporation (t/as Verve Energy) v Woodside Energy Ltd [2014] HCA 7; 306 ALR 25 at [35] where French CJ, Hayne, Crennan and Kiefel JJ observed that (citations omitted):

"[T]his Court has reaffirmed the objective approach to be adopted in determining the rights and liabilities of parties to a contract. The meaning of the terms of a commercial contract is to be determined by what a reasonable businessperson would have understood those terms to mean. That approach is not unfamiliar. As reaffirmed, it will require consideration of the language used by the parties, the surrounding circumstances known to them and the commercial purpose or objects to be secured by the contract. Appreciation of the commercial purpose or objects is facilitated by an understanding 'of the genesis of the transaction, the background, the context [and] the market in which the parties are operating'.

The Plaintiffs also point out that the Court must construe the words of the 2002 Agreement in the context of the surrounding circumstances and point to the Court of Appeal's decision in Mainteck Services Pty Ltd v Stein Heurtey SA [2014] NSWCA 184, where Leeming JA (with whom Ward and Emmett JJA agreed) observed (at [71]) that the mandatory words "will require consideration" in the passage from Electricity Generation Corporation above that I have quoted above require that the surrounding circumstances be considered to construe the meaning of the words of a contract in context. That view was in turn approved by the Full Court of the Federal Court in Stratton Finance Pty Ltd v Webb [2014] FACFC 110 at [40]. The relevant principles were summarised by Bergin CJ in Eq in Carlow Castle Pty Ltd t/as Greenhill Capital Partners v Aztec Resources Ltd [2014] NSWCA 123 at [70] (with whom Barrett JA agreed at [1]) as including, relevantly, that the meaning of words in a contract are to be determined objectively, with attention to be given to the language of the contract, the commercial circumstances the contract addresses, the purpose of the transaction and the objects intended to be secured by it.

I also understand it to be common ground between the parties that the Court can have regard to the recitals to the 2002 Agreement as an aid to construction of the operative provisions of that agreement. The Plaintiffs point out that the recitals are a means by which the surrounding circumstances and purpose of the transaction can be ascertained: Franklins Pty Ltd v Metcash Trading Ltd [2009] NSWCA 407; (2009) 76 NSWLR 603 at [380] per Campbell JA. They also refer to Onesteel Manufacturing Pty Ltd v BlueScope Steel (AIS) Pty Ltd [2013] NSWCA 27; (2013) 85 NSWLR 1 at [63] where Allsop P (as his Honour then was) observed that:

"The recitals to the agreement set out those aspects of the background that give explanation to the transaction. There may be other background facts, but the recitals reveal the background chosen by the parties by way of the identification of relevant context. The recitals can assist in interpretation of operative provisions, though they do not control the latter's operation when clear and unambiguous..."

I should first address the events leading to the execution of the 2002 Agreement. Mr Pacione met Mr Cummings in about April 2002 and expressed interest in QSS. Mr Pacione was then conducting business through JRC and he and his wife were its sole directors and shareholders (Ex D9, Tab 10). Mr Pacione's evidence is that he came to know Mr Cummings, as the programmer of design software known as QSS, when he was seeking to develop a new CAD package for a project on behalf of a customer, Stratco. Mr Pacione's evidence is that he purchased a single user licence for QSS on 22 April 2002 (Pacione 26.10.12 [14]).

Mr Cummings gives evidence of a conversation in early 2002 in which Mr Pacione requested him to give a demonstration of QSS to Stratco and that, in late April 2002 or early May 2002, he attended Stratco's site with Mr Pacione to give a demonstration of QSS (Cummings 4.12.12 [55]-[56]). Mr Pacione denies the conversation, or at least denies saying that Stratco wanted to use QSS (Pacione 28.1.13[11]). It is clear that Stratco did wish to use QSS, at least as a necessary part of the system to be supplied to it by JRC, and it seems to me likely that there would have been discussion of that matter so far as Mr Cummings was being asked to demonstrate the product to Stratco. Many of the disputed conversations as to this matter were ultimately not in issue, because the relevant paragraphs of Mr Cummings' affidavit related to the parties' intentions in respect of entry into the relevant contracts and were not read.

Mr Pacione in turn refers, in his evidence in reply (Pacione 28.1.13 [12]), to a meeting with Mr Cummings in April 2002 where a discussion took place as follows:

"Pacione: I am happy to pay to develop the software (QSS) so that I can use it in our System [sic] but I need to own it. It's not fair that I should pay for the development so that others can benefit.

Cummings: As long as it's not exclusive, I don't mind. I won't sell exclusively, not unless we are talking about a lot of money.

Pacione: It's fair that the things we are working on now, and paying for, are owned exclusively by me.

Cummings: If you pay for it, you can have it, but that doesn't give you an exclusive right to the whole software package, just what you pay for.

Pacione: OK, then we'll just separate that in the Agreement.

Cummings: OK."

This conversation seems to me to go to the parties' subjective intentions in entering the 2002 Agreement and it concludes with a reference to the fact that what was discussed would be reflected in the agreement. It seems to me to be of little utility, because it involved each party asserting its competing commercial objective, namely, Mr Pacione's objective to own what he paid for development of and Mr Cummings' unwillingness to sell the software package. The concept of "ownership" on a non-exclusive basis also has its own difficulties.

Mr Pacione's evidence (Pacione 26.10.12 [20]) is that he handed the 2002 Agreement to Mr Cummings on 28 July 2002 at Mr Cummings' home office; Mr Cummings then read through the agreement; Mr Cummings then signed the agreement in the presence of his wife and Mr Pacione also signed it. Mr Cummings did not have legal advice in respect of the entry into the agreement. Mr Pacione's evidence is that, on 13 August 2002, Mr Cummings handed him a white labelled compact disk with the title "Quik Series Source Code for HayesCad and Stratco" and a copy of the disc and its label is in evidence (Pacione 26.10.12 [22]). Mr Pacione's evidence is that a discussion followed as to the provision of source code, in which Mr Cummings pointed out that any source code would be out of date with each new upgrade; Mr Pacione suggested that he could be given updated source code every year or so; and Mr Cummings responded in a manner that seems to me to have left open the question of any provision of future source code (Pacione 26.10.12 [23]). The relevant discussion was not, in any event, in a form that either involved an admission as to the terms of the 2002 Agreement or any separate contractual obligation.

I will refer to the parties' submissions, before turning to a more detailed review of the terms of the 2002 Agreement. It is difficult to summarise those submissions in any simple way, because each submission was complex, and the issues became more complex as the parties often responded to the other party's submission by developing increasingly elaborate reformulations and variations of their respective submissions. The result was that the parties' submissions as to this issue had many individual points, both affirmatively and by way of rebuttal, but rather less by way of overall structure. The Plaintiffs submit that several textual indicators in the 2002 Agreement indicate that it amounted to an assignment of property in QSS (and, by extension, the copyright in QSS) to JRC rather than a licence. First, they point out that cl 2 of the 2002 Agreement uses "transfer", which they submit is a word of assignment. Second, they point out that cl 2 is headed "SALE" and there is no provision in the contract that prevents the Court from using the heading to construe the agreement. Third, they point out that Mr Cummings is described as "The Vendor" in the description of the parties. Fourth, they point out that the recitals to the 2002 Agreement use the words "acquiring interest" (in Recital B), "sale of an interest" (in Recital C) and "sells, assign and transfer ... right title and interest" (in Recital D) which they submit are also words of assignment. They also submit that the use of the word "interest" in the 2002 Agreement confirms that the agreement brings about an assignment rather than a licence, since a licence is a personal right and does not involve a proprietary interest: Cowell v Rosehill Racecourse Co Ltd [1937] HCA 17; (1937) 56 CLR 605. I do not consider that the matters to which the Plaintiffs refer lead to the inference which they seek to draw from them, since the 2002 Agreement was on any view at least the sale of property, namely, the compact disc containing the software, and the language of the agreement (including the characterisation of the transaction as a sale of "The Goods" to which I will refer below) is consistent with that matter.

The Plaintiffs also contend that the other operative terms of the 2002 Agreement support a construction of it as an assignment of copyright, so far as JRC is given rights that are not generally given to a mere non-exclusive licensee of copyright such as a right to modify (in cl 5), which they contend is an incident of copyright under s 31(1)(a)(vi) of the Copyright Act, and a right to receive source code (in cl 6). I will address those clauses below. The Plaintiffs also point out that the 2002 Agreement expressly provides that the agreement does not prevent Mr Cummings from selling, assigning, transferring or licensing the QSS Application (Recital C) and contend that this would not be necessary if Mr Cummings had merely granted JRC a non-exclusive licence, because JRC as a non-exclusive licensee would have no expectation of restricting Mr Cummings' use of the software. I do not accept this submission. Even if an intellectual property lawyer might (or might not) have treated that matter as implicit in other aspects of the agreement, there would be no reason for the parties not to make that important matter clear even if the agreement was no more than a non-exclusive licence of the copyright or, as the Defendants submit, a right to sell physical copies of QSS only.

The Plaintiffs also submit that the 2002 Agreement is an assignment of copyright in QSS even if QSS includes future copyright works. They do not admit that all updates and new releases of QSS constituted new copyright works, and I will address that issue below. However, they submit that, to the extent that updates and new releases constituted new copyright works, the assignment of a proprietary interest in QSS under the 2002 Agreement covered those works, because Mr Cummings is able to assign future copyright in future works under s 197 of the Copyright Act, provided that he would be the owner of the copyright on it coming into existence. This issue does not arise since, for the reasons set out below, I do not consider that the 2002 Agreement amounts to an assignment of the copyright in QSS to JRC.

The Defendants submit, in their opening written submissions, that the licence granted to HSFS under the 2002 Agreement is a revocable licence of the kind identified in Cowell v Rosehill Racecourse Co Ltd above and was subsequently revoked. They submit that a "non-exclusive interest in copyright" is not recognised under the Copyright Act. The Plaintiffs in turn respond that the Copyright Act permits copyright to be assigned "in any way" under s 196(2) of the Copyright Act and recognises that a person may have an interest in copyright rather than own the whole of the copyright under s 196(4) of the Copyright Act. The Plaintiffs also respond that JRC's interest under the 2002 Agreement is not revocable because, if it did not acquire a proprietary interest in QSS, that licence was coupled with a proprietary interest that is also not revocable: Cowell v Rosehill Racecourse Ltd above.

The Defendants submit, additionally or alternatively, that the 2002 Agreement is no more than a right to distribute, market or sell the software in the nature of distribution rights, although they accept that the agreement conferred on JRC either an implied licence to do whatever acts comprised in the copyright in QSS that were necessary for use by the customer of JRC or an express non-exclusive licence for JRC or its customer to do acts that were incidental to the use of the software. They submit that:

"The 2002 Agreement is analogous to the sale of a Microsoft Office Software package. The purchaser gets title to the disks embodying the software. This is non-exclusive in that Microsoft can sell other disks embodying the software to other people, and a non-exclusive licence to use the software."

The Defendants also submit, in oral submission, that the 2002 Agreement does not amount to a licence and involves a non-exclusive sale of an interest in physical goods and an implied licence to use the particular physical copy (T32). It does not seem to me that the terms of the agreement support so limited a reading of it which would, in particular, be inconsistent with the provisions dealing with modification and the provision of the source code for the software to which I have referred above.

The Defendants in turn contend that the 2002 Agreement does not contain a clear grant of a right to reproduce the software or to do any other act comprised in the copyright for the purposes of s 31 of the Copyright Act and should be construed as granting no more than a right to distribute, market or sell the software, in the nature of distribution rights. They contend that there is a significant distinction between copyright and the property in the physical thing in which the copyright is embodied. They point out that copyright is an exclusive right as contemplated by ss 13, 26, 35, 115, 196 and 197 of the Copyright Act and that copyright is a species of personal property distinct from the property in goods that embody or reproduce the work or other subject-matter: Pacific Film Laboratories v Commissioner of Taxation [1970] HCA 36; (1970) 121 CLR 154 at 165-170 per Windeyer J. They contend that a right to sell or distribute QSS is in the nature of a distribution right, and that it is not a right to do an act comprised in the copyright: Avel Pty Ltd v Multicoin Amusements Pty Ltd [1990] HCA 58; (1990) 171 CLR 88 at 93-94 per Mason CJ, Deane and Gaudron JJ; 103 per Dawson J; and 116 per McHugh J. They submit that there is no right given under the 2002 Agreement to do any act comprised in the copyright, other than the implied right to do whatever acts comprised in the copyright were necessary to use the software. The Defendants also submit that the use of words such as "transfer of an interest" in the 2002 Agreement are not determinative and must be read together with the words "non-exclusive" in the context of the agreement as a whole. They also rely on Mr Cummings' evidence in cross-examination that it was not his intention to do anything other than grant a right to on-sell; however, evidence of subjective intention of this character is not admissible as to a question of contractual construction.

The Plaintiffs respond that a reading of the 2002 Agreement as limited to a non-exclusive sale of an interest in physical goods and an implied licence to use the particular physical copy is not open on the pleadings, since the Defendants admitted that Mr Cummings had granted a non-exclusive licence to JRC to use QSS in the development and application of steel construction frame manufacturing systems when it was developed, in its version as it then existed (Defence [10(b)]). That paragraph reads as follows:

"10 In response to the paragraph 10 of the Amended Statement of Claim, the Defendants:

b admit that [Mr Cummings] granted a non-exclusive licence to [JRC] to use the 28 July 2002 Version for [JRC's] use in the development and application of steel construction frame manufacturing systems when it was developed, but that at the time of the [2002] Agreement, no such system existed."

The Defendants' Cross-Claim also pleads that the purpose of the 2002 Agreement was to grant a non-exclusive licence in a steel frame manufacturing system when it was developed, limited to the then version of that software (Cross Claim [20(ii)(b)]). The Defendants did not seek leave to withdraw the admission involved in those pleadings and it does not seem to me open to them to advance the more limited position in submissions. In the event, the position taken in the Defence is consistent with the findings that I reach below as a matter of construction of the 2002 Agreement.

The Plaintiffs also respond that, if the 2002 Agreement was only intended to sell the physical property in the compact disc comprising the software, the sale of the software could have been recorded in a one page invoice. While I accept that proposition, so far as it goes, it is of course possible that JRC and Mr Pacione (who proffered the relevant agreement) drafted a more complex document than was necessary. Mr Cummings was not legally represented in the transaction, and it would not be surprising that he would not then have realised that that document was unnecessarily complex, although he later took a position of that kind in declining to enter a separate agreement in respect of each acquisition of software for clients of JRC.

The Plaintiffs point to surrounding circumstances in respect of the 2002 Agreement including that the subject of the 2002 Agreement is intangible property and that Mr Cummings is a software developer and not a manufacturer of physical items. They point out that Mr Cummings gave JRC one compact disc containing the QSS software (Pacione 26.10.12, Ex P7, 3/55) and also emailed JRC an electronic copy of the software (Pacione 26.10.12, Ex P7, 3/34). They contend that the only way that JRC can "use" QSS in the "application of steel construction frame manufacturing systems", as contemplated by Recital B of the 2002 Agreement, is if it can reproduce the electronic copy that Mr Cummings emailed to JRC. They also submit that, even if the 2002 Agreement was limited to a project with Stratco, which was its immediate context, there were at least two Stratco sites (Cummings 4.12.12 [70]). Mr Cummings in turn accepted in cross-examination that JRC could only on-sell QSS if he supplied further disks, and accepted that there was no arrangement or agreement to do so and that would be addressed by a "personal understanding" (T278). The Plaintiffs also submit that JRC's customers' use of QSS would necessarily involve the customer exercising copyright, since the software will necessarily involve a reproduction in material form on the customer's computer RAM. They point to an exception for temporary incidental reproduction made as a necessary part of the technical process of using a work, but that this only applies if the reproduction is made from a non-infringing copy, and submit that JRC must be in a position to provide its customer with a non-infringing copy of the software under s 43B of the Copyright Act.

The Plaintiffs in turn seek to distinguish Avel Pty Ltd v Multicoin Amusements above, on which the Defendants rely as I noted above, as involving a distribution agreement for manufactured physical items, and contend that the subject of the 2002 Agreement is "the rights to" the software package, not the software package itself. The Plaintiffs also point out that the distribution agreement in issue in Avel Pty Ltd v Multicoin Amusements above referred to the rights "of distribution" (which is not one of a copyright owner's exclusive rights under s 31 of the Copyright Act) and did not expressly include any other rights, whereas the 2002 Agreement refers to the right to modify which is, as I noted above, a right of a copyright owner under s 31(a)(vi) of the Copyright Act. The Plaintiffs contend that a construction of the 2002 Agreement as relating to a sale of a physical item is inconsistent with cl 5 of that agreement which grants JRC the right to modify the software.

The submissions to which I have referred above are, as this summary of them indicates, complex and sophisticated, although somewhat fragmented. Notwithstanding the sophistication of those arguments and the extent to which both parties have drawn on principles of intellectual property law - which were plainly not part of the surrounding circumstances known to both parties, where at least Mr Cummings was not legally represented in respect of the entry into the 2002 Agreement - it seems to me that the nature of the rights conferred by that agreement are to be determined primarily as a matter of the construction of its terms, to which I now turn.

Recital A of the 2002 Agreement recorded that Mr Cummings was the developer and had copyright and proprietorship of "The Goods". That term was defined in cl 1.1 as:

"A right to the Software Package referred to as Quik Series Software and includes Quik Roof, Quick [sic] Truss, Quik Frame and Quik Floor and also includes the Know How, methodology and trade secrets necessary for the implementation of "The Goods"."

The focus in this definition is not on the intellectual property comprised in the software, but on the right to (implicitly, use) the software package, and that focus is emphasised by the reference to the "implementation" of "The Goods" at the end of the definition. Clause 1.2 in turn defines the term "The Material" which includes manuals and source codes.

Recitals B and C in turn provide that:

"B. [JRC] is desirous of acquiring an interest in "The Goods" for it's [sic] use in the development and application of steel construction frame manufacturing systems.

C. This agreement is for the non-exclusive sale of an interest to "The Goods" to [JRC] and does not prevent [Robert Cummings & Associates] from selling, assigning, transferring or licensing "The Goods"."

Essential incidents of ownership of the software are expressly reserved by Recital C to Mr Cummings, including the right to sell it or assign it to another person. Recital D in turn recites that Mr Cummings "sells, assigns and transfers" a "non-exclusive right, title and interest" to "The Goods" to JRC for the consideration of $25,000. That is, of course, not an operative provision and cannot expand the transaction contemplated by the operative provisions on their proper construction, although it is relevant to the construction of those provisions. Recital E refers to an amount of the consideration attributable to development of the software for JRC, which is dealt with in cl 4 of the 2002 Agreement. Mr Cummings subsequently invoiced JRC for that work.

Clause 2 of the 2002 Agreement provides for Mr Cummings to "transfer" to JRC an interest in and right to "The Goods", as defined. Clauses 3 and 4 provide for JRC to pay the purchase price by a deposit of $7,500, a further amount of $15,000 on completion of additional development, and $7,500 on "installation/delivery of "The Goods'", as "full and final payment" for "The Goods". I interpolate that this clause suggests that the substance of the transaction was a sale of "The Goods" at a point in time, which would be completed on delivery of "The Goods" in this manner and payment of the balance due, and that provision casts light on Mr Cummings' obligations as set out in cl 6 to which I will refer below.

Clause 5 of the 2002 Agreement dealt with further obligations by JRC and provides that:

"[JRC] will consult and will give first option to [Robert Cummings & Associates] for any application, adaptation or modification of "The Goods", provided such consultation is supplied by [Robert Cummings & Associates] at standard and reasonable commercial rates.

Any costs incurred for any application, modification of "The Goods" as instigated by [JRC] will be at the expense of [JRC]."

The effect of the clause was that Mr Cummings had the first option for development work. It is implicit in that provision that the parties contemplated that a third party could undertake such applications, adaptations or modifications on JRC's behalf if Mr Cummings did not take up that option. Unless JRC had an implied licence to undertake development work in respect of the software, it would be exposed to the risk that Mr Cummings might not choose to provide those services, and it would not be able to further develop "The Goods" beyond applications, adaptations or modifications which could occur without infringement of Mr Cummings' copyright.

Clause 6 of the 2002 Agreement in turn provides that:

"Subject to Section 5, Instruction Manuals and staff training as required to establish an operational Software system as being used by an operator at any location required.

All relevant "Materials" pertaining to the design and development of "The Goods", including functional specifications and source codes.

The term "The Materials" used in this clause is in turn defined as "all books, manuals, specifications, programming source codes, instructions whether in a written or digitised form relating to "The Goods"".

Clause 6 of the 2002 Agreement is plainly not well drafted, but appears to assume that there is an obligation by Mr Cummings to deliver or provide these materials. The Plaintiffs rely on this clause as imposing a continuing obligation on Mr Cummings. Any continuing obligation in respect of instruction manuals and staff training is expressly subject to cl 5 of the 2002 Agreement, which provides for the first option to Robert Cummings & Associates for the specified matters, and contemplates that they may be supplied at standard and reasonable commercial rates. So far as cl 5 of the 2002 Agreement is expressly framed as an option to Robert Cummings & Associates to supply the services, it does not seem to me that an obligation to do so can exist. I also do not read the second paragraph of cl 6 as imposing a continuing obligation. The "Materials" referred to are those that relate to the design and development of "The Goods" including functional specifications and source codes. It seems to me that the term "The Goods" refers to the software package that existed at the time of the 2002 Agreement, since there is nothing in the terms of the agreement that gives it an ambulatory operation in time, and the relevant "Materials" are therefore those which relate to the design and development of "The Goods" at the relevant time. The third paragraph of cl 6 in turn refers to complete and updated set-up disks as required to load "the latest, complete and operational version" of "The Goods". I similarly read that sentence as applying at the time of the relevant supply, so as to require at that time that the disks be complete and updated, and contain the latest, complete and an operational version of "The Goods". The concept of the supply of goods in turn seems to me to be consistent with a transaction that takes place at a point in time, at which property in "The Goods" is handed over. It seems to that that paragraph, read in that way, makes commercial sense, so far as it is read as ensuring that the version of "The Goods" acquired by JRC was both "complete" and "updated", in the sense of being up-to-date, at the time "The Goods" were acquired. In my view, clearer language would have been required to impose a further updating obligation continuing indefinitely after the supply of "The Goods" was completed, than is contained in that clause.

Another significant contemporaneous indicator of the nature of the relevant transaction is the fact that the compact disk by which Mr Cummings supplied the relevant source code to JRC asserted copyright in QSS and that "all rights [were] reserved" by Mr Cummings and did not recognise any interest of JRC in the copyright, and JRC did not then assert such an interest or protest Mr Cummings' assertion of the ownership of the copyright which it now claims it had just bought. The absence of such an assertion seems to me to be relevant as part of the surrounding circumstances in respect of the 2002 Agreement and as an admission by JRC.

It does not seem to me that the 2002 Agreement amounted to a sale of an interest in the copyright in QSS, where there is no focus upon the intellectual property in the terms of the 2002 Agreement and the commercial purpose of the transaction could be effected, consistent with the terms of that agreement, by the sale of the compact disc holding the software and the conferral of a right to use that software upon JRC. The transaction seems to me to have been, in substance, a sale of software together with a non-exclusive licence to use that software and, under cl 5 of the 2002 Agreement, to undertake permitted applications, adaptations and modifications of that software.

I reach that conclusion based upon the terms of the 2002 Agreement and the contemporaneous circumstances and without reference to subsequent events. However, that the recitals of fact in, and terms of, subsequent agreements formed by the parties, which seem to me to be admissible so far as they give rise to admissions of fact against JRC and Mr Pacione, support that reading of the 2002 Agreement. It is well-recognised, of course, that post-contractual statements or conduct are not generally admissible to aid in the construction of a written contract: Agricultural and Rural Finance Pty Ltd v Gardiner [2008] HCA 57; 238 CLR 570 at [35] per Gummow, Hayne and Kieffel JJ; Johnson v Brightstars Holding Company Pty Ltd [2014] NSWCA 150 at [120] per Basten JA. However, post-contractual conduct may be admissible as an admission by one party as to the terms of a contract: Johnson v Brightstars Holding Company Pty Ltd above at [84] per Beazley P. Basten JA (with whom Gleeson JA agreed at [134]) also there observed at [121] that:

"... where [subsequent conduct] provides evidence of facts, the assertion of which is against the interests of one party, it may be admissible as an admission by that party. However, to the extent that the evidence reveals an opinion as to a question of law rather than fact, the admission may be irrelevant or valueless. ... Alternatively, the evidence may establish contextual facts in existence at the time the contract was executed."

I am conscious that the Plaintiffs submit that copyright ownership is a matter of law and an admission as to that matter is not admissible as a matter of contractual construction (Johnston v Brightstars above at [80], [81] per Beazley P) or would have little weight (Johnston v Brightstars above at [121] per Basten JA (with whom Gleeson JA agreed)). However, the identification of what was sold by the 2002 Agreement does not seem to involve the application of a legal standard so as to fall within that principle or to be primarily or substantially a matter to be determined by the application of copyright law. It also seems to me that, where JRC and HSFS were both under Mr Pacione's day-to-day control, I can also properly treat the position taken by HSFS (under Mr Pacione's management and control) as also indicating JRC's position (under Mr Pacione's management and control), at least in respect of these matters where there was no conflict in their respective interests. To put it another way, it is inconceivable that HSFS, by Mr Pacione, would conduct itself on the basis that Mr Cummings had exclusive ownership of the copyright in QSS unless JRC, by Mr Pacione, was also conducting itself on that basis.

As I noted above, the Stramit Agreement (Ex P7, 3/143-158) was signed between Mr Cummings (trading as Robert Cummings & Associates), NBR and HSFS. Recital A provided that Mr Cummings "is the developer and has copyright and proprietorship of Quik Series Software". It seems to me that this recital is binding upon HSFS as an admission as to that matter, and is inconsistent with any suggestion that JRC then had any ownership interest, non-exclusive or otherwise, in the copyright in QSS. Recital C of the Stramit Agreement in turn provided that JRC:

"has a non-exclusive right to the software package referred to as HayesCAD as referred to in "The Product" to be used in "The Project."

That statement of a "non-exclusive right" is not an assertion of an ownership interest analogous to copyright in the software package. "The Product" is in turn defined as a "software program referred to as HayesCAD" and as including other "Quik Series Products" of which examples are given. "The Project" is defined as a request by Stramit to HSFS to develop, design, build and implement certain matters associated with a facility to manufacture steel wall panels and roof trusses. Recital E in turn provides that all payment for "The Product" is to be made to Mr Cummings and, in consideration of the payment by HSFS to Mr Cummings of a specified sum, Mr Cummings and NBR will supply "The Product". It would be surprising, to say the least, if HSFS were to choose to purchase from Mr Cummings a product that JRC owned and, on the case it now advances, was free to sub-license to HSFS on whatever terms it chose, without further payment to Mr Cummings.

Clause 5(a) of the Stramit Agreement in turn provides that Mr Cummings will provide one site licence for the use of any QSS used to deliver the package known as HayesCAD. Clause 5(b) provides that HSFS will sub-license any software provided by Mr Cummings, and packaged with HayesCAD, only to Stramit. Clause 5(c) provides that:

"All software used in the project will be referred to as HayesCAD, for simplicity, although it is agreed by all parties that parts of the total software package, in particular, the Quik Series Truss Analysis Function used in the project is the property of [Mr Cummings], and is subject to all licensing requirements as specified by [Mr Cummings]."

It also seems to me that this clause, contained in an agreement signed by Mr Pacione on behalf of HSFS, is inconsistent with any assertion of an ownership interest in the copyright in QSS or in QSS as a software package by JRC. Clauses 5(d) and 5(e) in turn contemplate the issue of additional licences for the software package by Mr Cummings to HSFS. That approach also seems to be inconsistent with JRC then having an ownership of the copyright in QSS or an interest in the software package, which would have supported it sub-licensing the software package to HSFS without the need for Mr Cummings' involvement, as it claimed in later did in dealings with SFSI. Clause 7 of the Stramit Agreement deals with adaptations or modifications of "The Product", in similar form to the 2002 Agreement. The fact that such a provision is contained in the Stramit Agreement, which does not involve the sale of any interest in the software as distinct from a licence to use it, is consistent with the reading that I have given to the similar clause in respect of the 2002 Agreement.

As I also noted above, on 25 February 2004, Mr Cummings and Tanmari granted HSFS an exclusive licence, inter alia, to "use and exploit" QSS for the territory of Australia under the Exclusivity Agreement (Pacione 26.10.12 [41], Ex P7, 3/185-199; Ex P2, 62). The Exclusivity Agreement was executed in the context of discussions between HSFS and Stramit to provide it with exclusivity, which ended about July 2004. Mr Pacione entered into those discussions in January 2004 relating to an exclusive arrangement for "the products under contract with [HSFS]" (Pacione 26.10.12 [39]). The reference to the "products" is presumably a reference to the suite of products used to manufacture the relevant steel products, and QSS was plainly within the scope of the discussion.

Given the findings that I have reached above, such representations, had they been made, would have been misleading or deceptive or likely to mislead or deceive in respect of JRC (since the 2002 Agreement had been abandoned no later than on entry into the 2004 Agreement) and SFSI (which had no rights to QSS for the reasons noted above). The issue would be more complex in respect of HSFS, since it continued to have rights under the 2004 Agreement. It is not necessary to address that issue since I have not found that the representations were made.

The Cross-Defendants identify further issues as whether statements on SFSI's website represent that SFSI is the owner of QSS; or that SFSI is permitted to license QSS to third parties; or that ProCAD has sponsorship or approval that it does not have; or that JRC, HSFS or SFSI have sponsorship, approval or an affiliation with Mr Cummings, Tanmari and FIPL; whether the representations on the SFSI website are misleading or deceptive; and whether JRC, HSFS or SFSI engaged in conduct that is misleading or deceptive or likely to mislead in contravention of ss 18 or 29(g)-(h) of the Australian Consumer Law (Cross-Claim [67], [69]). The Cross-Claimants submit that the determination of this claim will follow upon the determination of the copyright infringement claim.

The Cross-Defendants accept that the statements on the SFSI website represent that SFSI was permitted to license QSS to third parties. It does not seem to me that those statements extend further to any representation about ownership, or any representation about any sponsorship, approval or affiliation with Cummings, Tanmari or FIPL. The Cross-Defendants submit that the representation that SFSI was permitted to license QSS to third parties was not misleading or deceptive because, at the relevant time, SFSI was permitted to license QSS to third parties, because JRC granted SFSI the right to grant licences using JRC's rights under the 2002 Agreement. I do not accept that submission for the reasons noted above. The Cross-Defendants submit, and I accept, that only SFSI made the relevant representation, namely, that it was permitted to license QSS to third parties. Paragraph 70 of the Cross-Claim pleads that the domain name for the website is connected to is SFSI and that proposition was put to and accepted by Mr Pacione in cross-examination (T158-159). There is no evidence that, and it was not put to Mr Pacione, that JRC or HSFI (which, as I noted above, had substantially ceased business before the representation was made) had any involvement in the operation of that website. I find that only SFSI engaged in the conduct that I have held to be misleading or deceptive.

The twenty-sixth issue identified by the Cross-Defendants in respect of the Cross-Claim is whether Mr Pacione is a person involved in the contravention. The Cross-Claimants contend that, where Mr Pacione is the controlling mind of each of the corporate Cross-Defendants, he is a person involved in the contraventions. They submit that, if the Court finds that JRC, HSFS and/or SFSI has contravened ss 18, 29(g) or 29(h) of the Australian Consumer Law, then Mr Pacione is a person involved in the contravention(s) as he has aided, abetted, counselled or procured the contravention; or has been directly or indirectly, knowingly concerned in, or party to, the contravention within the meaning of s 2 of the Australian Consumer Law. Section 236 of the Australian Consumer Law in turn provides that a claimant may recover damages from a person involved in a contravention.

The Cross-Claimants recognise that the state of mind required to establish that a person is involved in a contravention is knowledge of the essential elements of the contravention: Yorke v Lucas [1985] HCA 65; (1985) 158 CLR 661 at 667 per Mason ACJ, Wilson, Deane and Dawson JJ. They accept that a finding of involvement by Mr Pacione requires that he have knowledge of the falsity of the relevant representations: Australian Competition and Consumer Commission v SensaSlim Australia Pty Ltd (in liq) (No 5) [2014] FCA 340; (2014) 98 ACSR 347 at [535] per Yates J. They point out that it is not, however, necessary for them to prove that Mr Pacione knew that the conduct amounted to a contravention of the Australian Consumer Law: Yorke v Lucas above at 667. They also recognise that, for Mr Pacione to be directly or indirectly knowingly concerned in the contravention by another of a relevant provision, he must have at least some practical involvement in the acts or omissions constituting the contravention: Australian Competition and Consumer Commission v SensaSlim Australia Pty Ltd (in liq) (No 5) above at [543].

There is no doubt that Mr Pacione was sufficiently associated with the contravention to be involved in it, if the requisite degree of knowledge on his part is established. Mr Pacione accepted in cross-examination that he was the "controlling mind" of, relevantly, SFSI in the sense that he was and is a director and had carriage and control of its business and was responsible for all decisions made in respect of its business. The relevant cross-examination was as follows:

"Q. And you are offering to renew the QSS licence for free for those customers who come across from some other licensor, aren't you?

A. Yes.

Q. When I say "aren't you", I mean isn't SFSI doing that?

A. Yes.

Q. And you as the controlling mind of the director of SFSI are authorising that conduct?

A. Yeah, on behalf of SFSI, yes, that's correct." (T159)

However, the question of the extent of knowledge required to establish that a director is involved in a company's contravention arising by misleading or deceptive conduct raises questions of real difficulty that were not fully addressed by the parties' submissions. As the Cross-Claimants recognise, liability for involvement in a contravention at least requires that a director have actual knowledge of the essential facts constituting the contravention (Yorke v Lucas above) and does not require that a director know that the relevant conduct amounted to a contravention of the prohibition on misleading or deceptive conduct under the Australian Consumer Law. At least some cases indicate that a person can be held liable as involved in a contravention where he or she knows the facts which make the conduct misleading, even if he or she has not recognised its misleading character: Heydon v NRMA Ltd [2000] NSWCA 374; (2000) 51 NSWLR 1; Adler v Australian Securities and Investments Commission [2003] NSWCA 131; (2003) 179 FLR 1. In Medical Benefits Fund of Australia Ltd v Cassidy [2003] FCAFC 289; (2003) 135 FCR 1, Stone J took the view that liability requires that the relevant person know that the conduct was misleading, whereas Moore J (with whom Mansfield J agreed) considered that it was only necessary that he or she knew that the representation would convey a meaning contrary to the facts. In Rafferty v Madgwicks [2012] FCAFC 37; (2012) 203 FCR 1, the Full Court of the Federal Court observed that the necessary knowledge to establish involvement in a contravention was knowledge of conduct which had the prohibited character, although it was not necessary to establish knowledge of a contravention of the relevant prohibition.

The Cross-Claimants submit that Mr Pacione's evidence that he held the view that JRC owned QSS and could deal with it in any way it pleased, and it did so by sub-licensing SFSI in or about April 2009, should be rejected. The Cross-Claimants submit that evidence is contrary to the various acknowledgements by the companies associated with Mr Pacione the Mr Cummings and Tanmari owned the copyright in QSS, to which I have referred above; the fact that in May 2008 Mr Pacione proposed an agreement between HSFS and the predecessor to SFSI (Ex P5); and that Mr Pacione sought but did not obtain consent from Mr Cummings and Tanmari to transfer the rights under the 2004 Agreement from HSFS to JRC in 2009 (Pacione 26.10.12, Ex P7, 3/322, 324, 329, 332-333). I have referred to several of those dealings above. They also contend that Mr Pacione knew from at least 25 February 2004 that JRC did not have rights to license QSS (whether as ProCAD or otherwise) in Australia as a result of the Exclusivity Agreement; and that SFSI never had, relevantly, any right to deal with QSS (whether as ProCAD or otherwise).

With some hesitation, I have concluded that it has not been established that Mr Pacione was involved with their requisite knowledge in making the relevant misleading and deceptive representation, namely, that SFSI had the right to license QSS to the parties. I have held above that it has not been established that the suggested assignment of JRC's rights under the 2002 Agreement to SFSI was effected. However, as I noted above in dealing with additional damages under s 115(4) of the Copyright Act, the relationships between the parties had a lengthy history and were not well-documented, and I am not satisfied that Mr Pacione had knowledge, at least at this time, that SFSI did not have at least some rights in respect of QSS.

The twenty-eighth issue identified by the Cross-Defendants in respect of the Cross-Claim is whether JRC, HSFS or SFSI have committed an offence in contravention of s 151(g) and (h) of the Australian Consumer Law as to which the Cross-Claimants may sue. The Cross-Defendants point out, and I accept, that the Cross-Claimants do not have standing to bring a claim in respect of such an offence. The Australian Consumer Law is a schedule to the Competition and Consumer Act and applies as a law by reason of s 131 of the Competition and Consumer Act. Prosecutions for offences under that Act may not be instituted except with the written consent of the Minister or a person authorised by the Minister, unless the proceedings are instituted by the specified authorities, under s 163(4) of the Competition and Consumer Act. There is no evidence of any such consent and this is sufficient to dispose of this claim.

Breach of confidentiality/trade secrets (Cross-Claim [77] - [86]) (Cross-Defendants issues 29-32)

The Cross-Defendants identify the issues in respect of this claim as whether information in a licence key generator is property; whether the information is confidential; whether HSFS owed an obligation of confidence to FIPL; and whether JRC or HSFS breached such an obligation of confidence.

It is common ground that Mr Cummings provided a computer program that generated licence keys that activate QSS for sub-licensees to Mr Pacione on behalf of JRC or HSFS, although there is a dispute as to when this occurred to which I will refer below. The Cross-Claimants contend that the source code for the program was confidential and was provided to JRC, HSFS and Mr Pacione on the basis that it would be kept confidential and not used or disclosed to any other person. They contend that Mr Pacione, HSFS or JRC have disclosed the licence key generator to SFSI in breach of confidence and SFSI has used the licence key generator in breach of confidence. They contend that knowledge of the obligation of confidence can be imputed to SFSI by its director, Mr Pacione.

Mr Cummings' evidence is that he provided the licence key generator to Mr Pacione for HSFS in 2004 (Cummings 14.10.13 [113]) and that he did not authorise Mr Pacione or HSFS to provide or use the licence key generator for any other purpose and did not authorise HSFS or anyone to disclose the licence key generator to SFSI (Cummings 14.10.13 [115]-[116]). His evidence was that he said words to the following effect to Mr Pacione when he gave him the licence key generator:

"This is for your use only for your customers. Don't disclose it to anyone." (Cummings 14.10.13 [118])

Mr Pacione claims that the licence key generator was given to him in August 2002 or early 2003, rather than in 2004 in respect of the 2004 Agreement. Mr Pacione's evidence in reply was that, in early 2003, JRC received an "authorisation number generating software" program that would allow access to the QSS program, which allowed JRC to authorise its customers worldwide to use the QSS program (Pacione 28.1.13 [31]-[32]). Mr Pacione's evidence in his further affidavit of 19 March 2014 was that Mr Cummings gave him a copy of the licence key generator program and the source code files that created the licence key generator in August 2002, on a compact disc, two years before the 2004 Agreement (Pacione 19.3.14 [117]; Ex P7, 3/55). That evidence seems to be supported by a printout of the contents of that disc.

In cross-examination, the difference between Mr Cummings' account as to the licence key generator and Mr Pacione's account narrowed somewhat, when Mr Pacione gave evidence that he received two versions of the licence key generator, one in August 2002 after the 2002 Agreement at the same time as he picked up the source code, and on the same disk, which was subsequently updated by Mr Cummings from time to time, and another after entry into the 2004 Agreement (T93). Mr Pacione accepted in cross-examination that, obviously enough, if the licence code was not sent to a customer to which QSS was provided, the customer could not continue to use the software (T94).

An initial question is whether the information represented by the licence key generator was confidential. In Australian Broadcasting Corporation v Lenah Game Meats Pty Ltd [2001] HCA 63; (2001) 208 CLR 199, Gleeson CJ at [30] observed that:

"The usual elements for an equitable remedy are, first, that the information is confidential, secondly, that it was originally imparted in circumstances importing an obligation of confidence, and thirdly, that there has been, or is threatened, an unauthorised use of the information to the detriment of the party communicating it."

The Cross-Defendants refer to the decision in Del Casale v Artedomus (Aust) Pty Ltd [2007] NSWCA 172; (2007) 73 IPR 326, where Hodgson JA (at [40]) identified several factors relevant to whether information is confidential including the extent to which the information is known outside the plaintiff's business; the extent to which the trade secret was known by employees and others involved in the plaintiff's business; the extent of measures taken to guard the secrecy of the information; the value of the information to the plaintiffs and their competitors; the amount of effort or money expended by the plaintiffs in developing the information; the ease or difficulty with which the information could be properly acquired or duplicated by others; whether it was plainly made known to the employee that the material was by the employer as confidential; whether the usages and practices of the industry support the assertions of confidentiality; whether an employee has been permitted to share the information only by reason of his or her seniority or high responsibility; whether the owner reasonably believes these things to be true and that belief is reasonable; and that the information can be readily identified. The Cross-Defendants submit that the Cross-Claimants' evidence does not address the issues raised by Hodgson JA in Del Casale v Artedomus above. Those factors are not, with respect, a checklist and it will not always be necessary to address them. The confidentiality of some information may readily be inferred from its character and the surrounding circumstances.

Mr Pacione denies that Mr Cummings told him that the licence key generator was to be used only for his customers or not disclosed (Pacione 19.3.14 [118]). Mr Pacione's evidence was also that:

"The CD covering label does not say that the contents of the CD are confidential. [CHECK]" (Pacione 19.3.14 [118])

(The reference to "[CHECK]" in that quotation is contained in the text of the affidavit.) Mr Pacione's evidence was also that Mr Cummings provided JRC and HSFS with updates to the licence key generator program from time to time (Pacione 19.3.14 [119]) and that Mr Cummings and Tanmari "did not impose any restrictions on the Plaintiffs' use of the Licence Key Generator" (Pacione 19.3.14 [120]). I understand Mr Pacione's evidence to be intended to suggest, at least by implication, that the licence key generator was not confidential, because he was not expressly told it was confidential, or the label to the compact disc did not indicate it was confidential, or that he did not understand it to be confidential for that reason. It seems to me that this evidence is not credible and the fact that it was given is adverse to Mr Pacione's credit. Mr Pacione has plainly been involved in distributing operating systems for rollforming machines and associated software for a considerable period and there is no suggestion that he did not understand that the generation of a licence key would authorise the operation of that software and that any person who obtained access to a licence key generator would have the practical ability to authorise access to the software without the licensor's consent. The evidence to which I have referred above indicates that the licence key generator was plainly confidential and, so far as Mr Pacione's evidence is concerned, the confidentiality of the licence key generator was self-evident.

The next question is whether the Cross-Defendants breached confidentiality in respect of that information. Mr Cummings' evidence was that, if SFSI had been sub-licensing QSS to third parties, it would have had to have access to the licence key generator to make QSS work for those sub-licensees (Cummings 14.10.13 [120]). I accept that evidence and find that confidentiality in the licence key generator was breached on that basis.

The Cross-Defendants also contend that, even if the licence key generator is confidential, the Cross-Defendants have not breached any obligation of confidence because they have contractual rights to use confidential information and trade secrets. They refer to a right to use know-how and trade secrets conferred on JRC under the 2002 Agreement. However, that does not assist the Cross-Defendants, because I have held that the 2002 Agreement was abandoned by at least the time of the entry into the 2004 Agreement. The Cross-Defendants also contend that the 2004 Agreement grants HSFS the rights to use confidential information such as the licence key generator and refer to the non-exclusive licence of the "Software" (as defined) granted to HSFS under cl 2.1 of that agreement, and to the definition of "Software" as including the:

"know how ... and trade secrets necessary for the implementation of the Software" (cl 1.1).

I accept that HSFS has a continuing right to use the licence key generator in respect of licences to customers under the 2004 Agreement. However, the right to use the licence key generator to generate licences conferred under the 2004 Agreement did not extend to a right to provide it to SFSI so that it could generate licences for software provided to customers which it did not have a right to grant under the 2004 Agreement or otherwise. I also have not accepted the Cross-Defendants' claim that a sub-licence was granted to SFSI in April 2009 so as to confer any rights arising under that agreement on SFSI.

The Cross-Defendants also contend that, if there was an obligation of confidence, it was owed to Mr Cummings and Tanmari and not to FIPL. They accept that certain types of information such as trade secrets may be transferred or held in trust or charged (Farah Constructions Pty Ltd v Say-Dee Pty Ltd [2007] HCA 22; (2007) 230 CLR 89 at [118]) but contend that the Cross-Claimants have not established that the licence key generator was a trade secret in the relevant sense. It is not clear to me that the submission is of immediate relevance, since Tanmari as well as FIPL have brought the relevant claim. The claimed breach of the duty of confidentiality is therefore established.

Trade mark infringement (Cross-Claim [87] - [101]) (Cross-Defendants' issues 35-38)

FIPL also brings a claim for trade mark infringement in respect of the use of the Australian trade mark for "QUIK SERIES" as to which FrameCAD Ltd is the registered owner. The claim is pleaded by reference to the use of "QUIK SERIES" on a website maintained by SFSI, and FIPL relies on screenshots of that website in November 2011, November 2012 and February - April 2013. FIPL in turn pleads that use is in relation to goods in respect of which the trade mark is registered and constitutes infringement of the trade mark pursuant to s 120(1) of the Trade Marks Act 1995 (Cth). Mr Taylor's affidavit dated 31 October 2013 set out two examples of the alleged infringing use in print outs of SFSI's website dated 19 November 2012 and 13 February 2013. The relevant parts of the website read:

"Quik Series Software Licences Renewed

● If you are an existing QSS licensed user - ...

● On QSS version 11.603 or earlier - later versions possible ...

● Don't wish to pay annual Licence fees or deal with FrameCAD. ...

SFS International will renew your QSS licence free." (Ex P7, Vol 6, Annexure SMTN).

The Cross-Defendants identify the issues in respect of this claim as whether FrameCAD Ltd is entitled to be registered as the owner of the registered trade mark "Quik Series Software"; whether the display of the phrase "QUIK SERIES" on the screenshots of SFSI's website is using the registered trade mark as a trade mark in relation to registered goods; whether the display of the phrase "QUIK SERIES" is using a sign in good faith to indicate the kind, quality, quantity, intended purpose, value, geographical origin, or some other characteristic, of goods or services; whether JRC, HSFS or SFSI are infringing the registered trade mark; whether Mr Pacione is liable for the infringement of the registered trade mark; and whether the Cross-Defendants are liable for additional damages in this respect.

An initial issue arises as to whether FIPL has standing to bring this claim where Frame CAD Ltd is the registered owner of the relevant trade mark. FIPL claims to be an authorised user of the relevant trade mark under s 8 of the Trade Marks Act and claims standing to bring trademark infringement proceedings under s 27(2) of the Trade Marks Act as the authorised user of the trademark (Taylor 31.10.13, [60]-[70]). The position in respect of the trade mark is confusing, where it appears that Mr Cummings and Tanmari initially assigned the mark to FIPL under the Purchase Agreement; FrameCAD Ltd rather than FIPL subsequently registered the mark, although it is unclear how it had acquired an interest in it; and FIPL now claims standing to bring the claim in reliance on an undocumented arrangement by which it is said to have become an authorised user of the mark. The evidence of that arrangement can only be described as unsatisfactory, amounting to little more than conclusory assertions in Mr Taylor's affidavit dated 31 October 2013, that inverted the relevant parties - at least if FIPL's present claim to standing is to be accepted - as follows:

"FrameCAD IP has licensed and continues to licence FrameCAD Limited non-exclusively to us (including with the right to apply for registration of and sublicence) the Trade Marks in Australia.

FrameCAD Limited uses the Trade Marks, and sublicences that use under the control of FrameCAD IP."

In oral evidence, Mr Taylor indicated that the reference to "FrameCAD Limited" in this evidence should be to "FrameCAD IP" (to which I have referred as FIPL) and the reference to "FrameCAD IP" should be to "FrameCAD Limited". An allegation of trade mark infringement seems to me to be a serious matter and whether the person making it has standing to bring it is also a serious matter, to be determined by reference to the gravity of the matters alleged in accordance with s 140 of the Evidence Act 1995 (NSW). I am not satisfied, having regard to the nature of the allegation and the perfunctory quality of Mr Taylor's evidence as to this matter, that FIPL has standing to bring the claim. I am also not satisfied the claim is established for other reasons to which I will refer below.

The thirty third issue identified by the Cross-Defendants in respect of the Cross-Claim is whether FrameCAD Ltd was entitled to be registered as the owner of the registered trade mark "Quik Series Software." The Cross-Defendants recognise that FrameCAD Ltd is registered as the owner of the Australian trade mark registration number 1468419 "QUIK SERIES". They point out that a court may rectify the trade mark register on the application of an aggrieved person under s 88 of the Trade Marks Act on the same grounds as a person may oppose the registration of a mark. They also point out that paragraph 88 of the Defence to Cross-Claim pleads that the Cross-Defendants "do not admit" that FrameCAD Ltd was the owner of the mark and was entitled to be registered as the owner of the mark. However, the non-admission of this matter does not amount to the assertion of any positive claim that FIPL was not the owner of the trade mark or was not entitled to be registered as owner of the mark, still less a claim to rectification of the trade mark register, in proceedings to which the owner of the trade mark is not party. The Cross-Defendants' submissions go well beyond the pleaded defence in seeking to advance affirmative reasons why the mark should not be registered. It does not seem to me that the Cross-Defendants can bring a claim to rectification of the entry in the trade mark register by pleading no more than that they do not admit its basis. The claim by the Cross-Defendants for rectification of the register fails because the Cross-Claimants' pleaded case does not permit it to be advanced.

The next issue is whether the references to "Quik Series" on SFSI's website amounted to a use of the registered trade mark as a trade mark so as to amount to an infringement of the mark within the meaning of s 120(1) of the Trade Marks Act. That section provides as follows:

"(1) A person infringes a registered trade mark if the person uses as a trade mark a sign that is substantially identical with, or deceptively similar to, the trade mark in relation to goods or services in respect of which the trade mark is registered.

Note 1: For registered trade mark see section 6.

Note 2: For deceptively similar see section 10.

Note 3: In addition, the regulations may provide for the effect of a protected international trade mark: see Part 17A."

Section 17 in turn contains a definition of a trade mark in the following terms:

"A trade mark is a sign used, or intended to be used, to distinguish goods or services dealt with or provided in the course of trade by a person from goods or services so dealt with or provided by any other person.

Note: For sign see section 6."

The term "sign" is defined in s 6 as follows:

"sign includes the following or any combination of the following, namely, any letter, word, name, signature, numeral, device, brand, heading, label, ticket, aspect of packaging, shape, colour, sound or scent."

In order to establish infringement of the trade mark under s 120 of the Trade Marks Act, FIPL must establish that one or more of the Cross-Defendants have used, as a trade mark, a sign that is substantially identical with or deceptively similar to the trade mark in relation to goods or services in respect of which the trade mark is registered. Several authorities are relevant to determining whether the reference to "Quik Series Software Licences" on SFSI's website, which plainly had something of a descriptive character about it, is properly characterised as use as a trade mark or would have appeared to consumers as possessing the character of a brand, to adopt a formulation approved by the Full Court of the Federal Court in Nature's Blend Pty Ltd v Nestlé Australia Ltd [2010] FCAFC 117; (2010) 272 ALR 487 at [37].

In Johnson & Johnson Australia Pty Ltd v Sterling Pharmaceuticals Pty Ltd (1991) 30 FCR 326; 101 ALR 700, the Full Court of the Federal Court observed that the word 'CAPLETS' had not been used as a trade mark on the packaging of a paracetamol product. Lockhart J noted (at 341) that:

"The context in which CAPLETS appears on the TYLENOL packaging and in its advertising demonstrates plainly in my opinion, that the use is essentially descriptive and not a badge of origin in the sense that it indicates a connection in the course of trade between the product TYLENOL and the appellant. A person looking at the packaging would assume that the word CAPLETS describes or indicates the shape of the product contained in it or the dosage form."

Gummow J (as his Honour then was) also observed (at 347-348):

"Where the trade mark allegedly used by the defendant comprises ordinary English words (such as "Page Three", considered by Slade J in News Group Newspapers Ltd v The Rocket Record Co Ltd [1981] FSR 89 at 102) then, as this decision illustrates, that circumstance may be taken into account by the court in the process of reasoning by which it accepts or rejects a submission that the use in question is not a trade mark use but a description of the goods in question. To say that is not to gainsay the point made by Dixon CJ in Mark Foys Ltd v Davies Coop and Co Ltd (the Tub Happy case) (1956) 95 CLR 190 at 194-195 that language is not always used to convey a single, clear idea; a mark may have a descriptive element but still serve as a badge of trade origin. However, where the issue is one of infringing use by use of a word mark (as in the present case), the fundamental question remains, to paraphrase what was said by Williams J in the same case (supra) (at 205), whether those to whom the user is directed are being invited to purchase the goods (or services) of the defendants which are to be distinguished from the goods of other traders "partly because" (emphasis supplied) they are described by the words in question."

In Pepsico Australia Pty Ltd (t/as Frito-Lay Australia) v Kettle Chip Co Pty Ltd (1996) 135 ALR 192; 33 IPR 161, the Full Court of the Federal Court, in dealing with the use of the word 'KETTLE', held that it was not used as a trade mark in respect of kettle cooked potato chips. Sackville J, with whom Lockhart J agreed, observed (at 213):

"The purpose and effect of the words are to be determined by having regard to the context in which they are used. ... It is necessary to consider the words used, as they present themselves to buyers or potential buyers of Frito-Lay's chips who are to form a view about what they are meant to connote."

In Coca-Cola Company v All-Fect Distributors Ltd [1999] FCA 1721; (1999) 96 FCR 107 at [19], the Full Court of the Federal Court observed that:

"Use "as a trade mark" is use of the mark as a "badge of origin" in the sense that it indicates a connection in the course of trade between goods and the person who applies the mark to the goods ... That is the concept embodied in the definition of "trade mark" in s 17 - a sign used to distinguish goods dealt with in the course of trade by a person from goods so dealt with by someone else. "

That approach was approved by French CJ, Gummow, Crennan and Bell JJ in E & J Gallo Winery v Lion Nathan Australia Pty Ltd [2010] HCA 15; (2010) 241 CLR 144 at [43]. In Aristocrat Technologies Australia Pty Ltd v Global Gaming Supplies Pty Ltd [2013] FCA 986; (2013) 102 IPR 400 at [90]-[92], Jacobson J in turn summarised the applicable principles as follows:

"When a claim for infringement is made, a pivotal question is whether the use complained of is use by the alleged infringer as a trade mark. The answer to that question requires an understanding of the "purpose and nature" of the impugned use: Johnson & Johnson Australia Pty Ltd v Sterling Pharmaceuticals Pty Ltd (1991) 30 FCR 326 at 347 (Gummow J), citing Shell at 426 per Kitto J.

Use "as a trade mark" is use as a "badge of origin" in the sense that it indicates a connection in the course of trade between goods and the person who applies the mark to the goods. This is the concept embodied in the definition of a trade mark in s 17 of the Trade Marks Act, namely as a sign used to distinguish goods dealt with in the course of trade by a person from goods so dealt with by someone else: Coca-Cola Co v All-Fect Distributors Ltd (1999) 96 FCR 107 at [19] (Black CJ, Sundberg and Finkelstein JJ); E & J Gallo Winery v Lion Nathan Australia Pty Ltd (2010) 241 CLR 144 at [43].

In Coca-Cola at [20] their Honours went on to say that the authorities (including Shell and Johnson & Johnson) show that the question is whether the sign used indicates origin of goods in the user of the sign; whether there is a connection in the course of trade between the goods and the user of the sign."

FIPL's written submissions as to whether the relevant use was "use" for the purposes of the Trade Marks Act are somewhat conclusory in character, as follows:

"As submitted, the works QUIK SERIES are clearly being used to distinguish the software (the goods) form those of other traders. This constitutes 'use' of the Trade Mark pursuant to section 7 of the Trade Marks Act and to distinguish the goods in the course of trade: section 17 of the Trade Marks Act."

The Cross-Defendants respond that SFSI did not use the trade mark as a trade mark and did not infringe s 120 of the Trade Marks Act. They submit that SFSI was merely using the phrase "QUIK SERIES" to describe the software, because that was the name of the software, rather than as a badge of origin to indicate a connection in the course of trade. Mr Pacione's evidence, in answer to a question as to how the product could be marketed as "QSS" was, simply enough, "[b]ecause that's what it is" (T160). His evidence in cross-examination (T161) was, in effect, that the phrase was used to identify the software since "there are some customers that understood it as "Quik Series Software"", in circumstances that there was no practical way of doing so other than by use of that phrase as a description of the product. I accept this submission. It seems to me that the relevant use was merely to identify the software with which SFSI (wrongly) claimed to be entitled to deal. To adopt the language of Gummow J in Johnson & Johnson above, users of SFSI's website were simply being told what software SFSI offered to renew, not being invited to acquire the goods (or services) of SFSI on the basis that they were distinguished from the goods of other traders partly because they were described by the phrase "Quik Series Software Licences."

The Cross-Defendants also contend that, even if they used the trade mark as a trade mark, they did not infringe that trade mark because they were using the sign in good faith to indicate a characteristic of the goods, namely to describe the software, under s 122(1)(b) of the Trade Marks Act. It is not necessary to determine this question given the findings that I have reached above, although the descriptive character of the usage of the phrase "Quik Series Software Licences" on SFSI's website would have gone some way to establishing that defence.

Next, the Cross-Defendants contend that they were (or SFSI was) not infringing the trade mark because the registered trade mark owner's predecessors in title granted them the right to use the trade mark in relation to QSS. They rely on rights to use the trade mark conferred on JRC under the 2002 Agreement. I would not have accepted this submission, had it been necessary to determine the question, both because that agreement had been abandoned by 2004 as noted above and because it did not confer any right to use the trade mark on SFSI. The Cross-Defendants also rely on the grant of rights to HSFS under the 2004 Agreement. This issue does not arise and, in any event, the relevant website was operated and the mark used by SFSI rather than HSFS and the grant of rights to HSFS under the 2004 Agreement would not have assisted SFSI in that regard. The further issues whether Mr Pacione is liable for the infringement of the registered trade mark and whether the Cross-Defendants are liable for additional damages in this respect also do not arise.

Summary and orders

In summary, I have held that the 2002 Agreement resulted in the grant of a non-exclusive licence to JRC to use QSS in a particular form, as at July 2002, and as updated by updates provided by Mr Cummings, which was not restricted to licensing QSS to Stratco. The 2002 Agreement was, however, abandoned no later than the date of entry into the 2004 Agreement. I have held that the 2004 Agreement did not limit HSFS to licensing QSS and updates to customers who were purchasing a "complete turnkey solution", and was not limited to a period of seven years or to existing customers at the end of that period. I have held that HSFS did not breach the 2004 Agreement by reason of non-payment of licence fees for licences granted by SFSI in the relevant period and the termination of the 2004 Agreement was not effective. I have held that the Defendants were only obliged to provide new releases of QSS compatible with IntelliCad version 4, otherwise unless agreed in writing, under the 2004 Agreement; that both parties had breached the obligations under the 2004 Agreement to enter into an escrow agreement; and that an order for specific performance of that obligation should not now be made. The Plaintiffs' claims in respect of breach of contractual obligations regarding development services, confidential information and good faith, the tort of conspiracy, misleading or deceptive conduct, unconscionability, the tort of inducing breach of contract and for groundless threats of infringement have not been established.

The Cross-Claimants have succeeded, in significant respects, in respect of the Cross-Claim. I have held that three identified versions of QSS are subject to a proper claim for copyright. I have held SFSI liable for copyright infringement and that HSFS and Mr Pacione had authorised the relevant infringement by SFSI and that the Cross-Claimants are entitled to additional damages under the Copyright Act in respect of the infringement. The Cross-Claimants' claims for misleading or deceptive conduct against SFSI regarding representations on its website and for breach of a duty of confidentiality against the Cross-Defendants have also been established. The Cross-Claimants' claim for trade mark infringement has not been established.

I will hear the parties as to whether any orders are properly made at this point to give effect to the findings in this judgment and as to any further directions which should be made in respect of the further hearing as to quantum.

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Details

AGLC: JR Consulting & Drafting Pty Ltd v Cummings [2014] NSWSC 1252
Case: [2014] NSWSC 1252
Decision Date: 12 September 2014

CaseChat Overview and Summary

JR Consulting & Drafting Pty Ltd and JR Consulting & Drafting (NSW) Pty Ltd (collectively, the plaintiffs) brought an action against Cummings, Axiom Software Pty Ltd, and JBR Corporation Pty Ltd (collectively, the defendants) in the Federal Court of Australia. The plaintiffs sought various forms of relief relating to contracts, torts, trade practices, intellectual property, and equity. The case involved disputes about the nature and extent of software licences, alleged breaches of contract, claims of misleading and deceptive conduct, and intellectual property rights.

The court was required to determine the precise nature of the "interest" acquired by the first plaintiff in the software, whether the first defendant owned the copyright to the exclusion of the second defendant, and whether the first plaintiff was limited to licensing the software to a particular customer. The court also had to decide whether the first defendant had an obligation to provide the first plaintiff with source code and updates for, and modifications and developments to, the software, and whether the initial contract was abandoned by the parties. Further, the court needed to assess whether the second defendant properly terminated the agreement and if there was a breach of the obligation of good faith. The court also considered whether the second and third defendants engaged in the tort of conspiracy and whether the third defendant induced a breach of contract.

The court found that the first plaintiff had acquired a non-exclusive "interest" in the software, but this interest was limited to the software that existed at the relevant date. The court held that the first defendant did not own the copyright in the software to the exclusion of the second defendant, and the first plaintiff was not limited to licensing the software to a particular customer. The court determined that the first defendant did not have an express or implied obligation to provide the first plaintiff with source code and updates, and modifications and developments to the software. The court concluded that the initial contract was not abandoned by the parties. Regarding the termination of the agreement, the court found that the second defendant had not properly terminated the agreement, and there was a breach of the obligation of good faith. The court also found that the second and third defendants had not engaged in the tort of conspiracy or induced a breach of contract. The court rejected claims under the Australian Consumer Law and found no breaches of confidentiality or intellectual property rights.

The court ordered that the first defendant was not required to provide updates to the second plaintiff to ensure software compatibility with other software, and the second defendant was not liable for additional damages under the Copyright Act 1968 (Cth). The court also dismissed claims for breach of confidentiality and trade mark infringement. The plaintiffs' claims were largely unsuccessful, and the court did not award significant relief to the plaintiffs.

Orders