Norm Engineering v Digga Australia (No. 3)

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FEDERAL COURT OF AUSTRALIA

Norm Engineering v Digga Australia (No. 3) [2007] FCA 953

INTELLECTUAL PROPERTY – consideration of the resolution of all outstanding questions in relation to the costs of the proceedings the subject of judgment in Norm Engineering v Digga Australia [2007] FCA 761 and all interlocutory applications – consideration of the question of interest upon damages awarded pursuant to s 115(2) of the Copyright Act 1968 (Cth).

Copyright Act 1968 (Cth)

Norm Engineering v Digga Australia [2007] FCA 761
Norm Engineering v Digga Australia (No. 2) [2007] FCA 860
Norm Engineering v Digga Australia Pty Ltd [2005] FCA 1378
Norm Engineering v Digga Australia Pty Ltd [2006] FCA 190
Norm Engineering Pty Ltd v Digga Australia Pty Ltd (No. 2) [2006] FCA 732
LED Builders Pty Ltd v Eagle Homes Pty Ltd (No. 3) (1996) 70 FCR 436
Dr Martens Australia Pty Ltd v Bata Shoe Co of Australia Pty Ltd (1997) 75 FCR 230

NORM ENGINEERING PTY LTD (ACN 010 799 943) v DIGGA AUSTRALIA PTY LTD (ACN 010 443 875)
QUD285 OF 2005

GREENWOOD J
26 JUNE 2007
BRISBANE


IN THE FEDERAL COURT OF AUSTRALIA

QUEENSLAND DISTRICT REGISTRY

QUD285 OF 2005

BETWEEN:

NORM ENGINEERING PTY LTD (ACN 010 799 943)
Applicant

AND:

DIGGA AUSTRALIA PTY LTD (ACN 010 443 875)
Respondent

JUDGE:

GREENWOOD J

DATE OF ORDER:

26 JUNE 2007

WHERE MADE:

BRISBANE

THE COURT ORDERS THAT:-

1.The respondent pay the applicant’s costs of and incidental to the applicant’s Notice of Motion filed 7 June 2006 by which the applicant sought an order for further and better discovery of particular documents from the respondent.

2.The applicant pay the respondent’s costs of and incidental to the applicant’s Notice of Motion filed 23 September 2005 by which the applicant sought an interlocutory injunction until further or earlier order.

3.The costs of and incidental to the applicant’s ex parte application by Notice of  Motion filed 21 September 2005 and heard and determined on 23 September 2005 for an order for the inspection of the respondent’s premises are the applicant’s costs in the cause.

4.The applicant pay the respondent’s costs of and incidental to the applicant’s contention of direct or indirect infringement by the respondent of 17 plans pleaded by the applicant’s Statement of Claim dated 18 March 2005 and abandoned by the applicant’s Further Amended Statement of Claim of 7 March 2006, the subject of leave granted on 8 March 2006.

5.The applicant pay the respondent’s costs of and incidental to the vacating of trial dates from 20 March 2006 to 27 March 2006.

6.The respondent pay 65% of the applicant’s costs of the proceeding from 1 March 2006.

7.The respondent pay the applicant interest of $8,347.14 upon the amount of damages awarded pursuant to s 115(2) of the Copyright Act 1968 (Cth) by 4 pm, 10 July 2007.

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


IN THE FEDERAL COURT OF AUSTRALIA

QUEENSLAND DISTRICT REGISTRY

QUD285 OF 2005

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Details
Case
[2007] FCA 953
Decision Date

CaseChat Overview and Summary

The Federal Court of Australia was called upon to adjudicate on a copyright infringement case between Norm Engineering Pty Ltd, the applicant, and Digga Australia Pty Ltd, the respondent. Norm Engineering alleged that Digga Australia had infringed their copyright by creating two or three-dimensional reproductions of specific drawings. The applicant sought various remedies, including a declaration of infringement, an injunction, and damages or an account of profits. The case involved several applications and amendments, including an ex parte application for an inspection of Digga Australia's premises and a motion for further and better discovery.

The court had to determine several legal issues, including whether the respondent had infringed the applicant's copyright directly or indirectly, whether Digga Australia's conduct constituted an infringement under sections 74 to 77 of the Copyright Act 1968 (Cth), and whether certain drawings were original works and subject to copyright protection. The court also needed to assess the appropriateness of costs associated with various applications and motions made during the proceeding, including the costs of vacating trial dates and the costs of further discovery sought by the applicant.

The court found that Digga Australia had infringed the applicant's copyright by creating two-dimensional reproductions of certain drawings. The court held that three of the four drawings were original works and that the respondent's reproductions constituted an infringement. The court awarded damages of $100.00 for each of the three drawings, resulting in a total award of $300.00. The court also found that the reproduction of the remaining drawing was not protected by section 77(2) of the Copyright Act 1968 (Cth) and awarded damages for that infringement as well. Regarding the costs, the court ruled that Digga Australia should pay the costs of the applicant's motion for further and better discovery, while the applicant was responsible for the costs of other applications and motions. The court also ordered that Digga Australia pay a portion of the applicant's costs from 1 March 2006 and interest on the awarded damages.

Orders

Orders of the court

1. The respondent pay the applicant’s costs of and incidental to the applicant’s Notice of Motion filed 7 June 2006 by which the applicant sought an order for further and better discovery of particular documents from the respondent.

2. The applicant pay the respondent’s costs of and incidental to the applicant’s Notice of Motion filed 23 September 2005 by which the applicant sought an interlocutory injunction until further or earlier order.

3. The costs of and incidental to the applicant’s ex parte application by Notice of Motion filed 21 September 2005 and heard and determined on 23 September 2005 for an order for the inspection of the respondent’s premises are the applicant’s costs in the cause.

4. The applicant pay the respondent’s costs of and incidental to the applicant’s contention of direct or indirect infringement by the respondent of 17 plans pleaded by the applicant’s Statement of Claim dated 18 March 2005 and abandoned by the applicant’s Further Amended Statement of Claim of 7 March 2006, the subject of leave granted on 8 March 2006.

5. The applicant pay the respondent’s costs of and incidental to the vacating of trial dates from 20 March 2006 to 27 March 2006.

6. The respondent pay 65% of the applicant’s costs of the proceeding from 1 March 2006.

7. The respondent pay the applicant interest of $8,347.14 upon the amount of damages awarded pursuant to s 115(2) of the Copyright Act 1968 (Cth) by 4 pm, 10 July 2007.

Background

Background to the litigation

Fourthly, the costs in connection with vacating trial dates for the proceeding from 20 March to 27 March 2006, the subject of judgment dated 8 March 2006 (Norm Engineering Pty Ltd v Digga Australia Pty Ltd [2006] FCA 190) and fifthly, the costs in connection with the applicant’s Notice of Motion filed on 7 June 2006 by which the applicant sought further and better discovery from the respondent of particular email correspondence, the subject of judgment on 9 June 2006 (Norm Engineering Pty Ltd v Digga Australia Pty Ltd (No. 2) [2006] FCA 732). Background The applicant commenced these proceedings by Application and Statement of Claim filed on 18 August 2005. As initially formulated, the applicant sought a declaration that the respondent had infringed either directly or indirectly the copyright subsisting in 19 identified drawings made by an employee of the applicant, an injunction restraining the respondent from infringing the applicant’s copyright in the plans by making either a two or three‑dimensional reproduction of those plans and either damages or at the election of the applicant, an account of profits. On 23 September 2005, the applicant made an ex parte application by Notice of Motion filed on 21 September 2005 supported by an affidavit of Robert James Robinson sworn 22 September 2005, an affidavit of Sam Orr sworn 23 September 2005 and an affidavit of Michael Wayne Gould filed 22 September 2005 for an order that two solicitors from the solicitors for the applicant, Messrs LeMass Solicitors, together with Mr Gould an expert of Quantec McWilliam, Consulting Engineers (together with one or more employees of Quantec McWilliam), enter upon premises occupied by the respondent for the purpose of ascertaining whether an example of the applicant’s 4 in 1 bucket was present on the premises and to inspect and make observations as to whether the 4 in 1 bucket appeared to have been used as a template for either a two or three‑dimensional reproduction. An important aspect of that application involved a question going to the character of the conduct of the respondent. The allegation made by the applicant was that not only had there been a direct and indirect infringement of the copyright in the way contended for in the Statement of Claim but that the infringement was undertaken by the respondent consciously and deliberately. Particular reliance was placed upon the affidavit of Mr Robinson sworn 22 September 2005. The circumstances influencing the exercise of the discretion arising out of the application are identified in Norm v Digga [2005] FCA 1378. A further aspect of that application involved an inference that by reason of the contended conscious and deliberate copying, the applicant would be at risk should the application have been made on notice. For the purposes of the interlocutory application, the Court was satisfied that a prima facie case of infringement had been established subject to the question of whether the conduct of the respondent might not constitute an infringement by reason of ss 74 to 77 of the Copyright Act 1968 (Cth). Although the Court was satisfied that an arguable question as to exculpation arose by reason of ss 74 to 77 of the Copyright Act 1968 (Cth), the material establishing the prima facie case gave rise to a proper foundation for the making of an order.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

GREENWOOD J
At the hearing of the application, the respondent gave evidence that having regard to the computer network arrangements established by the respondent, it would not be possible to retrieve emails created before March 2004. On 16 March 2006, the respondent gave further discovery of 14 emails, 8 of which were the subject of a claim for privilege. The applicant did not rely upon any of the additional emails at the trial, but did rely upon the email created by Mr Wade dated 1 December 2003.Judgment arising out of the trial By the Further Amended Statement of Claim of 7 March 2006, the applicant abandoned any reliance upon 17 of the initial 19 plans in suit and added five others. As to those seven plans, the Court was not satisfied that subsistence of copyright was made out as to drawing BC 41 A003 (the assembly drawing). Two further drawings, BC 41 D014F (185G) and BC 41 D013 (185C) were found not to be original works. Of the remaining four drawings, the Court found originality by authorship on the part of Mr Pesch and substantial reproduction on the part of the respondent. As to three of those four drawings, infringement was made out by two‑dimensional reproduction in the period to 17 June 2004 albeit as a step along the way to three‑dimensional reproduction found not to constitute an infringement of the relevant drawing by reason of s 77(2) of the Copyright Act 1968 (Cth). The Court awarded damages of $100.00 in respect of the two‑dimensional reproduction of each of those three drawings resulting in an award of $300.00. As to the period after 17 June 2004, there was neither infringing two‑dimensional nor three‑dimensional reproduction in respect of those three drawings. As to the one remaining drawing, BC 41 D015 (the pivot mechanism drawing), the Court found two and three‑dimensional reproduction which was not the subject of protection by operation of s 77(2) in either its original or amended form and awarded damages in respect of that infringement. Resolution of Issues Having regard to all of these considerations, I propose to make the following orders. As to the costs incurred in providing discovery of financial documents or any documents relevant to the applicant’s claim for either damages or an account of profits, and those costs incurred in preparing and responding to experts’ reports addressing either claim, those costs properly form part of the costs in the cause. The applicant acted reasonably in deferring its election to claim damages until 16 June 2006, and accordingly, no specific order limiting or excluding the applicant’s recovery of its costs incurred in taking particular steps in relation to the claim for damages or an account of profits ought to be made, and nor ought an order be made that the applicant pay the respondent’s costs in relation to addressing a possible claim for an account of profits after any particular date (being the date by which the respondent says the applicant ought to have made an election).

Ratio Decidendi

Legal Principle Established

Established by: GREENWOOD J

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