Spatialinfo Pty Ltd v Telstra Corporation Ltd

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FEDERAL COURT OF AUSTRALIA

Spatialinfo Pty Ltd v Telstra Corporation Ltd [2006] FCA 950

SPATIALINFO PTY LTD v TELSTRA CORPORATION LTD and AUTODESK AUSTRALIA PTY LTD

VID 240 OF 2004

SUNDBERG J
28 JULY 2006
MELBOURNE


IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY

VID 240 OF 2004

BETWEEN:

SPATIALINFO PTY LTD (ACN 071 977 921)
Applicant and First Cross-Respondent

AND:

TELSTRA CORPORATION LTD (ACN 051 775 556)
First Respondent and Cross-Claimant

AUTODESK AUSTRALIA PTY LTD (ACN 006 741 340)
Second Respondent and Second Cross-Respondent

JUDGE:

SUNDBERG J

DATE OF ORDER:

28 JULY 2006

WHERE MADE:

MELBOURNE

THE COURT ORDERS THAT:

1.The motion of the second respondent, notice of which was filed on 7 March 2006, be dismissed.

2.The second respondent pay the applicant’s and the first respondent’s costs of the motion.

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


IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY

VID 240 OF 2004

BETWEEN:

SPATIALINFO PTY LTD (ACN 071 977 921)
Applicant and First Cross-Respondent

AND:

TELSTRA CORPORATION LTD (ACN 051 775 556)
First Respondent and Cross-Claimant

AUTODESK AUSTRALIA PTY LTD (ACN 006 741 340)
Second Respondent and Second Cross-Respondent

JUDGE:

SUNDBERG J

DATE:

28 JULY 2006

PLACE:

MELBOURNE

REASONS FOR JUDGMENT

INTRODUCTION

  1. This proceeding was commenced in February 2004.  Since then, I have been called on to adjudicate:

    (a)a dispute as to notices to produce and subpoenas served by the first respondent (Telstra) on the applicant (Spatialinfo) and the entities funding Spatialinfo’s prosecution of the proceeding: Spatialinfo Pty Ltd v Telstra Corporation Ltd [2005] FCA 455;

    (b)a motion by Telstra for the striking out of part of Spatialinfo’s claim or for summary judgment thereon: Spatialinfo Pty Ltd v Telstra Corporation Ltd [2005] FCA 1629 (Spatialinfo No 2); and

    (c)a dispute as to the regime that should govern the treatment of confidential documents exchanged in the course of the proceeding: Spatialinfo Pty Ltd v Telstra Corporation Ltd [2005] FCA 1902.

    At the hearing of the motion referred to at sub-para (b), I granted Spatialinfo leave to join the second respondent (Autodesk).  That, and the reasons for judgment referred to at
    sub-para (b), necessitated the drawing of a second further amended statement of claim (the statement of claim).  The statement of claim was filed on 13 December 2005.


  2. By motion, notice of which was filed on 7 March 2006, Autodesk seeks, pursuant to O 11 r 16, the striking out of paras 33 to 61 of the statement of claim or, pursuant to O 20 r 2(1), summary judgment thereon (the primary relief).  Those paragraphs constitute the whole of Spatialinfo’s suit against Autodesk, in respect of which it seeks damages in excess of $70,000,000.00.  That case consists of three claims.  Paragraphs 33 to 47 plead infringement of copyright.  Paragraphs 48 to 55 plead breach of confidence.  Paragraphs 56 to 61 plead contravention of s 52 of the Trade Practices Act 1974 (Cth) (the TPA). To the extent…

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Details
Case
[2006] FCA 950
Decision Date

CaseChat Overview and Summary

In the Federal Court of Australia, Spatialinfo Pty Ltd brought a claim against Telstra Corporation Ltd and Autodesk Inc. The dispute centred around the alleged infringement of copyright and breach of confidence concerning Data Conversion Engine (DCE) tools used in data migration processes. Spatialinfo claimed that Autodesk, which had previously supplied the DCE tools to Telstra, facilitated the infringement by Telstra by licensing the tools to Telstra. The court was required to decide whether Autodesk's actions constituted an infringement of copyright and whether Autodesk breached a duty of confidence owed to Spatialinfo by licensing the DCE tools to Telstra without permission.

The court examined Autodesk’s argument that the DCE tools' presence on Telstra's systems was due to an intervening supply by Spatialinfo, thus negating any causal link to Autodesk's alleged actions. The court found that the presence of the tools on Telstra's systems did not necessarily exclude Autodesk's involvement and that the question of Autodesk's causal role in the infringement remained for trial. Regarding the breach of confidence, the court determined that Autodesk's expert evidence did not conclusively demonstrate that none of the information in the DCE tools could be confidential. The reports indicated some commonplace contents but did not establish that all information was not confidential. The court held that Autodesk's complaints did not satisfy the criteria for summary dismissal or striking out under the Federal Court Rules.

Consequently, the court dismissed the motion to strike out the claim and denied the application for summary judgment. The court ruled that the allegations of copyright infringement and breach of confidence were sufficient to proceed to trial. The orders of the court were to dismiss the motion filed by the second respondent and to direct the second respondent to pay the costs of the motion to both the applicant and the first respondent.

Orders

Orders of the court

1. The motion of the second respondent, notice of which was filed on 7 March 2006, be dismissed.

2. The second respondent pay the applicant’s and the first respondent’s costs of the motion.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

That complaint is misconceived. I cannot see why that allegation necessarily proceeds on an erroneous theory of accessorial liability. There is no reason why the granting of the licence cannot itself constitute a breach of confidence or, in the circumstances of this case, an aggravation of the prior breach of confidence constituted by the disclosure – which would be relevant to the calculation of damages.Autodesk’s expert evidence In support of the motion, Autodesk procured two reports from Rodney McKemmish, an independent expert. Those reports relate to only one of the DCE tools: the “functional specification” for one of the computer programs (the specification). For the first report, Mr McKemmish was given a copy of Mr Cotter’s affidavit. He was not given a copy of the specification. He was “asked to identify … the … commonplace contents of a specification for a data auditing program that would be part of a data migration process”. He did so. Autodesk contends that what Mr McKemmish so identified “covers large parts” of the specification. For the second report, Mr McKemmish was given a copy of the specification. He was asked to examine the specification and identify the commonplace contents thereof. Autodesk contends that what Mr McKemmish so identified “conformed” to his earlier identification referred to at [32]. Then, he was “asked to assume certain information that in effect identified Telstra (as opposed to Spatialinfo) as the source of some [of the] information in the [specification]”. Autodesk contends that the assumed information “was, by and large, information that he had not identified as commonplace – unsurprisingly, because it was Telstra-specific”. (Presumably, “Telstra-specific” in the same sense in which that phrase is used in what is recorded at [27].) As a result, Autodesk contends that“subtracting from the [specification] first the commonplace and secondly that which was not the information of Spatialinfo, even a cursory examination shows that Spatialinfo’s claim that all the information in the [specification] is confidential to Spatialinfo cannot be maintained. As to what could properly be claimed to be confidential, Autodesk cannot know.”(The emphasis is in the original.) Spatialinfo responds that the reports do not show that all of the information contained in the DCE tools cannot be confidential. It takes issue with the contention that the specification contains much that is commonplace and, in any case, the assumptions that:(a)because the specification contains information that has been identified as commonplace, the specific contents of the specification:(i)appear elsewhere;(ii)are in the public domain; or(iii)cannot be confidential in their entirety;(b)anything that is not commonplace is “Telstra-specific”; and(c)anything that is “Telstra-specific” cannot be confidential to Spatialinfo.It also points out that Mr McKemmish was only asked to examine one of the DCE tools and that his reports do not show that none of the information contained in the DCE tools can be confidential.

Decision

Reasons for decision

SUNDBERG J
Autodesk also contends that there is no causal relationship between its alleged authorisation and Telstra’s alleged infringement. As to particulars (b), (c) and (e) to (h), Autodesk says that the DCE tools’ presence on Telstra’s back-up or disk mirroring systems“is overwhelmingly likely to result from the fact that copies of the DCE tools were supplied during 2000 directly by Spatialinfo to Telstra. Acts of reproduction alleged to occur in 2002 [and] 2003 do not causally result from any possible supply by Autodesk on or about April 2000, even assuming that it occurred, when there is intervening supply of copies by Spatialinfo.”Similarly, as to particular (d), Mr Cobden SC for Autodesk said that “the far stronger inference … is that … the [Export Data Model] appears on Telstra's [email] server [because] Spatialinfo sent it there themselves in 2000”. In support of those statements, Autodesk points to six emails that passed between Spatialinfo and Telstra. However, assuming there was an “intervening supply” by way of those emails avails Autodesk nothing. (Needless to say, Spatialinfo contests that assumption.) The significance of that supply remains in issue and is to be determined by reference to the circumstances thereof. That is a question for trial.Conclusion on the infringement of copyright claim In light of the foregoing, there is no basis upon which to grant the primary relief sought in respect of paras 33 to 47 of the statement of claim. None of Autodesk’s complaints come close to satisfying the well-known tests that apply when striking out under O 11 r 16 or summary judgment under O 20 r 2 are sought. (In this proceeding, notwithstanding s 31A of the Federal Court of Australia Act 1976 (Cth), the test that applies to the latter is that enunciated in Dey v Victorian Railways Commissioners (1949) 78 CLR 62 and General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125. See Mobileworld Operating Pty Ltd v Telstra Corporation Ltd [2006] FCA 743 at [16] and [17].) Further, in light of the foregoing, there is no basis upon which to grant the secondary relief sought in respect of paras 33 to 47 of the statement of claim.THE BREACH OF CONFIDENCE CLAIM The relevant part of the statement of claim pleads as follows.(a)The DCE tools were and are confidential to Spatialinfo and its predecessor: para 48 of the statement of claim.(b)Autodesk received the DCE tools in circumstances in which it knew or ought to have known that they were confidential to Spatialinfo and that their use or disclosure was not authorised by Spatialinfo: para 49.(c)At some time after 12 December 1999 that Spatialinfo cannot before discovery and inspection more particularly specify, Autodesk disclosed to Telstra the DCE tools and, without Spatialinfo’s licence or authority, purported to grant to Telstra a licence to use the DCE tools and to disclose them to Telstra’s agents and contractors: para 50.(d)By reason of the matter alleged in sub-para (c), Autodesk breached its obligation to Spatialinfo to keep the DCE tools confidential and, consequently, Spatialinfo is entitled to damages or an account of profits: para 51.(e)Telstra received the DCE tools in circumstances in which it knew or ought to have known that they were confidential to Spatialinfo and that their use or disclosure was not authorised by Spatialinfo: para 52.(f)At some time that Spatialinfo cannot before discovery and inspection more particularly specify, Telstra used some or all of the DCE tools without Spatialinfo’s licence or authority: para 53.(g)Further, at some time that Spatialinfo cannot before discovery and inspection more particularly specify, Telstra disclosed to a number of third parties some or all of the DCE tools without Spatialinfo’s licence or authority: para 54.(h)By reason of the matters alleged in sub-paras (a) and (e) to (g), Telstra breached its obligation to Spatialinfo to keep the DCE tools confidential and, consequently, Spatialinfo is entitled to damages or an account of profits: para 55.

Ratio Decidendi

Legal Principle Established

Established by: SUNDBERG J

Full text does not contain this section.