Swarbrick v Burge

Case [2003] FCA 1176

FEDERAL COURT OF AUSTRALIA

Swarbrick v Burge [2003] FCA 1176

INTELLECTUAL PROPERTY – COPYRIGHT – DESIGNS – interlocutory injunction – applicant prepared drawings of a yacht – applicant then made a “Plug” in the shape of a yacht – purpose of Plug was to make mould for manufacture of fibreglass yacht by vacuum infusion – applicant’s licensee manufactured and sold 32 such yachts in Australia and overseas – respondents obtained an identical yacht from former employee of applicant’s licensee and, by reverse engineering, were in process of preparing a mould for purpose of manufacturing yachts – whether applicant lost copyright protection through industrial application of an unregistered corresponding design – whether the applicant’s Plug, mould or yacht were “sculptures” and also works of artistic craftsmanship – whether a sculpture can be a work of artistic craftsmanship for copyright purposes.

Copyright Act 1968 (Cth), ss 10(1)(c), 77

Coogi Australia Pty Ltd v Hysport International Pty Ltd (1998) 86 FCR 154 applied
Wham-O Manufacturing Co v Lincoln Industries Ltd [1982] RPC 281 applied
Kambrook Distributing Pty Ltd v Delaney [1984] 4 IPR 79 applied
United Pacific Industries Pty Ltd v Madison Sports Pty Ltd [1998] FCA 614 applied
Kevlacat Pty Ltd v Trailcraft Marine Pty Ltd (1988) 79 ALR 534 distinguished
Shacklady v Atkins (1994) 126 ALR 707 distinguished
Cuisenaire v Reed [1963] VR 719 referred to
The Commonwealth of Australia v John Fairfax & Sons Ltd (1980) 147 CLR 39

JOHN HARLEY SWARBRICK v BRENT BURGE, TREVOR ROGERS
BENJAMIN WARREN and BOLDGOLD INVESTMENTS PTY LTD
W195 of 2003

CARR J
24 OCTOBER 2003
PERTH


IN THE FEDERAL COURT OF AUSTRALIA

WESTERN AUSTRALIA DISTRICT REGISTRY

W195 OF 2003

BETWEEN:

JOHN HARLEY SWARBRICK
APPLICANT

AND:

BRENT BURGE
FIRST RESPONDENT

TREVOR ROGERS
SECOND RESPONDENT

BENJAMIN WARREN
THIRD RESPONDENT

BOLDGOLD INVESTMENTS PTY LTD
FOURTH RESPONDENT

JUDGE:

CARR J

DATE OF ORDER:

24 OCTOBER 2003

WHERE MADE:

PERTH

THE COURT ORDERS THAT:

1.        The respondents’ motion, notice of which was filed on 3 October 2003, be dismissed.

2.The questions of (a) the costs of the above motion, (b) the costs of the applicant’s motion, notice of which was filed on 12 September 2003, and (c) whether the issues of liability and relief should be heard separately and, if so when, be heard and determined at a directions hearing on a date to be fixed.

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


IN THE FEDERAL COURT OF AUSTRALIA

WESTERN AUSTRALIA DISTRICT REGISTRY

W195 OF 2003

BETWEEN:

JOHN HARLEY SWARBRICK
APPLICANT

AND:

BRENT BURGE
FIRST RESPONDENT

TREVOR ROGERS
SECOND RESPONDENT

BENJAMIN WARREN
THIRD RESPONDENT

BOLDGOLD INVESTMENTS PTY LTD
FOURTH RESPONDENT

JUDGE:

CARR J

DATE:

24 OCTOBER 2003

PLACE:

PERTH

REASONS FOR JUDGMENT

INTRODUCTION

  1. I have to decide whether an ex parte interim injunction which I granted on 12 September 2003 and modified at an interlocutory hearing (where both sides were represented) on 15 September 2003 should, in response to a motion, notice of which was filed by the…

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AGLC
Swarbrick v Burge [2003] FCA 1176
Case
[2003] FCA 1176
Decision Date

CaseChat Overview and Summary

Swarbrick v Burge is a case involving a dispute over the ownership of copyright in certain artistic works, including drawings, moulds, a plug model, and a yacht, between the applicant, John Swarbrick, and the respondents. The case was heard in the Federal Court of Australia. The central issue in the case was whether the respondents' motion to discharge or vary the interim injunction should be granted, given that the injunction was initially granted without the respondents having a proper opportunity to argue against it. The court also considered the question of whether the applicant had the financial ability to meet his undertaking as to damages if he were to be unsuccessful in the proceedings.

The court found that the applicant's case was substantially stronger than the respondents' defence and that the balance of convenience favoured maintaining the interim injunction. The court also noted that the respondents had brought their predicament upon themselves by being aware that they were in an area where the laws of intellectual property applied but assuming they were free to act as they did because the applicant had not registered a patent. The court proposed to list the matter for trial on the question of liability during the first week of February 2004, with directions made for the interlocutory matters necessary in the meantime.

The court dismissed the respondents' motion to discharge or vary the interim injunction and ordered that the questions of the costs of the motion, the costs of the applicant's motion, and whether the issues of liability and relief should be heard separately and, if so, when, be heard and determined at a directions hearing on a date to be fixed.

Orders

Orders of the court

1. The respondents’ motion, notice of which was filed on 3 October 2003, be dismissed.

2. The questions of (a) the costs of the above motion, (b) the costs of the applicant’s motion, notice of which was filed on 12 September 2003, and (c) whether the issues of liability and relief should be heard separately and, if so when, be heard and determined at a directions hearing on a date to be fixed.

Background

Background to the litigation

When the respondents’ motion was heard, it was their first real opportunity to argue the question whether the interim injunction should have been granted in the first place. Accordingly, I treated the proceedings as being both a continuation of the applicant’s original motion for an interim injunction (filed with his application) and the hearing of the respondents’ motion to discharge or vary the interim injunction. The applicant accepted that such an approach was appropriate. FACTUAL AND PROCEDURAL BACKGROUND I should emphasise that in referring to the facts, I must not be taken to be making any final findings of fact. My references to the facts are to those facts which emerge from the affidavits filed to date. When the matter goes to trial, the facts may be found to be otherwise. On the state of the evidence to date the facts are as follows. The applicant, Mr John Swarbrick, is a naval architect. He claims to be the owner of the copyright in certain artistic works being: (a)a number of drawings for the construction of a yacht known as the “JS 9000 yacht” (“the Drawings”); (b) moulds for the same purpose (“the Moulds”);(c)a plug model (“the Plug”) handcrafted by him for the purpose of constructing the JS 9000 yacht; and (d)the JS 9000 yacht In his first affidavit, i.e. that sworn on 12 September 2003 in respect of which there are no confidentiality orders, the applicant has deposed to the fact that over a period of ten years he developed the Drawings which involved design skill and elements of judgment. He says that he had a concept in mind, in particular, a light displacement mono hull that would be of a high longitudinal prismatic co-efficient to achieve a high average top speed per displacement/ length ratio regime which would be above contemporary designs. The applicant handcrafted the Plug which is a full scale model, developed from the Drawings, from which a mould was cast. The mould was used to manufacture mouldings which form part of the finished yacht. The applicant has licensed a company, Swarbrick Yachts International Pty Ltd (“Swarbrick Yachts International”), a company controlled by him and of which he is a director, to use the Drawings, specifications, Plug and Moulds to manufacture the JS 9000 yacht. The hull of the JS 9000 yacht is constructed of fibreglass and is built by using a process known as vacuum infusion. The applicant says that, so far as he is aware, Swarbrick Yachts International is the only production boat builder in Western Australia using vacuum infusion technology. Swarbrick Yachts International has constructed 32 of the JS 9000 yachts with over half of them having been delivered to customers overseas. The countries to which Swarbrick Yachts International has exported JS 9000 yachts include England, Germany, Switzerland, Croatia, United States of America and Bermuda. The price for the yachts varies between $50,000 and $65,000 depending on options selected. The JS 9000 has generated significant interest within Australia and overseas as is reflected in certain magazine articles which are in evidence. Swarbrick Yachts International has received almost 4,000 email enquiries in relation to the JS 9000 since February 2002. The applicant says that the development of the Drawings and the crafting of the Plug involved considerable time and expense. He estimates that an amount in the order of $300,000 has been spent by him in the promotion and development of the Drawings and the Plug as well as thousands of man hours over ten years.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

CARR J
The respondents challenge the applicant’s financial ability to meet his undertaking as to damages if he is unsuccessful in the proceedings. But, as I have already mentioned, I think that the evidence establishes on a balance of probabilities that he will be able to do so if the matter of liability can be resolved by next March. CONCLUSION Taking into account all of the factors which I have mentioned I consider that the appellant’s case is, at this stage, very substantially stronger than the respondents’ defence. The risk of a greater injustice to one or other party depending upon the outcome of the matter, is not quite so clear. But, weighing up the balance of convenience as best I can on the evidence, I consider it lies in favour of maintaining the interim injunction. The respondents, on the evidence, were aware that they were in an area where the laws of intellectual property applied. They thought that because the applicant had not registered a patent, they were free to act as they did. To a considerable extent they have brought their present predicament upon themselves. However, as I have mentioned, I think that the interests of justice might well require that the questions of liability and quantum be separated, and that the former question be brought on for trial as soon as possible. I propose to list the matter for trial on the question of liability during the first week of February 2004, probably the 3rd, 4th and 5th of that month. Directions will be made for the interlocutory matters necessary in the meantime. But before taking such a course I will hear the parties. In those circumstances, I consider that the injunction should not be discharged or varied. The respondents’ motion will be dismissed.

Ratio Decidendi

Legal Principle Established

Established by: CARR J

Section 77 of the Copyright Act is in the following terms: ‘Application of artistic works as industrial designs without registration of the designs77 (1) [Application] This section applies where: (a)copyright subsists in an artistic work (other than a building or a model of a building, or a work of artistic craftsmanship) whether made before the commencement of this section or otherwise; (b) a corresponding design is applied industrially, whether in Australia or elsewhere, by or with the licence of the owner of the copyright in the work in the place where the industrial application happens; (c)at any time on or after the commencement of this section, articles to which the corresponding design has been so applied (in this section called “articles made to the corresponding design” are sold, let for hire or offered or exposed for sale or hire, whether in Australia or elsewhere; and (d)at that time, the corresponding design is not registrable under the Designs Act 1906 or has not been registered under that Act. (2) [Not an infringement] It is not an infringement of the copyright in the artistic work to reproduce the work, on or after the day on which articles made to the corresponding design are first so sold, let for hire or offered or exposed for sale or hire, by applying that, or any other, corresponding design to an article. (3) [Exclusions] This section does not apply in relation to any articles in respect of which, at the time when they were sold, let for hire or offered or exposed for sale or hire, the corresponding design concerned was excluded from registration by regulations made under the Designs Act 1906, and, for the purposes of any proceedings under this Act, a design shall be conclusivelypresumed to have been so excluded if: (a)before the commencement of the proceedings, an application for the registration of the design under that Act in respect of those articles had been refused; (b)the reason, or one of the reasons, given for the refusal was that the design was excluded from registration under that Act by regulations made under that Act; and (c)when the proceedings were commenced, no appeal against the refusal had been allowed or was pending. (4) [Applied industrially] The regulations may specify the circumstances in which a design is, for the purposes of this section, to be taken to be applied industrially.’ In relation to s 77(4), Regulation 17 of the Copyright Regulations 1969 is relevant. Regulation 17 provides as follows: ‘Circumstances in which design is taken to be applied industrially 17 (1) For the purposes of section 77 of the Act, a design is taken to be applied industrially if it is applied: (a) to more than fifty articles; or (b)to one or more articles (other than hand-made articles) manufactured in lengths or pieces. (2) For the purposes of paragraph (1) (a), any 2 or more articles: (a) that are of the same general character; and (b) that are intended for use together; and (c)to which the same design, or substantially the same design, is applied; are taken to constitute a single article. (3) For the purposes of this regulation, a design is taken to be applied to an article if: (a)the design is applied to the article by a process (whether a process of printing, embossing or otherwise); or (b)the design is reproduced on or in the article in the course of the production of the article.’